The BNP bank, which held the escrow account through which all of the U.N. program’s oil money flowed, maintains investigators sought its documents as evidence targeting other companies and individuals. But several congressional panels say the bank also is under scrutiny.
“The subpoena for BNP Paribas stems from concerns expressed about the bank’s compliance with existing ‘know your customer’ rules and similar laws enacted as part of the Patriot Act,” said a spokesman for Rep. Henry Hyde (R-Ill.), who chairs the House International Relations Committee
The UN “in consultation with the Iraqi government, named BNP to hold the sole escrow account. During the program, over $60 billion passed through the account.”
It won’t be the first time Banque Paribas has been linked in a corruption scandal. The ELF (oil company) investigation comes to mind:
Commissions and corporate bribes for foreign officials were legal under French law at the time – indeed, they were tax deductible. But it was illegal to kick money back to France through these so-called retro-commissions, which nonetheless are thought to have been widespread on major oil and arms deals.
Mr. Auchi has denied any wrongdoing, and defense attorneys said he had offered to buy Ertoil back and repay any commissions he received. But he has refused to appear in France before the magistrates, who have issued an international arrest warrant for him. Although Mr. Auchi’s name is almost unknown to the French or British public, he is sometimes described as the eighth-richest man in Britain, with a broad portfolio of assets grouped under his holding company, General Mediterranean. At one time, he was also reputed to be the largest individual shareholder in the French bank, Banque Paribas, and a member of its international advisory board. According to press reports, the French government last year seized his shares in Paribas, said to be worth $500 million. Queried about his holdings Thursday, Paribas failed to respond.
BNP was also involved in the provision of oil-backed loans — a very risky investment– to Angola in the 1990s at a time when Banque Paribas was near bankruptcy, which caused Global Witness to raise questions in its detailed report. Not that BNP has shied away from bad loans, especially if the loans are backed by the French government
It was widely reported that BNP Paribas, Société Générale and Crédit Agricole, three big French banks that are among Alstom’s leading creditors, made the preposterous suggestion to the government that the firm’s collapse could undermine the French, or even the European, financial system.
For all his talk about markets and despite previous warnings from the European Commission’s competition authorities, Mr Chirac could not resist the pressure to intervene. While denying that this was illegal state aid, his government declared that it would buy half of the €600m in shares the firm is about to issue in return for a stake of about 30%. This will be financed by the government’s recent sale of shares in Renault, a French carmaker.
The state will also provide further disguised subsidies in various forms, among them financial guarantees. The French government’s move immediately incurred the wrath of the European Commission, which said it must first approve the deal.
Interestingly, Jacques Chirac was named in the investigation on the arms trafficking and state looting in Angola, while at the same time being investigated for corruption during his tenure as mayor of Paris. Immune from prosecution for as long as he stays in office in his current post, he keeps a checking account at BNP, as many other people do. BNP’s a very large bank.
As for current EUropean politics, News you may have missed at EU Referendum has the details.