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| Fifth Column |
| Probers Irked Over Holdout By Aide at UBS |
| 2005-10-19 |
| WASHINGTON - Frustrating and puzzling congressional investigators, a high-ranking Treasury Department official who later assumed a top post at the world's largest "wealth management" firm, UBS, has not been made available by the Swiss bank to answer questions about whether the firm possibly laundered billions of dollars for state sponsors of terrorism, congressional staff said yesterday. The official, David Aufhauser, served as the Treasury Department's general counsel from March 2001 to November 2003, according to a UBS press release announcing his hiring at the firm. During that time, Mr. Aufhauser supervised 1,600 lawyers in several divisions of the department, including, among others, the Financial Crimes Enforcement Network, the Office of Terrorist Financing, and the Office of Foreign Assets Control, which, among its many activities, ensures adherence to the terms of America's economic sanctions, including the Cuban embargo. It was in violation of those sanctions that Mr. Aufhauser's current employer, UBS, procured $5 billion in American banknotes for Cuba, Iran, Libya, and Yugoslavia as part of the Extended Custodial Inventory Program, run by the Federal Reserve Bank of New York. The Federal Reserve program, in cooperation with international banks, allowed clients to exchange old banknotes for new ones. One condition of the program was that American currency neither be distributed to nor accepted from nations against which America maintains economic sanctions. When, in April 2003, American troops liberating Iraq found $762 million in American cash in hideouts belonging to Saddam Hussein, the banknotes were traced to UBS and the ECI program. In the process of probing the origins of the Iraqi cash - which UBS has told congressional investigators was initially sent to the Central Bank of Iran - American investigators subsequently discovered that the Swiss bank had also provided $3.9 billion in American currency for Cuba, $1 billion for Iran, $30 million for Libya, and less than $1 million for Yugoslavia. Cuba, Iran, and Libya appear on the State Department's official list of state sponsors of terrorism. As a result of an investigation by the Federal Reserve Bank of New York in cooperation with the Department of the Treasury, UBS was censured by the Swiss Banking Commission, and paid a $100 million fine to the Federal Reserve in May 2004. The next month, Mr. Aufhauser was announced as the new global general counsel for UBS's investment bank and UBS's general counsel for North America. Mr. Aufhauser had left the Treasury Department in November 2003, according to materials distributed by UBS, seven months after the discovery of the American cash in Iraq. He worked briefly for a Washington law firm, William & Connolly LLP - where he had spent his career between 1977 and 2001 as a securities litigator before joining the Treasury Department - before being brought on by UBS in June 2004. Prior to his departure from the Treasury Department, Mr. Aufhauser had earned a reputation as a committed foe of money laundering and terrorist financing operations. During his tenure, for example, the Treasury Department created a new unit, operating under Mr. Aufhauser's oversight and guidance, to combat terrorist financing. The Executive Office for Terrorist Financing and Financial Crimes, established in March 2003, was designed to "identify, block, and dismantle sources of financial support for terror and other criminal activities, including money laundering," and to "focus on reducing the risk that the domestic and international financial systems are being misused by criminals and terrorists," according to the Treasury Department press release that accompanied the announcement of the new office. The new unit was also charged with coordinating with the private sector to reduce the risk that financial-services firms would abet terrorist money-laundering and financing, and to develop and implement America's "national money laundering strategy." Announced as director of the new Executive Office for Terrorist Financing and Financial Crimes was Juan Carlos Zarate, the Treasury Department's deputy assistant secretary for Terrorist Financing and Financial Crimes. As director of the new counter-terrorism unit, Mr. Zarate reported to Mr. Aufhauser, who at the time was also chairman of the National Security Council's policy coordinating committee on terrorist financing. Mr. Zarate - now at the National Security Council as the deputy national security adviser for counterterrorism - was in charge of the Treasury Department's investigation of the UBS transactions. Given Mr. Aufhauser's access to information about the UBS investigation and his experience combating money laundering and terrorist financing - issues of grave concern to the House International Relations Committee, which, according to an announcement this weekend from Rep. Ileana Ros-Lehtinen, a Republican of Florida, will be probing the UBS matter later this session - Ms. Ros-Lehtinen has tried several times over the period of Mr. Aufhauser's employment with UBS to meet informally with him about the bank's improper transactions. Initially, according to Ms. Ros-Lehtinen's staff, the bank informed the congressmen investigating the matter that one year had to pass after Mr. Aufhauser's hiring before he could meet with elected officials. Now that more than a year has elapsed, however, UBS has yet to "make him available," staff said. "We certainly hope UBS is not doing any shifting of the deck chairs just to get themselves out of trouble," Ms. Ros-Lehtinen said yesterday. Mr. Aufhauser, reached by e-mail yesterday, replied to questions about his switch in employment by saying, "UBS approached me at my law firm of 23 years some 10 months after I had left government. The overture was at the tail end of an apparently long and extensive search. "With 23 years of trial experience, and close to an additional three years as the chief banking, international finance, and tax lawyer to two secretaries of the Treasury, I was recommended as a good candidate by an executive search firm to serve as counsel to the Investment Banking arm of UBS," Mr. Aufhauser continued. A spokeswoman for UBS, Christine Walton, said yesterday that "the search for a global counsel was extensive and done over several months." Mr. Aufhauser's hiring, she added, "reflects the bank's continued commitment to maintaining the highest regulatory and ethical standards." Ms. Walton also stressed that "UBS strongly rejects any allegation of money laundering," adding that there was "no indication that any of the banknotes sent to Switzerland were of illicit origin." Ms. Ros-Lehtinen, however, said yesterday that it was important that the matter not end there. She and Rep. Lincoln Diaz-Balart, another Florida Republican and Cuban-American investigating the UBS dealings with the Castro regime, have compared the Swiss banks' covering for the financial transactions of "rogue states" and state sponsors of terrorism to their providing financial cover for the Nazis during the Holocaust. "It's a similar pattern of trying to evade U.S. laws and avoid responsibility," Ms. Ros-Lehtinen said. "It didn't work on the Holocaust assets, and it shouldn't work in this case, either." The congresswoman stressed that there was an added element of urgency in investigating the Swiss banks now, insofar as UBS's possible involvement in money laundering for terrorist regimes presents a real and current threat to American national security. Mr. Aufhauser has expressed similar concerns in the past about the international banking system, for which he now works. In written testimony to the Senate Judiciary Committee delivered in his capacity as a Treasury Department official in June 2003, two months after the discovery of the UBS cash in Iraq, Mr. Aufhauser identified the "formal international banking system" as "the most visible conduit for terrorist financing." Praising the Treasury Department's work in cracking down on terrorist money laundering through international banks, Mr. Aufhauser added that the department had worked on "requiring due diligence" from banks such as UBS, "and expanding information-sharing capabilities to ensure better communication between financial and law enforcement authorities." Mr. Aufhauser has yet to indicate a willingness to meet with Ms. Ros-Lehtinen or other investigating lawmakers. "If we stop the money," Mr. Aufhauser wrote, "we stop the killing." |
| Posted by:Whineling Thiling6595 |
| #2 David Aufhauser Washington law firm, William & Connolly LLP. 1977 and 2001 as a securities litigator. Treasury Department's general counsel.. March 2001 to November 2003 and provided "oversight and guidance" for The Executive Office for Terrorist Financing and Financial Crimes. When, in April 2003, American troops liberating Iraq found $762 million in American cash in hideouts belonging to Saddam Hussein, the banknotes were traced to UBS and the ECI program. In the process of probing the origins of the Iraqi cash - which UBS has told congressional investigators was initially sent to the Central Bank of Iran - American investigators subsequently discovered that the Swiss bank had also provided $3.9 billion in American currency for Cuba, $1 billion for Iran, $30 million for Libya, and less than $1 million for Yugoslavia. Cuba, Iran, and Libya appear on the State Department's official list of state sponsors of terrorism. As a result of an investigation by the Federal Reserve Bank of New York in cooperation with the Department of the Treasury, UBS was censured by the Swiss Banking Commission, and paid a $100 million fine to the Federal Reserve in May 2004 Mr. Aufhauser leaves the Treasury Department in November 2003. UBS pays $100 million fine to the Federal Reserve, and is censured by the Swiss Banking Commission in May 2004. The next month [June 2004] Mr. Aufhauser was announced as the new global general counsel for UBS's investment bank and UBS's general counsel for North America. David Aufhauser July 31, 2003. .."Now, think for a minute. Al Haramayn is established by the Saudi royal family," said former Treasury Department general counsel David Aufhauser. "It strikes me that there is too much abdication of actual power and responsibility when you say you do not have the ability to actually close down these offices abroad and the best you can do is to freeze what assets they have within the jurisdiction and to prohibit further contributions." "In the two and a half years I spent on this matter, I cannot remember a single Saudi who was held accountable for being a donor to terrorist financing," Aufhauser said. "Until we get to the donors, the exercise is a fool's errand." This affair bears watching..?@? |
| Posted by: Red Dog 2005-10-19 04:40 |
| #1 Don't underestimate the power of the Dark Side. |
| Posted by: .com 2005-10-19 01:30 |