| The
Bank of New York internal probe concludes
evidence of corruption is "not
credible"
New York,
July 27 (MT~NewsWire).NEW YORK - Thomas Renyi
, Bank of New York Co. chairman , who is
fighting a federal lawsuit claiming he
profited from a US$7- billion money-laundering
scheme, was cleared of wrongdoing in an
internal bank investigation, Bloomberg
reported yesterday. But troubling questions
persist regarding the bona fides of
the internal inquiry conducted by by a
so-called "special litigation
committee" (SLC), comprised of BoNY
directors under the guidance of a Washington
law firm of Venable, Baetjer, Howard &
Civiletti.
- - -
On November
13 last year, US District Judge Denny Chin
denied the request of the Bank of New York to
dismiss the lawsuit of BoNY’s shareholders
against its management. BoNY lawyers argued
that the lawsuit should be put "on
freeze" in favor of an internal bank
probe by the SLC. But Judge Chin appeared to
be skeptical that the probe by
the very directors who were sued by BoNY
shareholders could result in anything but a
whitewash. “It is difficult to imagine that
the SLC will reach any conclusion other than
that the [shareholders’] complaint lacks
merit...” the Judge wrote in his decision.
Eight months
later, in May of this year, the SLC released
an 85-page report of the internal probe
concluding that "no credible
evidence" exists to support the
allegations of the shareholders' complaint.
The SLC "is not able to answer with any
certainty" why a number of eyewitnesses
to the alleged wrongdoing would lie, the
report states. "Nonetheless, the
committee finds that such allegations against
Renyi are not credible." The
Venable firm is headed by a former US Attorney
General, Benjamine
Civiletti. Civiletti signed the SLC
report, which concluded that the BoNY
shareholders' complaint is meritless, fully
consistent with the expectations of the
federal judge expressed eight months earlier.
In a related
criminal case, former BoNY executive Lucy
Edward pled guilty to a variety of federal
charges, including money laundering and fraud.
Edwards is said to be cooperating with the
continuing FBI investigation and is awaiting
sentencing. Prosecutors say seven billion
dollars were transferred from Russia through
BoNY accounts set up by Edwards and her
husband Peter Berlin, who also pled guilty to
money laundering using BoNY accounts.
In the
latter part of 1999, at the peak of media
coverage of the BoNY laundering scandal, the
Venable firm was hired by the World Bank to
head the internal investigation into widely
reported alleged misconduct involving its
former Russian official, Leonid Grigoriev, and
the now defunct Russian bank, Inkombank. After
eight months of investigation conducted in
utmost secrecy, Venable reported that it found
no credible evidence of misconduct clearing
the cloud hanging over the World Bank.
Inkombank,
widely reported to be controlled by Russian
organized crime factions, became insolvent in
October of 1999. Its former principals,
including the ex-chairman, a notorious Russian
oligarch, Vladimir Vinogradov, are subjects of
criminal investigations in Russia and
elsewhere.
In the BoNY
probe the Venable firm concluded that evidence
against Renyi is “not credible”, in part,
based upon its interview with Vinogradov, who
said the allegations were untrue, the SLC
report states.
-- QUESTIONS
--
The Venable
internal investigation into the allegations of
corruption of BoNY senior officers was not
without controversy. In April of this year, a
critical witness, informed the court that
Venable lawyer, Thomas Kelly, invited her for
a late night drinks at New York's plush
Daniel's' bar. There Kelly attempted to
persuade her to leave the US and stop
"getting involved" in the BoNY
matter. When she reminded Kelly, that
she was under subpoena and likely would be
called to testify at trial, Kelly laughed and
said that she was "being naive",
because the case will be settled and nobody
needs her testimony, according to the witness'
letter to Judge Chin.
"These
are very serious allegations", said one
lawyer, who is familiar with the proceedings
"if proven to be accurate, Kelly's
behavior is bordering on obstruction of
justice, letting alone the credibility of the
whole 'internal investigation'." In
addition, the Venable attorney may have
violated disciplinary rules by engaging in
communications with a subpoenaed witness,
knowing that she is represented by another
lawyer.
Documents
obtained by MT show that Kelly also attempted
direct contact with officials of a Russian
Legal Academy. However when the attorney for
the Academy, Emanuel
Zeltser, proposed to meet with Kelly and
facilitate the meeting with his clients in his
presence, Kelly was no longer interested in
the meeting.
A half page
letter to Judge Chin, signed by Benjamin
Civiletti himself, concedes that Kelly in fact
had "casual meetings" with the
witness but "at no time, did Mr. Kelly
threaten or in any way intimidate" her.
Civiletti said that the witness "sought
information from Mr. Kelly about a prior
unrelated investigation."
According to
informed sources, the prior investigation
refers to the Venable's probe into the alleged
misconduct of the World Bank official, Leonid
Grigoriev and his ties with Inkombank. That
investigation was completed only weeks before
the Venable was retained by BoNY's special
litigation committee. Coincidentally, Kelly
was the lead investigator in that probe as
well. Although Civiletti depicts it as
"unrelated", documents show that
Kelly was specifically investigating the BoNY
link. In a letter to Maria Berdnikova, a
prominent Russian-American newscaster who
covered corruption in the Russian banking
sector Kelly wrote: "I am very interested
in any info you can share about Mr. G[rigoriev]
and BONY."
There are
other pieces to the puzzle. During the World
Bank investigation, Kelly interviewed another
crucial eyewitness in the BoNY matter,
"Lana", who worked for Inkombank, in
1993-96 and interacted with senior BoNY
officials. Lana told Kelly about numerous
instances of criminal wrongdoing and provided
him with significant documentary evidence.
- - SLC
REPORT- -
The SLC
report that cleared BoNY officials mentions
neither the interview with Lana nor the
documents showing misconduct, which were in
Kelly's possession even prior to the Venable's
becoming an "official" counsel for
BoNY's SLC. Instead, it attacks both witnesses
concluding that their evidence is "not
credible."
According to
the report, "the Committee’s counsel
made two requests" to interview these the
eyewitnesses; but "their counsel did not
respond to those requests.” The report
however is silent about the fact that Kelly
contacted both witnesses directly and
extensively questioned them on a number of
occasions, in person and by phone, without
their lawyer’s presence.
Nor does the
report mention that at Kelly’s request,
Civiletti’s firm was provided with thousands
of pages of documents by Berdnikova and
another prominent American Russian newscaster,
Emily Topol. The documents provided by the
journalists fully corroborated the
eyewitnesses’ accounts of BoNY’s corrupt
practices, according to a source close to the
BoNY matter. The report is likewise silent
about Kelly’s meeting with another witness
identified in one of Kelly’s e-mails
as “Alla.” “I was surprised by the tape
Alla played for us and wanted to discuss in
some more detail with you”, Kelly wrote in
the e-mail, but not in the report.
Other
statements in the SLC report appear to be
bewildering or misleading, for example:
- “Counsel
for the Committee were unable to confirm the
existence of “Bob Klein,” a person alleged
... to be one of the participants in the
alleged illicit schemes” and “there is no
credible evidence of the existence of the
alleged ‘Bob Klein’.” Documents obtained
by MT show that on January 8 of this year
Kelly sent an e-mail to Berdnikova, stating:
“I am trying to set up an interview with Bob
Klein. Any insight?” Berdnikova replied:
“I've already made contacts as regards your
request. Do you need my help in facilitating
the contact or you just want me get you the
fax or e-address?” But when Berdnikova
informed Kelly that she is ready to arrange
for a meeting, Kelly suddenly changed his mind
and declined to meet with Klein. Likewise, a
month earlier, Kelly refused the witness' help
in arranging an introduction to Klein. In her
letter to Judge Chin the witness wrote: “At
the beginning of the evening Mr. Kelly
requested that I help connect him with Robert
Klein, whom I knew personally in 1995-1996 as
BONY’s high level consultant working out of
the Geneva office of BONY-InterMaritime Banque.
When I said that I had known Mr. Klein and
would endeavor to contact him and provide Mr.
Kelly with an introduction, Mr. Kelly suddenly
became irritated. It appeared as though he had
expected me to say I couldn’t help him.”
David
Bergman, an attorney who represents several
whitnesses in the shareholders lawsuit
described the statements in the report as
"not being supported by anything but
hyperbole." A spokesman for BoNY declined
comment, according to Bloomberg. <END> |
