by Terry Reed & John Cummings
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But I am curious, Mr. Johnson, what other money is there that can be diverted to Arkansas that will not come leaving trail?"
An interesting question. Just what other money might have been diverted through the Arkansas investment banking business will never be known because of Robert Johnson's efforts in aborting the then ongoing federal investigation in Little Rock. This was just the type of behavior that George Bush's Attorney-General, William Barr, was accused of by Congress during the ensuing BCCI scandal when the Justice Department contained its BCCI investigation to one area of the country, Tampa, Florida. [10] By not allowing the inquiry to expand where federal agents saw its tentacles reaching, BCCI's ties to intelligence was suppressed.
Gomez, even though Sawahata's question had not been directed to him, had an answer. He had extensive connections within Latin America that he had obtained either through bribes or previous operations.
"I can talk to my people in Panama," Gomez said. "I'm sure they would love to replace First American and become Arkansas' sugar daddy. They're always looking for good 'Third World' investment opportunities. Maybe they want to buy stock in Arkansas. I'm sure they will be interested, especially considering the capabilities that are in place thanks to Mr. Seal's and Terry's efforts."
"Excellent idea, Maximo," Cathey chimed in. "I'll go with you to see Noriega's people. If we're successful, Aki, you can brief Nash that there'll be a new 'investor' for Arkansas, which means he can begin curtailing his bond underwriting through First American. And Terry, for the record, exactly what capabilities are in place here as a result of Rose. Just what do we have to sell [to the new investors]?"
Terry, having the most direct knowledge of the "assets" in place in Arkansas during the past two years, then began his briefing on what they were. And they were substantial.
"Just about any high technology manufacturing expertise needed to produce high-quality, world-class weapons components up to .50-caliber at the present time," he said. There was metal-casting capability for both ferrous and non-ferrous materials. The company providing that service had a wide array of computerized modern design and testing equipment.
"We have non-destructive testing equipment, which includes X-ray, magnetic particle inspection, finite element analysis and state-of-the-art CAD (computer-assisted design) capability," Terry continued. "We also have a wide range of modern machining options to include computer numerical controlled (CNC) machine tools, plus metal-treatment and plating capabilities.
"In the electronics area, there is the sibling of the Albuquerque-based, military-approved facility located in Piggot, Arkansas, that has automated circuit board manufacturing and enclosure capability. As I understand it, they're making perfect copies of stinger circuit boards."
Terry had given a detailed explanation of the high-grade weapons manufacturing facilities that had been secretly put in place in Arkansas to support Operation Centaur Rose. He had described decentralized, modern manufacturing factories possessing in-house, computer-controlled capabilities to produce untraceable weapons parts or components.
This enabled the Enterprise to bypass the traditional arms suppliers who must document and serialize certain parts they produce. Without such controls, federal agents would have little way of discovering their manufacture.
The Agency had thought of nearly everything, including a method of secure transportation. "No paper, no trail," Seal had said in describing the operation to Terry.
Terry continued. "All of this combined with the secure waterway transportation system afforded by the Arkansas and Mississippi Rivers, which are controlled by the U.S. Army Corps of Engineers, and I would say to a potential investor we've got a complete, turnkey weapons manufacturing capability for anything short of nuclear weapons." Terry smiled.
Cathey mused and said: "How do you know Clinton doesn't have that, too? It sounds like you've done too good of a job, Terry. Considering the nuclear reactors here that could breed fuel, we had better add Arkansas to the list of Third World countries that could produce a nuke."
So it was all in place -- weapons, transportation and the money to finance it all. But it had been jeopardized because of unprofessional behavior and greed.
Sawahata understood that the ability to handle "questionable" financial transactions would be the best selling point of all. "John, besides what Terry just explained, I think Noriega's people will be most attracted to money-laundering aspect. Under Bill Clinton's leadership, Arkansas has set in place permanent money-laundering industry concealed as their everyday municipal bond business. They do not care where funds come from. In fact, dirtier is better."
Regardless of the method used by the money-launderer, the common denominator is finding a bank or financial institution along with people in a position of power who are willing to break the law and not ask questions. Money laundering, by definition, involves co-mingling clean and dirty making both indistinguishable. Arkansas offered this environment under the umbrella of its cooperative bond business.
All that was lacking was a way of consistently and inconspicuously moving large amounts of money offshore to be deposited as collateral against loans generated for industrial development. Once this activity was underway, occasionally dirty money could be substituted by the Agency for clean money without drawing attention to it. *
One such case in point is the record of the Arkansas Development and Finance Authority (ADFA) depositing $50 million offshore with the Fuji Bank, Ltd., in the Cayman Islands on December 29, 1988. This was a very strange transaction indeed, for an organization chartered and founded on lending money for investment and development within Arkansas, not for moving large sums of funds offshore.
Fuji Bank's name reappears as being the bank that purchased the industrial development loan of POM Inc., the parking meter company in Russellville, Arkansas, owned and operated by the Ward family. Oddly, the underwriter, or issuer, of this loan was initially an out-of-state bank in Memphis, named First American, the same name as Clark Clifford's bank, First American Bancshares in Washington.
By purchasing the loan from First American Bank of Memphis, Tennessee, Fuji effectively retired the loan and the Ward family presumably continued making their payments directly to Fuji. This was curious behavior on behalf of POM since they were giving up a long-term, fixed rate, low interest loan issued by ADFA, which had a guarantor, the bank in Memphis, to back it up. Curious behavior, indeed, to forfeit a loan that has a co-signor, since this action would normally reduce a company's line of credit. Unless, of course, the objective was to move the loan offshore, where repayment ledgers are nearly impossible to attain. Webb Hubbell, Hillary Clinton's law partner, was POM's corporate attorney at the time.
ADFA, being a state authority, is not legally required to publicly divulge its records. And therefore, the millions of dollars that flow through the Arkansas agency's coffers can be shrouded in secrecy, just like the money that flowed offshore in the ADFA "investment" just cited. One possible reason the money was deposited in the Cayman Islands was to set up a laundering process similar to that provided by Panamanian banks.
Panama, then under the leadership of General Manuel Noriega, was the main country of choice for drug traffickers wanting to hide their money. But even safely in Panamanian banks, there was still the problem of moving the funds, particularly into the United States. But Arkansas offered its own version of what bankers' slang calls "the Dutch sandwich."
The Dutch sandwich is a method perfected in the Netherlands Antilles, a small group of Caribbean islands off South America, and is a legal tax avoidance maneuver in the Antilles. [11] There, funds, dirty in this case, remain offshore on deposit and are used only as collateral to back legitimate loans in the United States.
Legitimate loans are what Arkansas needed to underwrite industrial development bonds at low interest rates to attract business to the state. If Arkansas allowed the CIA to guarantee its loans by collateralizing its industrial bonds with dirty, off-shore money, the interest from the loan which is repaid in the form of clean money by the borrower, has in reality accomplished the goal of generating clean money from dirty money.
Arkansas, in effect, could become the "cooperating banker" in the equation. The owner of the dirty money would get back clean money from the stateside loan's interest. In this case, the stateside bank, a bank like First American, supplied the up-front cash through CIA sources.
This apparently was what Sawahata was referring to when he said "the dirtier, the better." Sawahata then continued: "I suppose if you have to launder money, it is very secure way even though there is risk, considering the fact that a high per cent of out-of-state businesses Arkansas recruits fail within the first few years of being transplanted. But, when it pays off, it pays off well ...you get back clean money plus tax-free interest and no one in Arkansas asks questions ...at least not at state auditor level. "
Sawahata noted that the state gets the high-risk venture capital it needs to grow and the investor can't complain when he loses his money in what appears to be the normal course of business. But to offset this risk, the "investor" could even attend the bankruptcy sale if a business failure occurred, and possibly buy back his undocumented, and hidden, assets wholesale.
Through possible combinations of laundering CIA money, either off-shore, domestically, or by direct infusion into the lending system, the Clinton administration had evidently developed an insatiable appetite for money that could only be compared to that of the plant from outer space in the movie "The Little Shop of Horrors" which continually said, "Feed me, feed me."
"So far," Sawahata continued, "they have gone through all Mena black money that started it all. Now, they are laundering First American's black ops' proceeds and we are going to help them attain Panama as client? What a deal for Arkansas! Money-launderer's nirvana!"