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E. J. Bean
Another problem was that we all worked at different speeds with different writing styles. In the future, as the fastest writer on the crew, I typically cranked out the first draft, while Bob, our best editor, caught errors and strengthened the analysis. But that writing partnership had yet to form. Back then, we were still learning how to mesh our efforts with uneven results. The final report was over 400 pages, six times longer than the private banking report. It was jam-packed with details. To make it readable, we added an executive summary, factual findings and recommendations, and a chart summarizing the ten case studies. The report disclosed that virtually every U.S. bank examined, from Chase Manhattan to Bank of America, First Union, and Citigroup, had opened correspondent accounts for high-risk offshore banks with minimal screening and monitoring. The case studies detailed how the offshore banks had misused their U.S. accounts to move billions of suspect dollars, including funds associated with drug trafficking, financial fraud, or illegal gambling. In some cases, the offshore bank itself seemed to have engaged in criminal conduct; in others, the offshore bank seemed not to care whether its clients had done so. All of the offshore banks had limited staff and resources, and relied instead on their U.S. correspondents to take deposits, record transactions, change currencies, and move funds. Their U.S. accounts had provided an open gateway into the U.S. financial system for criminals and money launderers. The case studies included four shell banks formed in Antigua, the Bahamas, or Cayman Islands. As far as we knew, shell banks had never before been profiled with the level of detail we were able to provide, exposing in particular how they used their U.S. accounts to transfer illicit proceeds. We showed how the absence of a physical office and local employees meant regulators had no place to go to inspect a shell bank’s records, observe bank operations, or seize suspect funds. Shell banks instead benefited from a shifting, shadowy existence, often operating from the offices of a related company, residence, or undisclosed location. The report attempted to show why it was time to shut the door on U.S. correspondent accounts for those high-risk banks. Senator Levin released the report in February 2001. As with our first report, although the investigation had been conducted in close cooperation with our Republican colleagues, we issued it solely as a minority staff report. Its release generated a stack of media stories that paved the way for related hearings at the beginning of March.
