From KALLISTE@delphi.comThu Oct 10 20:49:28 1996
Date: Thu, 10 Oct 1996 19:09:41 -0500 (EST)
From: KALLISTE@delphi.com
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Subject: Tenacious Tentacles
Tenacious Tentacles
by J. Orlin Grabbe
Both the Wall Street Journal and William Safire
are getting to the nitty-gritty of paid political influence in
the Clinton administration. Both have been inquiring into
the political fund-raising activities of Mochtar Riady's
Lippo Group.
Mochtar Riady is the Indonesian billionaire who
was a joint investor with Little Rock billionaire Jackson
Stephens in Worthen Bank, which bailed out the 1992
Presidential campaign of Bill Clinton with a three million
dollar loan at a crucial juncture.
Safire has been wondering about the propriety of
former Lippo employee--and current finance vice
chairman of the Democratic National Committee--John
Huang's conducting of $25,000-a-plate Presidential
dinners at the Hay-Adams Hotel, across the street from
the White House. The Wall Street Journal similarly
wonders how the millions of dollars poured into the re-
election efforts of Bill Clinton by the Lippo Group have
influenced U.S. commercial policy in Asia.
The Lippo Group is still represented in Arkansas
by Joseph Giroir, a former Rose Law-Firm managing
partner, who, on one of Ron Brown's "trade" trips to
China, secured a $1 billion deal between Entergy and
Lippo to build a power plant in China. Giroir works out
of the firm he set up to do deals like this, Arkansas
International Development Company.
The same set of characters has been parading in
and out of the continuing Little Rock saga for quite a long
time.
Recall that it all started when an investor group
that included Jackson Stephens took over First American
Bank in Washington, D.C. This bank was headquartered
near the White House, and had many government
employees as account holders--the perfect vehicle for
gathering political intelligence. To take advantage of this
fact, Jackson Stephens proposed that his software firm
Systematics handle all the accounting for the bank. But
the investor group refused to go along.
So Stephens, with the help of Bert Lance and
others, brought in BCCI (Bank of Credit and Commerce
International) to wrest control of the bank from that
group, and to put it into the hands of friendlier partners.
There were lawsuits, and Stephens' software firm
Systematics was represented by Joseph Giroir, Hillary
Rodham Clinton, and Vince Foster of the Rose Law Firm.
Hillary Clinton is now the First Lady of the U.S.
Vince Foster is now dead, and the mysterious
circumstances of his death are being investigated by the
Special Prosecutor Kenneth Starr. Joe Giroir now does
paid favors for the Lippo Group.
The software firm Systematics was to become the
nation's biggest supplier of back-office banking software,
and would eventually work closely with the National
Security Agency to facilitate intelligence monitoring of
banking transactions. Vince Foster would be assigned by
Stephens to an oversight role on this project.
Jackson Stephens, meanwhile, proposed,
developed, and financed a plant for hazardous waste
facilities, called Waste Technology Inc., beginning in
1979. This project became a bottomless pit for the
consumption of funds, and at one point, the financially-
strapped Stephens made a Faustian pact with Indonesian
Mochtar Riady to set up a money-laundering operation in
Arkansas. Stephens and Riady had previously formed
Stephens Finance Ltd. in Hong Kong in 1976.
Stephens bought 9.3 percent of Little Rock's
Worthen bank from the John H. Hendrix Corp. of
Midland, Texas, while Lippo purchased 9.4 percent.
Lippo paid about $16 million for its share, and installed
James Riady as a bank director in 1984. Stephens-Lippo
continued to increase their share of Worthen stock, up to
36.7 percent.
This propitious union came about just as the
Mena, Arkansas, drug-and-arms trade was creating a vast
local demand for money-laundering services. At the Asian
end, with Mochtar Riady, Stephens purchased Seng Heng
Bank in Macao, the "Oriental Las Vegas", where
gambling is the primary source of government revenue.
Stephens' Systematics supplied software to the Banco
Nacional Ultramarino, the cashier and treasury bank of
the Macao government and the bank that issues the local
currency. (Macao is located less than 40 miles from Hong
Kong, the center for heroin trade.)
The cozy relationships continued. Hillary Clinton
became the intellectual property lawyer for Systematics,
and obtained access to important materials from
Systematics clients, such as the operating system for a
new national security computer at E-Systems of Dallas,
Texas, which the CIA determined ended up in the hands
of the Israelis after a month's time.
Systematics also came to be represented by Beryl
Anthony, a partner at the Washington law office of
Winston and Strawn, former chairman of the Democratic
Congressional Campaign Committee, and husband of
Vince Foster's sister Sheila Foster Anthony. It was Sheila
Anthony who, while assistant attorney general for
legislative affairs at the Justice Department, effected a
$286,000 transfer to Vince Foster from a Democratic
National Committee account held at Mellon Bank, just
four days before Vince Foster met his death. Upon
Foster's death, Hillary Clinton hopped on the phone and
directed the removal of files from Foster's office.
Worthen Banking Corp. was sold to Boatmen's
Bancshares Inc. of St. Louis in 1995 for $535 million.
Members of the Stephens family owned 22 percent of
Worthen at the time of the sale, and acquired shares in
Boatmen's. In addition, the investment bank Stephens
Inc. retained the right to handle the trades (and to collect
commissions) for Worthen Investments, which was folded
into Boatman's Investment Services, Boatman's securities
subsidiary. (All other securities trades at Boatman's
Investment Services are handled by Pershing Inc. of New
Jersey.)
Currently, Boatman's Bancshares Inc. is being
acquired for around $9 billion by NationsBank Corp. of
Charlotte, N.C. This merger will make NationsBank the
fourth largest U.S. banking franchise. The investment
bank Stephens Inc. was brought in to give a "fairness
opinion" on behalf of NationsBank Corp. shareholders,
even though the Stephens family, through their Boatmen's
stock holdings, stand to make more than $200 million on
the acquisition. Also standing to gain on stock holdings is
Curt Bradbury, the chief operating officer at Stephens
Inc., and also the former chief executive of Worthen
Bank. Stephens Inc. represented NationsBank in the
merger negotiations, while Goldman Sachs represented
Boatmen's.
NationsBank has its own discount brokerage
service, NationsBank Discount Brokerage Inc., which
clears its trades through Stephens Inc. Stephens Inc. is
trying to acquire all of NationsBank's brokerage business
after the merger of Boatmen's and NationsBank is
complete. If so, that would make Stephens Inc. the largest
clearing firm for banks in the U.S. It clears the brokerage
trades for around 200 banks--banks like Wells Fargo and
First Interstate Bancorp, which recently merged in
California.
Meanwhile, over in Indonesia, the Riady family
has stirred up consternation among the minority
shareholders in the Lippo Group by a planned
restructuring that would enable the family to extract cash
to invest elsewhere. The new primary ownership vehicle
is intended to be a "financial supermarket" named Lippo
Securities. Under the plan, the Riady family would
increase their ownership of Lippo Securities from 19
percent to 50 percent. Lippo Securities would in turn be
the major owner of the insurance company Lippo Life,
increasing its ownership share from 4.9 percent to 32
percent. Lippo Life would then buy a 40 percent stake in
Lippo Bank. The Riady family would sell their interest in
the latter institution. The deputy chairman of Lippo
Group is James Riady, a former director of Worthen
Bank.
After the Fifth Column began looking into the
financial affairs of Jackson Stephens, Stephens hired an
international assassin, Pablo Vitale Rodriquez, to kill the
Angel of Death. When Pablo failed to do the job,
Stephens then teamed up with Don Tyson and Richard
Mellon Scaife to purchase a $100,000 contract on the
Angel of Death from the New Orleans mafia. The New
Orleans mafia gave the contract to two ex-CIA wet boys.
Unfortunately, these two men showed up one morning,
wrapped in barbed wire and very dead, on Jackson
Stephens' lawn. Stephens had the bodies removed, but
one of them was subsequently recovered, having been
stuffed down a capped oil well in Louisiana. The corpse
is rumored to be abiding its time, waiting to show up in
Stephens' refrigerator, or served up to him as a roasted
dinner entree.
A couple of details need to be cleared up.
". . . Lippo was also generous with Webster
Hubbell, paying him for unspecified legal work on his trip
from the Justice Department to federal prison. The
amount was never revealed in Mr. Hubbell's depositions,
but was reported by Mr. Safire as $250,000" ("Who is
Mochtar Riady--II", Wall Street Journal, Oct. 9, 1996).
Well, the amount wasn't $250,000. As I reported back in
March, the correct figure is $500,000. And "unspecified
legal work" is a short-hand way of saying "a bribe to keep
his mouth shut".
Safire himself, meanwhile, has joined the chorus
of indictment nay-sayers, referring to "the Independent
Counsel, a part-time prosecutor who won't bring
indictments until after the election" ("Absence of
Outrage," The New York Times, October 10, 1996).
Sorry, Mr. Safire. You'll now have to go stand in the
corner with all the other morons of the media.
October 10, 1996
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