Clearstream

Clearstream Banking is a Bank and a transaction clearing company based in Luxembourg (Europe) created in January 2000, previously known as Cedel (est. 1971) specialized in clearing until 1996 when it changed its statutes to become a bank. Cedel, which is a conglomerate of 92 banks, has 50% of Clearstream; the other half is owned since 1999 by compensation company Deutsche Börse (or German Stock Exchange). The purpose of Clearstream is to facilitate money movements around the world, particularly by handling the settlement of European stocks and bonds (estimated 40% market share in year until May 2004). In 2002, Clearstream was the 12th biggest employer in Luxembourg [1].

It has often been described as a bank of banks and practices what is called financial clearing. Basically, its attributions are to record each movement between accounts of different banks and calculate the position of banks towards each other. When a bank makes a movement, in lieu of carrying a case full of bills, it just transmits an order to Clearstream to credit/debit one of their own accounts and their counterparty's account(s). The system has been extended to regular companies and governments around the world.

Euroclear and SWIFT are rival transaction clearing company. Euroclear was created by JP Morgan in 1968 in Brussels (Belgium). End of 2000, JP Morgan disengaged itself of Euroclear, but is still one of the 120 international banks that owns shares in Euroclear. Euroclear realized 145 millions transactions in 2000, for an amount of 100 000 billions euros, according to french newspaper "Le Monde".

Clearstream became in the consequence of several Daewoo shutdowns in the year 2000 in Lorraine (France) article of two commissions of inquiry (before the French parliament and before the European parliament).

"The greatest financial scandal in Luxembourg"

Clearstream has been at the heart of a financial scandal since 2001 when Denis Robert and Ernest Backes released a book called "Revelation$" (Editions des arènes, 75005 Paris, France ISBN 2-912485-28-2) followed by "La Boite Noire" Denis Robert (Editions des arènes, 75005 Paris, France ISBN 2-912485-38-X ) describing what has been named the greatest financial scandal in the Duchy of Luxembourg. The little that has been published on this scandal was in french media, and even there, ressources were scarce. In various interviews, Denis Robert has accused "Le Monde" of deliberately not speaking about his book, and suggested financial links between "Le Monde" and German Stock Exchange (aka Deutsche Börse).

Juridical investigations

The Tribunal of Luxembourg opened up an investigation on February 26th, 2001. The judge declared that no proofs of "systematic manipulations" could be found, but they did acknowledged the existence of proofs concerning accounting manipulation and tax evasion. However, they dropped the case on the 30th of November 2004 as no charges could be laid due to the statute of limitations. The original Reuters news article (11:27:47 December 1, 2004) describing the closing of the money laundering probe avoids all mention implicated by the statute of limitations. This is rather unusual for such a news agency, but needs to to be put into context. Deutsche Börse is now the owner of Clearstream and Reuters is dependent on it to supply its data feed to their subscribers. Beside Clearstream, Deutsche Börse also owns German Stock Exchange and Eurex terminal market. The Reuters article states that Clearstream successfully sued Backes and french newspaper "Le Figaro" for libel but deliberately fails to follow up the initial judgements. The Reuters article was authored by [email protected] (Tel. +32 2 287 6810, Fax +32 2 230 77 10 [email protected]).

Ironically Reuters quotes Deutsche Boerse's Chairman Designate André Roelants stating "This announcement is very important as it closes once and for all this chapter." Another one is opening though, namely how can the press report independently in an era of emerging powerful oligopolies.

On May 15, 2001, André Lussi, chief executive officer of Clearstream, was suspended of his functions, before being definitely dismissed on December 31th, 2001. On February 2004, an investigation was opened against André Lussi, under the suspicions of money-laundering, fraud and other tax evasion charges. [2] [3]. André Lussi was replaced by André Roelants (who was before with Dexia).

Denis Robert has been sued for defamation by Clearstream and several banks and companies incriminated by the book (50+ different cases - among whom Bank Menatep, Banque Générale du Luxembourg, etc., in which the author and his editor Laurent Beccaria were acquitted in all but two cases -where damages were awarded of one Euro) By a judgement on October 1, 2003, the Court in Paris rejected all off the finance company's requests (Clearstream was asking for 500 000 Euros because of "defamation"). The judges considered that the information revealed on the activities of money-laundering by Clearstream were "serious and cross-checked, deprived of animosity and expressed with caution" [4].

"Capital Tax, Fiscal Systems and Globalization" intergroup of the European Parliament

With Ernest Backes, Denis Robert presented "Revelation$" to the Capital Tax, Fiscal Systems and Globalization intergroup of the European Parliament in March 2001 and also at the French National Assembly. The European Commission did not react to the question raised by Harlem Désir and Glyn Ford who asked the Commission to investigate the accusations brought forward by the book and to ensure that the 10 June 1990 directive on control of financial establishment be applied in all member states in an effective way. Commissioner Bolkestein applied that "the Commission has no reason to date to believe that the Luxembourg authorities do not apply it vigorously". [5]

Ernest Backes' revelations

In his book, Denis Robert describes Clearstream as a huge money laundering machine, used by major banks all over the world. Ernest Backes, who was #3 of Clearstream, declared that he had helped set up a system of non-published accounts in the mid-70's, with Gerard Soisson, then Cedel's manager. Those secret accounts were used to hide money for the purpose of money laundering, tax evasion, accounting manipulation and fraud. But some of Clearstream published accounts numbers makes it possible to find back the trail of financial movements, especially concerning the Taiwan frigates scandal (concerning the selling by France of six frigates to Taiwan at the start of the 1990's, which lay way to huge amounts of retrocommissions, with Andrew Wang as a major figure [6])[7], the Elf scandal in France, as well as the "Kremlingate" which implicated Menatep, owned by Mikhail Khodorkovsky, when IMF funds were suspected of being diverted in various banks, including US banks (see chapter on Russia in "Globalization and Its Discontents" by Joseph Stiglitz, former vice-president of the World Bank). Strangely, Iraqi-born Nadhmi Auchi appears to be a main figure of the construction of this system.

Ernest Backes was fired from Clearstream in May 1983. Two months later, Gerard Soisson was found dead in Corsica. According to Backes, he "was fired because (he) knew too much about the Ambrosiano scandal. Banco Ambrosiano collapsed in 1982, in strange circumstances involving the mafia, Vatican Bank and P2 freemasonry lodge. Ernest Backes explains himself: “When Soisson died, the Ambrosiano affair wasn’t yet known as a scandal. (After it was revealed) I realized that Soisson and I had been at the crossroads. We moved all those transactions known later in the scandal to Lima and other branches. Nobody even knew there was a Banco Ambrosiano branch in Lima and other South American countries.” [8]

Anonymous denonciations about the Taiwan frigates scandal

Beside the investigation opened up by the Duchy of Luxembourg which was dropped in November, 2004, an investigation has been opened up in July, 2004 by Paris after anonymous denonciations concerning the Taiwan frigates scandal. Following those denonciations, Andrew Wang [9], one of Taiwan's key figures concerning arms contracts, passed on money to several very important French officials from 1999 to 2003, using Clearstream [10]. Colombians drug-dealers and a russian oligarch also issued some of those payments, according to those same anonymous denonciations [11]. Andrew Wang had perceived a high part of the commissions given during the selling of the frigates. According to Luxembourg's public prosecutor, the investigation has not confirmed money-laundering suspicions concerning the Taiwan frigates and Menatep. However, Dominique de Talancé and Renaud Van Ruymbeke, french judges in charge of the Taiwan frigates investigation, made a perquisition in Clearstream's offices in Luxembourg. Just in case...

Banks with accounts in Clearstream

• Banque Générale du Luxembourg
• Bank Menatep
• Crédit Lyonnais
• Société Générale
• Banco Ambrosiano
• Vatican Bank ???
• Bahrain International Bank
• lots more: Clearstream is a compensation chamber. Having published accounts is not, by any means, illegal. Non-published accounts are another story.

Bibliography

• Denis Robert, Ernest Backes: The silence of the money. The Clearstream scandal. (2002, ISBN 3-85842-546-X )
• David Loader, Clearing, Settlement and Custody (operation management Series (Securities of institutes) (2002, ISBN 0750654848 )
• David M. Weiss, Global Securities processing: The Markets, The Products (1997, ISBN 0133239659)
• Lucy Komisar, Explosive Revelation$

External links

Main sources

• Clearstream home page
• Les Arenes editing house of Denis Roberts' book - translated by google
• Les Arenes links (including english)

Media reports

• International Herald Tribune article
• [sp: http://www.diagonalperiodico.net/pdfs02/08diagonal2.pdf Spanish article about Clearstream, Menatep and International Monetary Fund]
• [fr: http://www.lecourrier.ch/modules.php?op=modload&name=NewsPaper&file=article&sid=3507 French swiss article]
• other swiss article, translated by google
• [fr: http://www.humanite.presse.fr/journal/2002-02-19/2002-02-19-29124 French article]
• [fr: http://www.nouvelobs.com/dossiers/p2121/a272001.html French article]
• [fr: http://www.lemonde.fr/web/article/0,1-0@2-3224,36-660134@51-648305,0.html French article]
• Andrew Wang
• [fr: http://www.cfdt-banques.fr/article.php3?id_article=1315 AFP March 17th, 2004]
• [fr: http://www.politis.fr/article44.html About "La boite noire"]
• [fr: http://www.politis.fr/article1181.html Interview with Denis Robert]
• [fr: http://www.technikart.com/article.php3?id_article=539 French article]
• [fr: http://www.technikart.com/article.php3?id_article=122 french Interview]
• [fr: http://www.liberationfilms.be/article.php3?id_article=112 Film by Denis Robert and Pascal Laurent, "L'Affaire Clearstream racontee à un ouvrier de Daewoo" ]

Lucy Komisar

• [www.channer.tv/past%20programs/ wednesday,%2009-22-04.htm About Lucy Komisar]
• About Lucy Komisar, "Explosive Revelation$"
• Interview of Lucy Komisar on offshore banking and Clearstream by Lucy Komisar
• Tracking Terrorist Money - "Too Hot for US to handle?" by Lucy Komisar - Bahrain International Bank, which is suspected of moving Osama bin Laden's money, had an account number in Clearstream, according to the records given by Ernest Backes.
• by Lucy Komisar

Others

• english newsletter of Tobin tax call
• [fr: http://www.luxembourg.attac.org/ compiled info on Clearstream] by ATTAC Luxembourg.