I see that Lew Rockwell has a podcast today with Russ Baker, the founder of the site, WhoWhatWhy.com, from which this piece is published.

Interesting background here on UBS, the Swiss bank (and leading kleptocrat) involved in the biggest off-shore scandal in recent history (hat-tip to The Daily Bell commenter who posted it):

“It is worth pointing out that one of three Senate co-sponsors of the Stop Tax Haven Abuse Act of 2007, introduced even before the UBS situation was known, was none other than a then-senator named…Barack Obama. The House sponsor was Rahm Emanuel—who would go on to be President Obama’s Chief of Staff. Another, weaker bill was proffered by Sen. Max Baucus of the Finance Committee—parts of which did just quietly become law as part of an employment stimulus bill signed by Obama in March, 2010, with the goal of capturing lost tax income as a way of financing job creation.

“In any case, it has become increasingly clear that tax evasion is but a piece of a troubling larger picture. The states of New York, Texas and Massachusetts sued the bank in 2008, accusing it of misleading investors about risks in its auction-rate securities market. UBS executives dumped their own holdings when the supposedly safe investments took a nosedive, yet continued to recommend them to customers. In Puerto Rico, a Bloomberg News reporter found, UBS had created its own closed-loop system for generating profits —it advised the Commonwealth to issue bonds, marketed the bonds to investors through UBS mutual funds, and then loaned the mutual funds money so they could buy the bonds. As James Cox, a Duke law professor and expert on finance and law said at the time, “I’ve never seen such a blatant series of conflicts of interest.”

In a filing last June, New Hampshire‘s securities regulator charged UBS with “dishonest and unethical” practices in selling notes from the now-defunct Lehman Brothers, causing New Hampshire investors $2.5 million in losses. Wrote one securities lawyer on Forbes’ website: “UBS is going to have to account for why it continued to aggressively market Lehman notes to retail customers as highly conservative investments at the very same time its institutional side was facilitating transactions designed to mask Lehman’s financial troubles.”

Further south, Brazilian police arrested officials of both UBS and the insurance giant AIG as part of a half-billion-dollar tax avoidance scheme, alleging that the companies used suspected black market money-changers to spirit the funds out of Brazil to Switzerland. At the time, the daily newspaper O Estado de Sao Paulo published a picture of a man in handcuffs, identified as a UBS executive, and reported that he told one of the arresting officers: “I’m not going to stay in custody. Anyone who has money in [Brazil] does not stay in custody.” Things are not necessarily so different up north. The only company official sent to jail in the United States thus far in connection with the massive tax evasion case was, remarkably, the former employee who blew the whistle on the scheme in the first place.

AN ATTRACTIVE FELLOW

The Obama-UBS relationship began on a December day in 2006. According to his calendar, the presidential hopeful was visiting New York City to speak at a fundraising dinner for children in poverty. Beforehand, though, he attended a much more exclusive gathering—in the midtown Manhattan conference room of billionaire George Soros—for a dozen wealthy figures eager to have a closer look at the prospect.

One attendee was UBS executive Robert Wolf. Then just 45, he had already been a major fundraiser for John Kerry’s 2004 presidential bid and for congressional Democrats in 2006. For 2008, he had initially backed a moderate, Mark Warner, the former governor of Virginia. But when Warner decided not to run, Wolf turned to Obama, liked what he saw, and signed on.

His motivation, Wolf told New York Magazine in 2007, was simple: “I’d like my children to soon see a president give a State of the Union address and have both parties applaud.” He praised Obama’s early opposition to the invasion of Iraq. And he told Business Week: “I found him to be unbelievably refreshing and smart and thoughtful.” Wolf soon became a top fundraiser. By the time of the New York article, he had already hosted two big cocktail parties, made a lot of calls, and brought in more than $500,000. It was through people like Wolf that Obama was able to match and then pass Hillary Clinton in fundraising for the primaries.

Another person who attended that exclusive session with Obama was a financier by the name of Hassan Nemazee. Nemazee’s story circles back to UBS, through his involvement with Harken Energy, an obscure but supremely well-connected company that UBS took an unusual interest in keeping afloat. In the process, it illustrates how byzantine and pervasive the new trans-partisan money world has become. The complexity helps explain why reporters so often shrug and move on. They should pause more often; within that complexity resides an important truth about American democracy.

THE CLINTONS’ HOT MONEY MAN

Over the years, Hassan Nemazee had become, like Wolf, a major Democratic fundraiser and insider. More importantly, he was deep into the Clinton inner circle. So much so, that he and a partner used an investment firm they had recently acquired, Carret Asset Management, to provide a lucrative perch to Terry McAuliffe, the Clintons’ confidante and money man. (This was in the period between McAuliffe’s chairmanship of the Democratic National Committee and his chairmanship of Hillary Clinton’s presidential campaign.)

This indebted the Clintons further to Nemazee, who had been an avid supporter of Bill Clinton’s presidency and major donor to his defense fund during the Monica Lewinsky/impeachment saga. Nemazee for his part was rewarded with appointment as ambassador to Argentina—an offer that was withdrawn, however, when Forbes reported that he had improperly represented himself as a “Latino” in order to secure targeted bond business from the state of California.

As with UBS’s Wolf, Nemazee’s substantial fundraising soon begot true insider status. The campaign even asked Nemazee to publicly defend Ms. Clinton when another top donor, Norman Hsu, was arrested as an alleged swindler and campaign finance fraudster (Hsu was later convicted.)

Nemazee was frequently characterized as a “top foreign policy adviser” to Ms. Clinton. Probably his closest thing to real foreign policy credentials was the fact that his father was one of the richest men in Iran under the dictatorship of the Shah Reza Pahlavi, and a close ally of the deposed leader. At the time of the meeting to size up Obama in Soros’s office, Nemazee was simply window-shopping, as he remained committed to Hillary. But when Hillary dropped out of the race, Nemazee became a major Obama fundraiser. And once Hillary became Obama’s secretary of state, according to insiders, she pushed the administration to take a tougher line with Iran’s revolutionary Islamic government than Obama preferred. In so doing she renewed the appreciation of the retinue around the exiled Pahlavi faction, which still hopes to return to power one day, directly or indirectly.

Notwithstanding Nemazee’s largesse, both Clinton and Obama must have had second thoughts this past September, when the financier was arrested on charges of bank fraud. Since then, Nemazee has pled guilty to defrauding several banks over the course of a decade, through the use of false collateral documentation, to the tune of $292 million. In a brief flurry of coverage, Nemazee’s downfall was smirkily dismissed as just another day in the hothouse of Democratic corruption. The media has shown little further interest in Nemazee, and in what his arc signified.

This is unfortunate as it was not just a story about Democrats—or Republicans either, although they were involved. Rather it was the edge of an amoral iceberg that is essentially trans-partisan and that constantly exerts influence on presidents and would-be presidents of all stripes.

The outline of that larger reality becomes apparent when one traces Nemazee’s path back more than two decades. In that earlier epoch, we find Nemazee mixed up again with Soros and UBS and a would-be president. At that point the rising star was not Barack Obama, but George W. Bush.

GROWING A BUSH

For many years, Hassan Nemazee has been a business partner of, and shared offices with, a man named Alan Quasha. And both of them have been involved with a company called Harken Energy, a mysterious outfit with links to some of the world’s most powerful and odiferous regimes. Harken, Nemazee, Quasha (and UBS) first came to my attention while I was researching my 2009 book, Family of Secrets, which is an investigative history of the rise of the Bush family and the special interests behind them. I was examining George W. Bush’s run of good fortune in the 1980s when his failed oil ventures repeatedly became golden as larger ventures scooped them up and increased his remuneration. Texas-based Harken Energy, the biggest of these, paid Bush more than he had ever earned, gave him a nice board position, and basically freed him up to move to Washington and work on his father’s 1988 White House race.

Just as Nemazee and Quasha would later take care of Hillary Clinton’s guy—McAuliffe—so he could concentrate on preparing for her campaign, years earlier they had supported George W. Bush while he helped develop strategy for his father’s campaign. In the process Harken took Bush, a man without much to show for himself as a businessman, and gave him the credibility and financial means with which to embark upon a political career—which he did soon thereafter.

Why had Harken adopted Bush? The few media organizations—Time and The Wall Street Journal among them— that looked into Harken concluded that something was fishy about the venture itself. The company’s structure and transactions were unnecessarily convoluted. It violated most of the rules of sound business practice yet somehow continued to exist despite the fact that it rarely made money for its public shareholders.

It was nigh impossible to figure out where the funding for Harken originated, beyond shell companies in offshore tax havens such as the Netherlands Antilles. But what it actually did was nothing short of astonishing. In 1986, the year George W. Bush entered the picture, Harken had total revenue of four million dollars. Three years later, thanks to a flurry of acquisitions and infinitely complicated transactions, revenue would exceed a billiondollars. Notwithstanding its general precariousness and obscurity, Harken somehow managed to assemble backing from global superstars, ranging from the billionaire investor Soros (at one point the largest Harken shareholder), and Harvard University’s endowment, to interests tied to the Saudi elite, to then-Philippine dictator Ferdinand Marcos, and to the deposed Shah of Iran. In other words, this obscure company somehow was catnip to brutal and corrupt foreign leaders who had grown fabulously wealthy at the expense of their people—and who collaborated closely with the highest levels of the US military-intelligence-corporate establishment. (Soros’s role seems especially strange; he went on to become the leading single funder of efforts to deny President George W. Bush a second term.) UBS was among the banks that profited from this dubious funding.
UBS had taken a position in Harken at a moment when the company was on the shoals. Coincidentally or not, this also was when George W. Bush—son of vice president George H.W. Bush—was part of the corporate board. UBS’s role struck the Wall Street Journal as odd, in part because UBS was not known for investing in small American firms like Harken.

Facing regulatory difficulties over its investment in Harken, UBS ended up unloading its stock to Abdullah Taha Bakhsh, a Saudi tycoon with separate business ties to James Bath, a key Bush family operative who fronted for Saudi interests in Houston. Bakhsh was also a business partner with a Saudi royal family favorite labeled by the Federal Reserve as a “front man” for BCCI, or Bank of Credit and Commerce International.

For those who have forgotten, BCCI was a criminal banking operation whose customers ranged from Western intelligence agencies to drug cartels and terrorist organizations.

Shortly before UBS helped bail out Harken, it had partnered with BCCI in a Geneva-based bank. BCCI was eventually shut down in raids commenced by the British government, after intense investigations by Senator John Kerry’s Foreign Relations terrorism subcommittee and the Manhattan DA. But evidence of its ties to the highest levels of the US government under Ronald Reagan and George H.W. Bush, extensively uncovered by investigators, was repeatedly rebuffed by superiors and by regulators. It is worth noting that the Treasury Department official responsible for scrutinizing BCCI’s affairs in the Reagan-Bush administration was assistant secretary for enforcement John M. Walker Jr.—who happened to be the cousin of George H.W. Bush. (Bushes have for generations been involved both in government and banking, with another close relative serving as a top official at Lehman Brothers before it precipitously failed. More on this topic, and on George H.W. Bush’s secret past in deep covert intelligence work, can be found in my book, Family of Secrets. )….”

Read the rest of “The Game That Goes On and On” at WhoWhatWhy.com