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DATE: November 19, 2004
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CHERY GLASER, anchor:
The recent death of Yasser Arafat has left a lot of questions about the way he handled the finances of the Palestinian Authority. Today, Bloomberg News reported that Citigroup, the world's biggest financial services firm, invested more than 6 1/2 million for the Palestinian leader as recently as two years ago. Citigroup was reportedly working on behalf of Arafat at a time when he may have been paying militants and channeling Authority funds into his personal accounts. We asked MARKETPLACE's Bob Moon to follow the money.
BOB MOON reporting:
A tantalizing story about Citigroup's supposed financial work for Yasser Arafat was enough to raise some eyebrows, especially given the financial firm's recent private banking embarrassment in Japan. Authorities there ordered the shutdown of Citigroup's private banking operations earlier this year, citing sloppy practices that opened the door to possible money laundering. But in this case, Citigroup's practices apparently weren't all that unusual. James Prince, head of the human rights group the Democracy Council, says his people looked into the investments cited in the Bloomberg report and didn't find anything wrong.
Mr. JAMES PRINCE (Democracy Council): The confusion and the lack of information about the Palestinian finances leads a lot of people to draw connections to Palestinian leadership. In fact, Palestinian Authority has a number of different assets and different enterprises. There's no evidence that Yasser Arafat played a direct or even an indirect role in the activity of this one particular account.
MOON: And Prince says this was the only account his group found involving Citigroup. Charles Intriago, a former federal prosecutor who heads moneylaudering.com, says since passage of the Patriot Act, banks are required to know the source of money from political figures.
Mr. CHARLES INTRIAGO (moneylaundering.com): And not receive it if there's any indication that they came from corrupt activities or that the funds were destined for the commission of any crimes, including terrorism or other misdeeds.
MOON: On the other hand, Intriago says, that doesn't mean all financial firms have been careful about the money they handle. He says many banks are still too quick to accept the funds of political leaders without knowing just where the money came from. In New York, I'm Bob Moon for MARKETPLACE.
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