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[AFIB] Rev. Moon's Uruguayan Money-Laundry

From Tom Burghardt <tburghardt@igc.apc.org>
Date Tue, 1 Sep 1998 17:52:01 -0700 (PDT)


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                              *****
 
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|| * --  SPECIAL  -- * September 01, 1998 * --  EDITION  -- * ||
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                       * SPECIAL EDITION *
 
                              * * *
 
                       * THE CONSORTIUM *
                   For Independent Journalism
               Web: http://www.consortiumnews.com/
                       Tel: (703) 920-1580
                  E-mail: rparry@ix.netcom.com
        - Volume 3, No. 17 (Issue 69) - August 24, 1998 -
 
                              -----
_________________________________________________________________
 
               REV. MOON'S URUGUAYAN MONEY-LAUNDRY
_________________________________________________________________
 
                         By Samuel Blixen
 
                              * * *
 
     Rev. Sun Myung Moon, who has invested heavily in media and
politics in both North and South America, has built what appears
to be a major money-laundering center in the secretive banking
haven of Uruguay.
     
     Moon, the founder of The Washington Times and a major
conservative funder in the United States, allegedly has used
religious followers to transport money clandestinely to Uruguay
and deposit amounts adding up to the tens of millions of dollars,
and possibly much more.
     
     Uruguay's bank secrecy laws and Moon's political clout have
spared his operations from significant legal action. But the
money laundry has drawn periodic attention from government and
other investigators in recent years.
     
     In 1996, for instance, the Uruguayan bank employees union
blew the whistle on one scheme in which some 4,200 female
Japanese followers of Moon allegedly walk into the Moon-
controlled Banco de Credito in Montevideo and deposited as much
as $25,000 each.
     
     The money from the women went into the account of an
anonymous association called Cami II, which was controlled by
Moon's Unification Church. In one day, Cami II received $19
million and, by the time the parade of women ended, the total had
swelled to about $80 million.
     
     It was not clear, however, where the money originated and
whether it came from illicit sources. Nor was it known how many
other times Moon's organization has used this tactic -- sometimes
known as "smurfing" -- to transfer untraceable cash into Uruguay.
Authorities did not push the money-laundering investigation,
apparently out of deference to Moon's political influence and
fear of disrupting Uruguay's banking industry.
     
     Still, a powerful Roman Catholic group and some
investigative journalists have kept up pressure on the financial
irregularities at Moon's bank. Sometimes, the scrutiny has led
Moon's organization to complain about religious persecution.
Other times, the critics have found their work a risky business.
     
     In January 1997, only two months after the money-laundering
flap, Pablo Alfano, a reporter for El Observador who had been
investigating Moon's operations, was kidnapped by two
unidentified men. The men claimed not to belong to Moon's
Unification Church, but threatened Alfano at gunpoint unless he
revealed his sources on Moon's operations.
     
     One gunman shoved a revolver into Alfano's mouth and warned
"this is no joke." After holding Alfano for 30 minutes, the
gunmen returned the reporter to his house, with a warning that
they knew his movements and those of his family. Despite the
threats, the reporter said he refused to disclose his sources.
But the message was clear: he should drop his investigation. [See
FBIS, Jan. 30, 1997.]
     
     Other critics have cited Moon's heavy-handed tactics
elsewhere in Uruguay. "The first thing we ought to do is clarify
to the people [of Uruguay] that Moon's sect is a type of modern
pirate that came to the country to perform obscure money
operations, such as money-laundering," said Jorge Zabalza, a
leader of the Movimiento de Participacion Popular, part of
Montevideo's ruling left-of-center political coalition. "This
sect is a kind of religious mob that is trying to get public
support to pursue its business."
     
     But Moon has his defenders in Uruguay, as he does in the
United States. Many Uruguayans welcome his investments, the jobs
they produce, and his charitable social programs. Moon has called
Uruguay his South American "oasis" and has invested an estimated
$200 million in the country, with more promised in the future.
     
THE COCAINE COUP
     
     Tucked between Brazil and Argentina, tiny Uruguay has
modeled itself as a South American Switzerland, granting tight
secrecy to its banking institutions. With its banks and free
trade zones, Uruguay hopes to become the financial capital of
Mercosur, South America's free trade agreement. Even critics,
such as Zabalza, note that Moon's investments have produced
needed employment.
     
     Moon first put down roots in Uruguay during the 12-year
reign of right-wing military dictators who seized power in 1973.
During the 1970s, the anti-communist South Korean religious
figure also cultivated close relations with military dictators in
Argentina, Paraguay and Chile. Moon reportedly ingratiated
himself to the juntas by assisting the military regimes arrange
arms purchases and by funnelling money to allied right-wing
organizations.
     
     Even in those early years, government investigators
recognized that one key to Moon's success was the surreptitious
use of his followers to smuggle money across borders. A 1978 U.S.
congressional investigative report found that Moon's followers
had transported large sums of cash into the United States in
violation of U.S. currency statutes.
     
     Then, in 1980, Moon expanded his South American influence
into the landlocked nation of Bolivia. There, ultra-conservative
army officers -- backed by drug lords, Argentine intelligence
agents and former Nazi commander Klaus Barbie -- staged a bloody
putsch which turned Bolivia into the continent's first modern
narco-state. The putsch became known as the Cocaine Coup.
     
     Soon after the Bolivian generals took power, Moon dispatched
some of his top lieutenants, including his right-hand man Bo Hi
Pak, to coordinate with the new rulers in La Paz. Moon's church
was so proud of its new contacts that it published a photo of Pak
meeting with Gen. Garcia Meza, a coup leader.
     
     After the visit to the mountainous capital, Pak declared, "I
have erected a throne for Father Moon in the world's highest
city." Moon's political arm, CAUSA, began joint political-
military operations with the Bolivian junta.
     
     A month after the coup, Garcia Meza participated in the
Fourth Congress of the Confederacion Anticomunista
Latinoamericano [CAL], an arm of the World Anti-Communist League,
which Moon and other Asian anti-communists founded in the 1960s.
Attending that Fourth Congress was WACL president Woo Jae Sung, a
leading Moon disciple. [See Martin Andersen's Secret Dossier, a
book about the Argentine dirty war.]
     
     During its violent two-year run, Bolivia's Cocaine Coup
government protected cocaine production inside Bolivia and
allowed cocaine shipments to processing centers in Colombia. The
emerging Medellin cartel thus gained a secure source of cocaine
while introducing modern corporate organization to the industry
and transporting vast quantities of cocaine to the United States.
     
     But the Bolivian junta suffered from widespread corruption
and incompetence -- as well as international condemnation --
leading to its collapse in 1982. After their ouster, some coup
leaders were charged with narcotics trafficking in the United
States, while Klaus Barbie was extradited to France to stand
trial on war-crime charges for his work in Adolf Hitler's
Gestapo.
     
     Later Bolivian investigations would assert that a Moon
representative had invested $4 million in preparations for the
Cocaine Coup. [For details on Moon and Bolivia, see The
Consortium, Oct. 13, 1997; Cocaine Politics by Peter Dale Scott
and Jonathan Marshall; and The Big White Lie by former Drug
Enforcement Agency official Michael Levine.]
     
A BIG INVESTMENT
     
     In the early 1980s, Moon's organization was flush with cash
elsewhere, too. In 1982, Moon launched The Washington Times, a
right-wing daily which has cost Moon an estimated $100 million a
year in losses. But the newspaper gave Moon's backers access to
the highest levels of the Reagan-Bush administrations and the
ability to influence public debate. President Reagan hailed the
new publication -- one of only two Washington-based dailies -- as
his "favorite" newspaper.
     
     In 1983, back in Uruguay, Moon expanded his South American
holdings by purchasing Banco de Credito, one of Montevideo's
leading banks. The price tag was $52 million. Uruguay's military
authorities awarded Moon a quick $8 million profit by buying back
$60 million in uncollectible loans from the bank.
     
     When democracy was restored in Uruguay in 1985, Moon's
operations survived by keeping close ties to still-influential
military officers and to conservative civilian politicians. They
helped Moon fend off opposition from civilian president Julio
Maria Sanguinetti and other critics.
     
     Later, Opus Dei, a right-wing international Catholic
organization, joined in criticizing Moon's cult-like church. The
Unification Church considers Jesus a failed messiah and Moon the
new Chosen One who is destined to rule a one-world theocracy that
will eliminate all individuality.
     
     But Moon's deep roots in Uruguayan politics and business
proved strong enough to withstand his critics. His bank brushed
aside nettlesome questions about money-laundering and other
financial irregularities. Moon's allies -- and Uruguay's secrecy
laws -- prevented even the powerful Opus Dei from forcing the
bank's financial records into public view.
     
     Through the 1980s, Moon continued to expand his Uruguayan
holdings. He bought the elegant-but-faded Hotel Victoria, the
Ultimas Noticias newspaper, a travel agency and vast tracts of
real estate. His big investments in the hotel and newspaper,
however, never generated significant profits. The newspaper never
achieved strong circulation or advertising revenues. Despite an
upgrading to five-star status, the Hotel Victoria never
flourished either.
     
BANK ALLEGATIONS
     
     Finally, in 1993, Uruguayan Central Bank president Ramon
Diaz pushed the long-whispered allegations against Moon's bank
into the parliamentary record. Diaz accused Banco de Credito of
violating financial rules, operating at a constant loss,
practicing dubious credit policies with insolvent customers and
holding inadequate cash reserves.
     
     Diaz demanded that the bank add $30 million in capital
within 48 hours or face government intervention. Within hours,
panicked customers pulled $10 million in deposits out of the
bank. Diaz's goal of forcing Moon to sell the bank seemed within
reach. One senator claimed that Diaz hoped an Argentine
investment group would step in and take over the bank.
     
     Moon proved, however, that his seemingly bottomless well of
cash could fill the bank's vaults in a crisis. Before the 48-hour
deadline, Moon transferred $30 million into the ailing bank and
retained control. Since then, Moon's influence has continued to
grow in Uruguay, although Banco de Credito continues to suffer
chronic financial troubles.
     
     Despite delivery of mysterious cash from Moon's followers --
such as the alleged $80 million deposits in November 1996 -- the
bank again has slipped into a deficit estimated at $120 million.
The deficit -- or "red numbers" in the Spanish jargon -- has been
blamed largely on credits given to the Rio de la Plata hotel
company ($65 million) and to Creditos S.A., a financial
institution that was the bank's first client.
     
     Moon's investment arm, Rondilcor S.A., also has invested
money in privatization projects that have been slow to turn a
profit. According to a U.S. State Department cable obtained under
the Freedom of Information Act, "the Unification Church has few
adherents in Uruguay [but] the church's hotel ventures are just
part of a significant business presence that the church hopes
will prove profitable over the long term."
     
     The cable, dated Sept. 17, 1994, added that "Rondilcor
officials admit ... that the church is at least several years
away from earning back its investments even under the most
favorable circumstances."
     
     But Moon's money continued to flow into new projects anyway.
Embittered by his church's decline in the United States -- where
membership reportedly has sunk to 3,000 members -- Moon shifted
his personal base of operations to a luxurious estate in Uruguay.
In the last three years, Moon also bought the ex-Frigorifico
Nacional, a cool-storage house; the Astilleros Tsakos dockyard;
and other privatized port services. Moon has promised to build
containers as well as fishing and chemical ships -- and to
construct a paper plant.
     
     Nelson Cesin, a reporter for the newsweekly Brecha, has
noted that the new acquisitions would allow Moon to move money
freely around the world.
     
PLANES & SUBS
     
     Moon himself has announced an ambitious plan for a worldwide
transportation and propaganda system. To his followers, he has
boasted about plans for building a network of small airstrips
throughout South America and other parts of the world, supposedly
for tourism. In one speech on Jan. 2, 1996, he even announced a
scheme for deploying submarines to evade coastal patrols.
     
     "There are so many restrictions due to national boundaries
worldwide," Moon lamented during the speech, which the
Unification Church posted on its Internet site. "If you have a
submarine, you don't have to be bound in that way."
     
     (As bizarre as Moon's submarine project might sound, a cable
from the U.S. Embassy in Japan, dated Feb. 18, 1994, cited press
reports that a Moon-connected Japanese company, Toen Shoji, had
bought 40 Russian submarines. The subs were supposedly bound for
North Korea where they were to be dismantled and melted down as
scrap.)
     
     Moon, however, understands that his primary protection comes
from the political alliances that his money has bought. In the
1996 speech, Moon added that he "has been practicing the
philosophy of fishing here [in Uruguay]. He [Moon] gave the bait
to Uruguay and then the bigger fish of Argentina, Brazil and
Paraguay kept their mouths open, waiting for a bigger bait
silently. The bigger the fish, the bigger the mouth. Therefore,
Father [Moon] is able to hook them more easily."
     
     In recent years, Moon also has continued his clandestine
cash transfers into the United States. According to court records
from a divorce case involving one of Moon's sons, Hyo Jin, $1
million in cash was carried into the United States in early 1994
by Moon's followers and delivered to Hyo Jin who ran a
Moon-controlled recording studio in New York City.
     
     In an interview, one of Hyo Jin Moon's top aides, Maria
Madelene Pretorious, stated that the cash was circulated through
Moon's business empire in the United States as a way to launder
it, before it was dispatched to church projects.
     
     In a separate interview, another senior figure in Moon's
U.S. operations claimed that after Asia slid into an economic
downturn in the 1990s, the bulk of Moon's money began to arrive
from South America. [For more details on Moon's recent activities
and history, see iF Magazine, Sept.-Oct. 1997.]
     
     Clearly, Moon's big-dollar spending on conservative
politicians in the United States and South America has helped
shield the South Korean theocrat from serious scrutiny. In recent
years, Moon's American beneficiaries have included former
President George Bush and Religious Right leader, Jerry Falwell.
     
     But paradoxically, Moon's banking deficits in Uruguay have
given him additional leverage. Uruguayan authorities fear that a
major financial bankruptcy could damage the country's reputation.
So, in exchange for "laissez-faire" treatment for his bank, Moon
pumps in the necessary cash to keep Banco de Credito afloat.
     
     Still, the ultimate source of Moon's influence remains his
subterranean flow of money, a virtual underground river of cash
spewing from a hidden spring whose origin remains the biggest
mystery of Moon's organization. It is that spring which keeps
Moon's Uruguayan "oasis" green and his critics in both North and
South America at bay.
 
     Copyright (c) 1998
 
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