Why Won't the Justice Department Answer Questions About the BNP Paribas Settlement?

There are times when decisions by the Obama administration are simply morally incomprehensible. An ongoing example is the refusal by Obama's Department of Justice (DOJ) to release information about the $9 billion settlement with French banking giant BNP Paribas (BNP), information that I and others have sought unsuccessfully for some time. The settlement entered into by BNP and DOJ was the result of the bank's admission that it had criminally laundered money on behalf of sanctioned entities: the governments of Iran, Cuba, and Sudan. The large bulk of this criminal activity benefited the regime of Omar al-Bashir in Khartoum; al-Bashir has been indicted by the International Criminal Court on multiple charges of genocide and crimes against humanity in Darfur. His regime has caused untold suffering and devastation among the people of Darfur, as well as Sudanese people in the Nuba Mountains, Blue Nile State, and refugees in eastern Chad, Ethiopia, and South Sudan (see my oped on this topic in The New York Times, July 15, 2015).

To date, there is no evidence that any of the $3.84 billion of the settlement nominally set aside for restitution to these people has been awarded. Just as troublingly, the DOJ refuses to say whether monies designated for the State of New York ($3.3 billion), the Federal Reserve ($500 million), and the Treasury Department's Office of Foreign Assets Control ($1 billion) have been awarded. This leaves open the appalling possibility that these three American entities pushed to the front of the disbursement line, while Sudanese on the ground in the region -- who continue to suffer and die because of the criminal activities of BNP -- have been pushed to the back. We don't know if this is so; DOJ won't say; but if true, this would be a terrible stain on the American tradition of aiding those in desperate need of humanitarian assistance.

And the fact that DOJ will not answer questions -- again, posed by me and many others -- makes it difficult not to conclude that this moral outrage has indeed been committed. Behind the boilerplate responses the Department does offer, there are hints that this is so. Let's be clear, then, about what is occurring, and indeed may have already occurred.

As Reuters revealed in a superb investigative dispatch of July 2014, New York Governor Andrew Cuomo strong-armed an additional $1 billion from the settlement for his financially compromised state. But whatever the fiscal distress of New York, this muscling in was inevitably at the expense of monies that could have been devoted to restitution for those who had truly suffered "harm." Such victims were defined by the presiding judge in U.S. District Court for Southern New York, Lorna Schofield, as those who were "directly and proximately harmed by BNPP's criminal conduct." New York State was not "harmed" significantly in ways that comes within the ambit of such a definition; that the state should still receive over a third of the total settlement is in itself an outrage -- a pure power play by a politically and fiscally embattled Cuomo.

So, has BNP paid up? That question, too, seems one DOJ is unwilling to answer publicly. But in the wake of the settlement, The Economist noted (July 5, 2014):

BNP Paribas is profitable, well capitalised and liquid: it can pay the fine without turning to the markets for money or letting its prudential ratios slip below acceptable levels, it says. The bank will immediately take a charge of €5.8 billion ($7.9 billion) on top of the $1.1 billion it had already set aside and will freeze dividends at last year's level.

It would certainly seem that the U.S. government has the money in hand -- why won't DOJ confirm this, or explain why the money hasn't been received?

After apportionments in the settlement, there was in fact $3.84 billion left, supposedly for restitution to victims of BNP's activities. Two other countries -- like Sudan, on the State Department's list of state sponsors of terrorism -- benefited from BNP's illegal money laundering. But one, Cuba, was removed from the State Department list in May and it's unlikely that many Cubans were "directly and proximately harmed"; Iran, the third country served by BNP's money laundering services, was the beneficiary of only a relatively small fraction of the total money laundering, and it is not clear how restitution could be effected.

The big money laundering by BNP benefited Sudan -- $6.4 billion, or more than 70 percent of the total. And there can be no doubt about just how much the al-Bashir regime benefited from PNB's financial crimes, which aided not only the regime's efforts at self-enrichment and war-making, but relieved the Sudanese economy from suffering the full effects of U.S. sanctions. As DOJ said in a recent statement, "BNPP's central role in providing Sudanese financial institutions access to the U.S. financial system, despite the Government of Sudan's role in supporting terrorism and committing human rights abuses, was recognized by BNPP employees."

The economy throughout Sudan is now rapidly imploding, and there are acute shortages of basic commodities, indeed the necessities for living. Water shortages have emerged throughout the country because the regime, which came to power by military coup in June 1989, has not invested nearly enough in critical infrastructure. Farming in the key agricultural state of Gezira has been badly hurt, and farmers there have declared this year's crop is threatened by a lack of water.

Because the regime has spent so lavishly on itself and expensive military hardware (and military salaries), there is no hard currency in the Central Bank of Sudan. Lacking Forex, the regime can't purchase the wheat necessary for bread, a staple in the lives of many Sudanese. Bread lines and shortages have been reported for the past two years. Nor is there hard currency with which to purchase cooking fuel or diesel fuel in adequate quantities. Cooking fuel is essential for many of the foods eaten by Sudanese, and diesel shortages have driven up prices and the cost of transportation.

Indeed, most economists estimate that real inflation in Sudan is far greater than the 24 percent figure promulgated by the regime-controlled Central Bureau of Statistics. The Sudanese Pound has lost a tremendous amount of its value, Sudan owes the international community more than $37 billion, and unemployment and underemployment are very high. Unsurprisingly, there have been many demonstrations, some of them fatal. Peaceful protests in September 2013 resulted in more than 200 deaths, as security forces were given "shoot to kill orders" when confronting demonstrators.

Meanwhile, in Darfur and eastern Chad, in the Nuba Mountains of South Kordofan, in Blue Nile State, and in the refugee camps of Ethiopia and South Sudan, the harm done by BNP's unfathomably callous financial assistance to the Khartoum regime has produced tremendous suffering and destruction; "harm," as defined by Judge Schofield, continues to accrue at terrifying rates. Murder, rape, pillaging, indiscriminate aerial bombardment, humanitarian embargoes, large-scale land appropriations by Arab militia forces -- all are part of Sudan's genocidal counter-insurgency campaigns. In the refugee camps, especially those of eastern Chad -- where some 370,000 refugees are compelled to remain by massive ongoing insecurity in Darfur -- services are poor and declining in quality. Food distribution is hampered in all these locations by a lack of funding, and malnutrition--especially among children -- is growing rapidly.

It's time for DOJ to provide all relevant financial information about the BNP settlement, including precise figures for disbursements. There should also be meaningful justification for the present haphazard and inevitably distorted method of providing restitution: Sudanese in the diaspora are the only ones with access, this via a DOJ website page with a July 30, 2015 deadline. While many have suffered considerably in being forced to flee their native land, those who have been forced to remain and endure the brutality of the Khartoum regime need urgent humanitarian assistance. Much of this could be provided by the BNP settlement monies.