Lord James of Black­heath spoke dur­ing a meet­ing of the UK House of Lords on Feb­ru­ary 16 and pro­duced ev­i­dence of $15 tril­lion in what he claims are fraud­u­lent trans­ac­tions from the Fed­eral Re­serve Bank of New York, to Hong Kong Shang­hai Bank­ing Cor­po­ra­tion (HSBC), which then trans­ferred the funds to the Bank of Scot­land. The Bank of Scot­land then al­legedly dis­trib­uted the money among 20 banks through­out Eu­rope al­low­ing them to en­gage in a high-profit scheme which ac­cu­mu­lated tril­lions more dol­lars over the course of eight years; and all off the books. Black­heath states that Alan Greenspan was an eye­wit­ness to the ini­tial trans­fers, and that Tim­o­thy Geit­ner signed off on claims that that the funds were backed by 750,000 tons of gold, de­spite the fact that this is more than four times the es­ti­mated total of gold ever mined from the Earth (ap­prox­i­mately 150,000 – 160,000  tons, ac­cord­ing to the most lib­eral es­ti­mates). Lord James has a rep­utable his­tory with re­gards to the in­ves­ti­ga­tion of money laun­der­ing by ter­ror­ist or­ga­ni­za­tions, and is known for hav­ing ex­posed the Iraqi “su­per­gun” pro­gram. He lists three pos­si­ble sce­nar­ios as to how the events tran­spired:

Lord James of Black­heath: There are three pos­si­ble con­clu­sions which may come from it. First, there may have been a mas­sive piece of money-laun­der­ing com­mit­ted by a major Gov­ern­ment who should know bet­ter. Ef­fec­tively, it un­der­mined the in­tegrity of a British bank, the Royal Bank of Scot­land, in doing so. The sec­ond pos­si­bil­ity is that a major Amer­i­can de­part­ment has an agency which has gone rogue on it be­cause it has been wound up and has cre­ated a struc­ture out of which it is seek­ing to get at least €50 bil­lion as a pay-off. The third pos­si­bil­ity is that this is an ex­tra­or­di­nar­ily elab­o­rate fraud, which has not been car­ried out, but which has been pre­pared to pro­vide a threat to one Gov­ern­ment or more if they do not make a pay-off. These three pos­si­bil­i­ties need an ur­gent re­view.

See Lord James’ full ad­dress to the House of Lords on Feb­ru­ary 16, 2012:

For the reader’s con­ve­nience, a full tran­script (as pub­lished byHansard and linked above) is printed below:

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5.20 pm

Lord James of Black­heath: My Lords, I hope the minute that that has taken has not come off my time. I do not wish noble Lords to get too en­cour­aged when I start with my con­clu­sions but I will not sit down when I have made them. I will then give the ev­i­dence to sup­port them and, I hope, pre­sent the rea­sons why I want sup­port for an of­fi­cial in­quiry into the mis­chief I shall un­fold this af­ter­noon. I have been en­gaged in pur­suit of this issue for nearly two years and I am no fur­ther for­ward in get­ting to the truth.

There are three pos­si­ble con­clu­sions which may come from it. First, there may have been a mas­sive piece of money-laun­der­ing com­mit­ted by a major Gov­ern­ment who should know bet­ter. Ef­fec­tively, it un­der­mined the in­tegrity of a British bank, the Royal Bank of Scot­land, in doing so. The sec­ond pos­si­bil­ity is that a major Amer­i­can de­part­ment has an agency which has gone rogue on it be­cause it has been wound up and has cre­ated a struc­ture out of which it is seek­ing to get at least €50 bil­lion as a pay-off. The third pos­si­bil­ity is that this is an ex­tra­or­di­nar­ily elab­o­rate fraud, which has not been car­ried out, but which has been pre­pared to pro­vide a threat to one Gov­ern­ment or more if they do not make a pay-off. These three pos­si­bil­i­ties need an ur­gent re­view.

In April and May 2009, the sit­u­a­tion started with the al­leged trans­fer of $5 tril­lion to HSBC in the United King­dom. Seven days later, an­other $5 tril­lion came to HSBC and three weeks later an­other $5 tril­lion. A total of $15 tril­lion is al­leged to have been passed into the hands of HSBC for on­ward tran­sit to the Royal Bank of Scot­land. We need to look to where this came from and the his­tory of this money. I have been try­ing to sort out the se­quence by which this money has been cre­ated and where it has come from for a long time.

It starts off ap­par­ently as the prop­erty of Yohannes Riyadi, who has some claims to be con­sid­ered the rich­est man in the world. He would be if all the money that was owed to him was paid but I have seen some ac­counts of his show­ing that he owns $36 tril­lion in a bank. It is a ridicu­lous sum of money. How­ever, $36 tril­lion would be con­sis­tent with the dy­nasty from which he comes and the fact that it had been ef­fec­tively the em­per­ors of Indo-China in times gone by. A lot of that money has been taken away from him, with his con­sent, by the Amer­i­can Trea­sury over the years for the spe­cific pur­pose of help­ing to sup­port the dol­lar.

Mr Riyadi has sent me a re­mark­able doc­u­ment dated Feb­ru­ary 2006 in which the Amer­i­can Gov­ern­ment have called him to a meet­ing with the Fed­eral Re­serve Bank of New York, which is nei­ther the Fed­eral Re­serve nor a bank. It is a bit like “Celebrity Big Brother”. It has three names to de­scribe it and none of them is true. This as­ton­ish­ing doc­u­ment pur­ports to have been a meet­ing, which was wit­nessed by Mr Alan Greenspan, who signed for the Fed­eral Re­serve Bank of New York of which he was chair­man, as well as chair­man of the real Fed­eral Re­serve in Wash­ing­ton. It is signed by Mr Tim­o­thy Gei­th­ner as a wit­ness on be­half of the In­ter­na­tional Mon­e­tary Fund. The IMF sent two wit­nesses, the other being Mr Yusuke Horiguchi. These gen­tle­men have signed as wit­nesses to the ef­fect

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that this deal is a proper deal. There are a lot of other sig­na­tures on the doc­u­ment. I do not have a pho­to­copy; I have an orig­i­nal ver­sion of the con­tract.

Under the con­tract, the Amer­i­can Trea­sury has ap­par­ently got the Fed­eral Re­serve Bank of New York to offer to buy out the bonds is­sued to Mr Riyadi to re­place the cash which has been taken from him over the pre­vi­ous 10 years. It is giv­ing him $500 mil­lion as a cash pay­ment to buy out worth­less bonds. That is all in the agree­ment and it is very re­mark­able. Es­tab­lish­ing whether I have a cor­rect piece of paper is just two phone calls away-one to Mr Gei­th­ner and one to Mr Greenspan, both of whom still pros­per and live. They could eas­ily con­firm whether they signed it. Mr Riyadi, by pass­ing these bonds over, has also put at the dis­posal of the US Trea­sury the en­tire asset back­ing which he was al­leged to have for the $15 tril­lion. I have a let­ter from the Bank of In­done­sia which says that the whole thing was a pack of lies. He did not have the 750,000 tonnes of gold which was sup­posed to be back­ing it; he had only 700 tonnes. This is a piece of com­plete fab­ri­ca­tion.

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Fi­nally, I have a let­ter from Mr Riyadi him­self, who tells me that he was put up to do this, that none of it is true, and that he has been robbed of all his money. I am quite pre­pared to recog­nise that one of the pos­si­bil­i­ties is that Mr Riyadi is him­self putting this to­gether as a forgery in order to try to win some re­cov­ery. But it gets more com­pli­cated than that be­cause each of the $5 tril­lion pay­ments that came in has been ac­knowl­edged and re­ceipted by se­nior ex­ec­u­tives at HSBC and again re­ceipted by se­nior ex­ec­u­tives at the Royal Bank of Scot­land. I have a set of re­ceipts for all of this money. Why would any bank want to file $5 tril­lion-worth-$15 tril­lion in to­tal-of re­ceipts if the money did not exist? The money was first said to have come from the Riyadi ac­count to the Fed­eral Re­serve Bank of New York and from there it was passed to JP Mor­gan­Chase in New York for on­ward tran­sit to Lon­don. The means of send­ing it was a SWIFT note which, if it was gen­uine, ought to have been reg­is­tered with the Bank of Eng­land.

When this came about, I took it to my noble friend Lord Strath­clyde and asked what we should do with it. He said, “Give it to Lord Sas­soon. He is the Trea­sury”. So I did, and my noble friend Lord Sas­soon looked at it and said im­me­di­ately, “This is rub­bish. It is far too much money. It would stick out like a sore thumb and you can­not see it in the Royal Bank of Scot­land ac­counts”. He went on to say, “The gold back­ing it is ridicu­lous. Only 1,507 tonnes of gold has been mined in the his­tory of the world, so you can­not have 750,000 tonnes”. That is true. The third thing he said was, “It is a scam”, and I agree with him. The prob­lem is that at that point we stopped look­ing, but we should have asked what the scam was in­stead of just nod­ding it off.

We have never re­solved it. Today, I have this quite fright­en­ing piece of paper, which is my jus­ti­fi­ca­tion for bring­ing it into this meet­ing. It is avail­able on the in­ter­net and I am as­ton­ished that it has not al­ready been un­earthed by the Trea­sury be­cause every alarm bell in the land should be ring­ing if it has. It is from the gen­eral audit of­fice of the Fed­eral Re­serve in Wash­ing­ton-the real Fed­eral Re­serve-and its audit

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re­view to the end of July 2010 on the Fed­eral Re­serve Bank of New York. It has on it some 20 banks listed to which $16.115 tril­lion is out­stand­ing in loans. That is the sore thumb that was being looked for by my noble friend Lord Sas­soon. But more par­tic­u­larly there are two other in­ter­est­ing things. The first is that Bar­clays Bank has $868 bil­lion of loan, and the Royal Bank of Scot­land has $541 bil­lion, in which case one has to ask a ques­tion, be­cause they could have earned back in three weeks their en­tire in­debt­ed­ness and could pay off the tax­pay­ers of Britain. Why have they not done so and could we please ask them to put a cheque in the post tonight for the whole $46 bil­lion?

The next thing that is wrong with it is that every bank on this list, with­out ex­cep­tion, is an MTN-reg­is­tered bank, which means that they are reg­is­tered to use medium-term notes to move funds be­tween them­selves with an agreed profit-share for­mula, in which case these banks are in­vest­ing this money and, most ex­tra­or­di­nar­ily, not a penny of in­ter­est does the Fed­eral Bank of New York want paid on that vast amount, $16 tril­lion. Any­one who knows what the IMF rules are will im­me­di­ately smell a rat. The IMF has very strict rules for val­i­dat­ing dodgy money. There are two ways of doing it. You ei­ther pass it through a major cen­tral bank like the Bank of Eng­land, which ap­par­ently re­fused to touch this, or you put it through an MTN-trad­ing bank, which is then able to use the funds on the overnight Eu­ro­pean MTN trad­ing mar­ket where they can earn be­tween 1 per cent and 2.5 per cent profit per night. The com­pound in­ter­est on that sum is huge. If it is gen­uine, a vast profit is being made on this money some­where.

I be­lieve that this is now such an im­por­tant issue that I have put every­thing that I have got on the sub­ject on to a 104-megabyte mem­ory thumb. I want the Gov­ern­ment to take it all, put it to some suit­able in­ves­tiga­tive bu­reau and find out the truth of what is going on here, be­cause some­thing is very se­ri­ously wrong. Ei­ther we have a huge amount of tax un­col­lected on prof­its made or we have a vast amount of money fes­ter­ing away in the Eu­ro­pean bank­ing sys­tem which is not real money, in which case we need to take it back. I ask for an in­ves­ti­ga­tion and for noble Lords to sup­port my plea.

5.30 pm

Lord Lea of Cron­dall: My Lords, I am quite happy to be­lieve every­thing that the noble Lord, Lord James of Black­heath, has said. I will be very dis­ap­pointed if the noble Lord, Lord Pear­son of Ran­noch, is un­able to ex­plain how this is all a con­spir­acy by Brus­sels. Will the Min­is­ter con­firm that if you want to buy up the whole world you need a quadrillion? That is the lat­est fig­ure.

This de­bate began with a pre­sump­tion that what hap­pened on 9 De­cem­ber was some­thing of a mys­tery. It re­mains a mys­tery. In an­swer to the ques­tion posed by the noble Lord, Lord Kerr, as to why we walked away on that fate­ful night, I can only as­sume, be­cause no other ex­pla­na­tion has been of­fered, that in the mid­dle of the night David Cameron’s phone was being hacked into by Ru­pert Mur­doch. The events of that night pro­vided quite use­ful bull­dog head­lines for the

16 Feb 2012 : Col­umn 1019

fol­low­ing day’s news­pa­pers, in­clud­ing the Daily Tele­graph and the Daily Mail. The bull­dog in ques­tion, cited by the chair­man of the 1922 Com­mit­tee, was, of course, Win­ston Churchill. It is worth quot­ing against that back­ground of bull­dogs from vol­ume 3 of Churchill’s A His­tory of the Eng­lish-Speak­ing Peo­ples, which he wrote in the late 1930s al­though it was pub­lished only in 1956. He said:

“But the To­ries were now in one of their moods of vi­o­lent re­ac­tion from con­ti­nen­tal in­ter­ven­tion”.

That is where we are at the mo­ment.

What will come of any in­ves­ti­ga­tion, if one is per­formed, re­mains to be seen.

Here’s the original link.