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OPINION: Citi Bank’s admission of corruption leaves Reserve Bank red-faced

By Pinky Khoabane


By agreeing to pay the approximately R70m admin penalty fine, CitiBank has effectively confessed to being a participant in the corruption involving rigging the rand.

The Competition Commission announced the deal yesterday saying it would “encourage speedy settlement and full disclosure to strengthen the evidence for prosecution of the other banks”.

Its confession will leave a lot of people red faced, not least the South African Reserve Bank (SARB) and those who protected ABSA in the apartheid looting case on the basis that the R3.2bn which it was expected to pay back in 1998 would have crashed the banking system and the economy.

Following the Competition Commission’s announcement that it would be sending 17 banks to its tribunal for price fixing and collusion, the SARB issued a statement which I described as puerile in a column last week. It said among others that it welcomed the investigation and would await the legal process to take its cause. The point the SARB was not acknowledging – and deliberately so – is that the Competition Commission had already investigated these banks and had established fraud. The commission had two whistleblowers in ABSA and Barclays. CitiBank is the third.

But the reserve bank said it had conducted its own review of the forex trading processes in the country and had found no evidence of misconduct on the part of the banks. This is disgraceful given what the Competition Commission has discovered. If there was ever any doubt of the work by the commission the two whistleblowers and now the confession by Citi Group stand as testament of the SARB’s inefficiency and talks more to its corrupt relationship with the banks.

It is indeed ironic that the same group of banks that have now been fingered in the manipulation of the currency were among the 80 or so CEOs who signed a petition against President Jacob Zuma’s choice of finance minister in 2015 – a decision which according to these fraudsters caused South Africa R500bn.

Citigroup & its legacy of corruption
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Last year, Wikileaks revealed a series of emails between Citigroup’s Michael Froman and Barack Obama’s advisors in 2008, which showed that despite its corrupt and derelict manner in handling its own financial matters, the banking group had also advised Obama on who to pick as his staff for first term.

In an email dated Saturday, October 18, 2008, Michael Froman, using his official Citigroup email address of, sent the following email to Obama’s advisors:

“Review Teams

“Attached is the latest version of the Agency Review teams. It is a closely held document, so please treat it with the same sensitivity as ours. If you all could take a quick look at the lists for the agencies in your area, that would be helpful. I think the hope is that, while there are no guarantees, some of the people on these lists might make their way into the agencies ultimately. Our role, therefore, is to check whether there is much overlap between the names here and the names were seeing/generating for sub-cabinet positions in each agency. There doesn’t need to be total overlap, but if there is a total disconnect, it would probably be better to rectify that now vs. later.

“I hate to ask, since I just send you another long spreadsheet to check, but if you could do this tomorrow and get back to Lisa (copied here) and myself, that would be great. Thanks.”

According to the WikiLeaks emails Froman began plotting who would serve in the Obama administration long before the election results came in.

In an email to John Podesta dated September 18, 2008, Froman wrote:

“Mark Gittenstein called to say he was in the process of inserting people into all of the work streams and indicated that Ron Klain would be their representative on the Personnel Working Group. I know and like Ron and am happy to work with him. Do let me know how you’d like to handle information flow, role in decisionmaking, etc. Thanks.”

In another email dated October 15, 2008, Froman further shows he is playing a pivotal role in personnel issues. He writes to Podesta and Obama advisor Pete Rouse:

“Please see attached. Pete, need to chat with you today about a time-sensitive Treasury issue. Please call at your convenience. 917-499-3433. John, got some feedback that Blair could well be interested in DNI. Also, spent some more time with Oszag last night and think he could be enticed to the NEC. Also, spent 2 hours  with Gene yesterday.”

Another email suggests that Podesta allowed Froman to screen  potential new hires. Podesta wrote to Froman on October 13, 2008 to inquire:

“Subject: Gerald Corrigan

“Rahm raised as possible Treasury Deputy. Said he didn’t know him, but his name had been raised by others. You probably do. Worth considering?”

Froman responded: “Yes, though quite a bit out of date.”

There are many other emails that showed the extent of From and other CitiGroup’s role in shaping Obama’s staff.



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