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December 4, 1999 | Press accounts continue to state erroneously that banker Edmond J. Safra, who died mysteriously when a fire swept his Monaco penthouse apartment, was cleared over involvement
in the Iran-contra scandal and related money-laundering investigations.
Contrary to reports in The New York Times and other leading news outlets, Safra's Republic National Bank was implicated � not cleared � in connection with the Iran-contra affair. According to the final
report by Iran-contra special prosecutor Lawrence Walsh, an officer of Republic National Bank in New York arranged clandestine cash transfers to Oliver North's secret network in 1985-86.
Police in Monaco have given no indication about a possible motive for the apparent attack on Safra's apartment and the fire that killed the banker and a nurse. As one of the world's richest men, Safra
would be an obvious target for robbery, kidnapping and other common crimes. But Safra's connection to secret intelligence operations could become another possible area for investigation, as would Safra's
questionable banking activities in Russia.
After escaping any Iran-contra fall-out � thanks largely to the U.S. news media's failure to examine the details of Walsh's investigation � Safra's Republic National Bank went on to become a major
recipient of money from Russia. Millions of rubles poured into the New York-based bank from Boris Yeltsin's government and from the shadowy world of Russian business.
In reports about Safra's mysterious death, major U.S. newspapers continued to ignore the evidence against Safra's bank that emerged from the Iran-contra investigation. Iran-contra financial records
revealed that Republic National Bank handled wire transfers for North's Swiss accounts.
But Walsh also devoted a special section to what he called "the cash drops." That section dealt with surreptitious payments made to Oliver North's operatives � illicit money arranged in New York
City by an officer at Safra's Republic National Bank, a woman named Nan Morabia. As part of an immunity deal with Walsh, Morabia described her activities that she said were directed by financier Willard
Zucker, who oversaw North's Iran-Contra accounts in Geneva, Switzerland.
Morabia testified that she arranged for hundreds of thousands of dollars in "cash drops" to be made to North's operatives, including Albert Hakim and Richard Secord, at Republic National Bank in
New York City and at New York hotel rooms. Sometimes, the recipient was required to show a torn dollar bill that matched a torn dollar bill in the possession of the courier.
"Beginning in early 1985, Zucker would contact Nan Morabia and inform her that Hakim or Secord needed a certain amount of cash," Walsh's report stated. "Nan Morabia would communicate this
to her husband Elliot, who provided and delivered the cash or had their son, David, deliver it. Zucker wired from Enterprise accounts an equal amount to an account named 'Codelis' at the Trade
Development Bank in Geneva. This account was controlled by two brothers, Edgar and Elie Mizrahi, who were family friends of the Marabias."
The purpose of making the dual transactions � the "cash drops" in New York and the parallel deposits in Geneva � was to circumvent U.S. anti-money-laundering statutes, Morabia acknowledged. A
year ago, CIA inspector general Frederick Hitz also confirmed that North's contra-support operation worked closely with major Latin American cocaine cartels and drug money launderers. [For details, see
Robert Parry's Lost History.]
The Trade Development Bank, where Zucker sent the Geneva funds, was founded by Safra in the 1950s. Beginning with only $1 million, the bank grew into the flagship of Safra's international banking empire
with nearly $5 billion in deposits by the early 1980s. Safra sold the bank to American Express in 1983 for $550 million.
After the deal, American Express executives grew suspicious about Safra's rumored links to the Iran-contra operations and drug money laundering. Given their corporate responsibility for the Trade
Development Bank, top American Express executives hired private detectives to examine those suspicions, some of which began surfacing in the international press.
When Safra got wind of the American Express investigation, he ordered counter-investigations of American Express, with Safra's private investigators tailing the private eyes working for American Express.
Safra then sued American Express for alleged defamation. At that point, American Express chose to avert a costly legal battle and limit the negative publicity by agreeing to apologize and donate $8
million to charities of Safra's choice.
The American Express retreat was big news at the Wall Street Journal and other major newspapers that took Safra's side and portrayed him as an innocent man smeared by a business competitor. Writer Bryan
Burrough popularized this view in his 1992 book, Vendetta: American Express and the Smearing of Edmond Safra. The image of Safra as victim became the dominant conventional wisdom among U.S. journalists.
So, by the time Walsh's report appeared in 1993 � confirming that Safra's bank indeed was implicated in both the Iran-contra affair and illicit money laundering � the U.S. news media showed no interest in
correcting the record. The false conventional wisdom held.
Now, with Safra's apparent murder, authorities might be expected to begin a thorough examination of the banker's mysterious history. But the American news media still is recycling the false conclusions
about Safra's Iran-contra "exoneration." None of the major newspapers, it seems, has examined the documentary record available in Walsh's report and at the National Archives.
The New York Times summed up Safra's alleged Iran-contra tie-in this way: "American Express executives � hired detectives to track down rumors that he [Safra] was involved in the Iran-contra scandal
and that his banks were laundering drug money. None of the rumors proved true." [NYT, Dec. 4, 1999]
Ironically, Burrough prefaced his erroneous book, Vendetta, with a quote from Mark Twain: "A lie can travel halfway around the world while the truth is putting on its shoes." As the historical
record now shows, it was Vendetta's version of events � repeated by The New York Times � that turned out to be the lie.
But there's no indication, at least not in the major American news media, that the truth is busy putting on its shoes.
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