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Questionable Business: Quietly, US Firms Penalized
Published on Thursday, March 7, 2002 in the Boston Globe
Questionable Business
Quietly, US Firms Penalized
by Glenn Kessler
WASHINGTON - The Treasury Department office responsible for leading the financial war against terrorism secretly settled more than 100 enforcement actions from 1998 to 2000 against corporations, banks, and other entities for violating trade embargoes with rogue nations.

The Office of Foreign Assets Control obtained hundreds of thousands of dollars in fines from companies such as Bank of America and Blue Cross and Blue Shield of the National Capital Area, but it did not begin to disclose the cases until last week, in response to a lawsuit.

The office helps enforce economic and trade sanctions against terrorist organizations, drug traffickers, and foreign countries such as Cuba, North Korea, and Sudan. Since Sept. 11, it has been coordinating efforts to track down and freeze terrorist funding.

The secretive nature of its enforcement actions, however, stands in contrast to similar units at other agencies. The Commerce and State departments, for instance, regularly publicize fines and penalties levied against companies for their failure to abide by export rules. Some companies whose fines were revealed were surprised to discover that their penalties had not been previously disclosed.

''I thought these things were public all along,'' said Donald Murphy, a partner at Brown Brothers Harriman, an investment firm that paid $20,000 after a clerk allowed a bank draft to be shipped to a Cuban bank. ''It's unusual that you have an enforcement action with a government agency and not have it made public.''

Edward Rubinoff, a Washington lawyer who directs the economics sanctions practice at Akin, Gump, Strauss, Hauer & Feld, said this is typical of the Office of Foreign Assets Control. ''They don't publish rulings, they don't put out decisions on enforcement,'' he said. ''Their entire operation is clouded with secrecy.''

Interestingly, in the Treasury Department's most recent performance report, it said ''the success of the Office of Foreign Assets Control program depends largely on awareness and education of the public and the industry.''

Rubinoff said he has asked staff members at the office why they don't publicize enforcement decisions, and he said ''they think every matter stands on its own.'' The office relies on ''very broad and sometimes very vague regulations subject to a lot of interpretation,'' he said. ''They like the idea that companies aren't quite sure of the parameters of the regulations.''

''We view these settlements as resolutions of just allegations,'' Treasury Department spokeswoman Tasia Scolinos said. ''There is no full agency finding of fact. To publicize the resolutions under those circumstances would be inappropriate.''

The office began to disclose details of its enforcement efforts after Russell Mokhiber, editor of the Corporate Crime Reporter newsletter, and Public Citizen filed suit to obtain the records. Last week, the agency sent Mokhiber a letter saying it had identified 100 to 150 cases settled by companies and other entities between May 17, 1998, and May 17, 2000; Mokhiber did not request cases against individuals.

The Treasury Department disclosed a few specific cases, with some details blacked out, and said others would be released on a ''rolling basis.''

© Copyright 2002 Globe Newspaper Company


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