Banco Bilbao Vizcaya Argentaria - Money Laundering, Account Falsification, Bribery

Money Laundering, Account Falsification, Bribery

In 2002, Spain’s second largest bank, Banco Bilbao Vizcaya Argentaria (BBVA) was the target of a criminal investigation into secret offshore accounts. The accounts were allegedly used by the bank to trade in its own shares, bribe politicians in Latin America and top up the pensions of some of its board members. The Bank of Spain initially opened the investigation in March 2002 because it was dissatisfied with explanations concerning previously hidden accounts. The so-called secret accounts of sixteen senior executives employed by BBVA were investigated by the Spanish courts and Judge Baltazar Garzon, Spain’s top investigative magistrate. Garzon asked the Bank of Spain in April to suspend its civil inquiry into the secret accounts because of "possible penal responsibilities" facing current and former BBVA employees. The senior executives under investigation include BBVA’s chief executive, José Ignacio Goirigolzarri Tellaeche, a deputy finance minister and several members of Spain’s business elite who served on BBVA’s board of directors. The executives were charged with alleged money laundering, account falsification, and illegal political contributions. A court order that followed the release of a report from the Bank of Spain claimed BBVA used "accounts held in fiscal paradises, in offshore companies to maintain significant sums of money outside the annual accounts." The accounts are valued at $200 million and were allegedly used for diverse purposes, including the acquisition of minority stakes in Argentaria by Banco Bilbao prior to their eventual merger, and to hide losses from regulators. Garzon alleged the bank had used offshore funds "to make illicit payments of millions to Venezuela to the election campaign of a certain political leader -- the Venezuelan president Hugo Chavez -- through other accounts, secret accounts, accounts held by intermediaries, also in fiscal paradises, without declaring these payments." Chavez was forced out of office for two days in April by the Venezuelan military before being reinstated. The army’s action was spurred by Chavez’s dismissal of a number of workers from a state oil company and a subsequent strike that severely cut the volume of the country’s oil production. The existence of the suspect accounts surfaced after the merger of Banco Bilbao Vizcaya with Argentaria in 1999, to form the BBVA group. The accounts were set up under Banco Bilbao Vizcaya’s auspices. The chairman of the combined BBVA, Francisco Gonzalez, insisted the accounts be reported to the Bank of Spain.