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House of LordsLords Chamber

Meeting started on Thursday 16 February at 11.04am. Ended at 6.39pm

Lord James of Blackheath(Conservative)

My Lords, I hope the minute that that has taken has not come off my time. I do not wish noble Lords toget too encouraged when I start with my conclusions but I will not sit down when I have made them. Iwill then give the evidence to support them and, I hope, present the reasons why I want support for anofficial inquiry into the mischief I shall unfold this afternoon. I have been engaged in pursuit of thisissue 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 massivepiece of money-laundering committed by a major Government who should know better. Effectively, itundermined 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 hasbeen 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 theUnited Kingdom. Seven days later, another $5 trillion came to HSBC and three weeks later another $5trillion. A total of $15 trillion is alleged to have been passed into the hands of HSBC for onward transitto the Royal Bank of Scotland. We need to look to where this came from and the history of this money. Ihave 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 therichest man in the world. He would be if all the money that was owed to him was paid but I have seensome 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 hadbeen effectively the emperors of Indo-China in times gone by. A lot of that money has been taken awayfrom him, with his consent, by the American Treasury over the years for the specific purpose of helpingto 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 FederalReserve nor a bank. It is a bit like "Celebrity Big Brother". It has three names to describe it and none ofthem is true. This astonishing document purports to have been a meeting, which was witnessed by MrAlan Greenspan, who signed for the Federal Reserve Bank of New York of which he was chairman, aswell as chairman of the real Federal Reserve in Washington. It is signed by Mr Timothy Geithner as awitness on behalf of the International Monetary Fund. The IMF sent two witnesses, the other being MrYusuke Horiguchi. These gentlemen have signed as witnesses to the effect that this deal is a proper deal.

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There are a lot of other signatures on the document. I do not have a photocopy; I have an originalversion of the contract.

Under the contract, the American Treasury has apparently got the Federal Reserve Bank of New York tooffer 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. Thatis all in the agreement and it is very remarkable. Establishing whether I have a correct piece of paper isjust two phone calls away-one to Mr Geithner and one to Mr Greenspan, both of whom still prosper andlive. They could easily confirm whether they signed it. Mr Riyadi, by passing these bonds over, has alsoput at the disposal of the US Treasury the entire asset backing which he was alleged to have for the $15trillion. I have a letter from the Bank of Indonesia which says that the whole thing was a pack of lies. Hedid 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.

Finally, I have a letter from Mr Riyadi himself, who tells me that he was put up to do this, that none of itis 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 somerecovery. But it gets more complicated than that because each of the $5 trillion payments that came inhas been acknowledged and receipted by senior executives at HSBC and again receipted by seniorexecutives at the Royal Bank of Scotland. I have a set of receipts for all of this money. Why would anybank want to file $5 trillion-worth-$15 trillion in total-of receipts if the money did not exist? The moneywas first said to have come from the Riyadi account to the Federal Reserve Bank of New York and fromthere it was passed to JP MorganChase in New York for onward transit to London. The means ofsending it was a SWIFT note which, if it was genuine, ought to have been registered with the Bank ofEngland.

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 Sassoonlooked at it and said immediately, "This is rubbish. It is far too much money. It would stick out like asore thumb and you cannot see it in the Royal Bank of Scotland accounts". He went on to say, "The goldbacking it is ridiculous. Only 1,507 tonnes of gold has been mined in the history of the world, so youcannot have 750,000 tonnes". That is true. The third thing he said was, "It is a scam", and I agree withhim. The problem is that at that point we stopped looking, but we should have asked what the scam wasinstead of just nodding it off.

We have never resolved it. Today, I have this quite frightening piece of paper, which is my justificationfor bringing it into this meeting. It is available on the internet and I am astonished that it has not alreadybeen unearthed by the Treasury because every alarm bell in the land should be ringing if it has. It is fromthe general audit office of the Federal Reserve in Washington-the real Federal Reserve-and its auditreview to the end of July 2010 on the Federal Reserve Bank of New York. It has on it some 20 bankslisted to which $16.115 trillion is outstanding in loans. That is the sore thumb that was being looked forby my noble friend Lord Sassoon. But more particularly there are two other interesting things. The firstis that Barclays Bank has $868 billion of loan, and the Royal Bank of Scotland has $541 billion, inwhich case one has to ask a question, because they could have earned back in three weeks their entireindebtedness and could pay off the taxpayers of Britain. Why have they not done so and could we pleaseask them to put a cheque in the post tonight for the whole $46 billion?

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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 betweenthemselves 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 vastamount, $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 itthrough a major central bank like the Bank of England, which apparently refused to touch this, or youput it through an MTN-trading bank, which is then able to use the funds on the overnight EuropeanMTN trading market where they can earn between 1 per cent and 2.5 per cent profit per night. Thecompound interest on that sum is huge. If it is genuine, a vast profit is being made on this moneysomewhere.

I believe that this is now such an important issue that I have put everything that I have got on the subjecton to a 104-megabyte memory thumb. I want the Government to take it all, put it to some suitableinvestigative bureau and find out the truth of what is going on here, because something is very seriouslywrong. 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 needto take it back. I ask for an investigation and for noble Lords to support my plea.

See this speech in context

Hansard source(Citation: HL Deb, 16 February 2012, c1016)

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