The Swiss banking giant, UBS, may have helped Iran develop its nuclear program, may have held an account for Al Qaeda terrorist Osama bin Laden, and could find itself investigated as part of Congress's ongoing inquiry into the United Nations oil-for-food scandal, lawmakers said yesterday. During an intense grilling on Capitol Hill, the bank was also accused of engaging in a pattern of resistance to congressional inquiries, as lawmakers cited years of non-cooperation with congressional probes into improper transactions between the bank and terrorist regimes. One lawmaker disclosed that UBS had provided a witness for yesterday's hearing only under threats of subpoena, and another accused the bank's representative at the hearing of using "weasel words" to dodge tough questions.Yesterday's hearing of the House International Relations Committee's Subcommittee on Oversight, chaired by Rep. Dana Rohrabacher, Republican of California, was a long-awaited public examination of UBS's alleged money laundering for state sponsors of terrorism, including Cuba and Iran. It is the latest in a series of inquiries spawned in 2003 when American soldiers liberating Iraq discovered $762 million in American currency stashed in hideouts belonging to Saddam Hussein. The serial numbers on the banknotes were traced to UBS, which distributed the currency as part of the Extended Custodial Inventory Program run by the Federal Reserve Bank of New York.
The Federal Reserve program, in cooperation with international banks, allowed clients to exchange old American banknotes for new ones. One condition of the program was that the international banks were not allowed to accept cash from countries against which America maintains sanctions. They also were not allowed to transfer cash to such countries. When American investigators probed the $762 million that emerged in Iraq, they found that UBS had also provided $3.9 billion in American currency for Fidel Castro's Cuba, $1 billion for Iran, and $30 million for Libya. Cuba, Iran, and Libya appear on the State Department's official list of state sponsors of terrorism. As a result of an investigation by the Federal Reserve Bank of New York in cooperation with the Department of the Treasury, UBS was censured by the Swiss Banking Commission, and paid a $100 million fine to the Federal Reserve in spring 2004.