Call To Block Citicorp, Travelers Merger

A key U.S. House lawmaker on Thursday urged President Clinton and others to block Citicorp and Travelers Group Incs planned merger until the Justice Department completes its investigation into alleged money laundering through Citibank accounts. No merger with Citicorp should go forward until all these charges and allegations are thoroughly and completely investigated, Rep. Maxine Waters told reporters. Since 1996, the Justice Department and other federal agencies have been investigating allegations Raul Salinas, who had a private banking account at Citibank and is the brother of former Mexican President Carlos Salinas, moved tens of millions of dollars from Mexico to Swiss banks through offshore accounts. (Reuters)

Citibank, a unit of Citicorp, has said that an internal inquiry turned up no evidence of illegal activity by the bank. Officials there could not immediately be reached for comment on the lawmakers latest stance.

In separate letters Thursday to President Clinton, U.S. Attorney General Janet Reno and Federal Reserve Board Chairman Alan Greenspan, Waters asked that the planned merger not be approved until the investigation is complete.

The lawmaker is also asking that the House Banking Committee hold hearings on the matter.

If any of these devastating allegations lead to criminal conviction, Citicorp never should be allowed to merge or acquire again, the lawmaker said.

Waters also said she opposes to the planned merger, which was announced earlier this week, because low-income consumers would likely be poorly served by the huge conglomerate.

I have many concerns about the effect of massive financial mergers on the well-being of our nations consumers, especially providing banking services, credit and investments in low-income communities. I dont believe this merger will meet these critical needs, the lawmaker, who chairs the Congressional Black Caucus, told reporters.