Tuesday, March 1, 2005


German banks cozy with ex-commies
Latest revelation involving Putin steps up scrutiny of questionable ties


Posted: March 1, 2005
1:00 a.m. Eastern
By Aleksandar Pavic


 2005 WorldNetDaily.com

Revelations that the chief of Germany's Dresdner Bank's Russian operations has a past as a Putin-linked Communist secret-police agent is the second tip of the iceberg representing German banking's apparent proclivity for forging alliances with former Eastern Bloc interests that have gone underground the first incident involving a privatization scam reported by WorldNetDaily.

According to the Wall Street Journal, Matthias Warnig helped Russian President Vladimir Putin, a former KGB officer, recruit spies in the West during the 1980s, citing documents from the Stasi, as East Germany's secret police was known. After Warnig left the intelligence service in 1989 with the rank of major, he was sent by Dresdner Bank in 1991 to head a new operation in St. Petersburg, where Putin moved to a position in the mayor's office as liaison with foreign businessmen.

WSJ writes that Warnig used these personal ties to help advance his own career and Dresdner's Russian interests, including highly valuable government contracts, such last year's Yuganskneftegaz valuation. In February, Warnig was nominated to the board of the giant Russian state-owned Gazprom energy concern.

In an interview with the German magazine Manager, former Dresdner CEO Bernard Walter, who ran the bank's Eastern Europe operations in the early 1990s, said he would not have hired Warnig if he had known about his Stasi past.

A Kremlin spokesman, while confirming most of the story's details, denied that the two men worked together as spies and that they did not actually meet until both moved to St. Petersburg, deeming their relationship as "strictly business."

Dresdner was one of Germany's largest banks when it was bought by German insurance giant Allianz AG in 2001, making the new company the fourth largest financial group in the world. In the U.S., Allianz wholly owns California-based PIMCO, one of the world's largest fixed-income funds, and Fireman's Fund Insurance, among others.

As WND reported in December, Allianz was under a microscope for its dealings in another formerly Communist country, Croatia, a former republic of ex-Yugoslavia, where, in tandem with the Italian Unicredito Italiano Bank, Allianz acquired a 96 percent stake in Zagrebacka banka, known as ZABA, the largest Croatian bank, which is under intense state and media scrutiny in that country in connection with various financial irregularities.

The story reported that Pask Kacinari, a Zagreb-based Albanian, is suing the Zagreb bank for nearly $100 million for having "confiscated his shares and savings deposit" during the war in Croatia in the 1990s. Kacinari has accused Allianz and Unicredito for allying themselves with "communist warlords" in Croatia, actually former Communist Party members who leveraged their high party posts into key economic and business positions in post-communist Croatia, using shady "privatization" processes to retain or even advance their power even as Communism itself seemingly collapsed. Kacinari, who has since engaged U.S. legal counsel, is additionally challenging the market capitalization value of Allianz/Unicredito shares, claiming it has been compromised by the March 2002 acquisition of "falsified" and/or "confiscated" ZABA shares.

Major Croatian dailies recently have run articles questioning the privatization of the entire Croatian banking sector, including claims that ZABA, a formerly mixed state/shareholder bank, was never actually privatized before being "sold" to Allianz/Unicredito. Unicredito Italiano is one of Italy's three largest banks and trades on the Milan Stock Exchange. Allianz shares are traded on the NYSE and most of the world's major financial markets.

As the investigations in both Russia and Croatia widen, and in the context of the aggressive expansion of the Allianz/Unicredito concern into rapidly growing Eastern European financial markets, the extent of some Western, especially German, banking-sector ties to the Eastern Bloc's former Communist rulers-cum-capitalists could soon become the subject of even greater scrutiny, with geopolitical as well as financial market implications.

Related story:

Balkan privatization scam to affect Western banks?


Aleksandar Pavic covers the Balkans for WorldNetDaily.com.