Just a few days before U.S. authorities reached a landmark $8.97 billion settlement in connection with BNP Paribas SA (EPA:BNP) (OTCMKTS:BNPQY)’s allegedly evading U.S. sanctions on Somalia and Iran, New York Governor Andrew Cuomo intervened to ensure that the state government got a much bigger share in the kitty.
Citing people familiar with the matter, Reuters reports that the New York Governor called the Manhattan District attorney, Cyrus Vance, and sought a big chunk for the state’s coffers.
BNP agreed to pay over $8 billion
As reported in June, France’s largest bank pleaded guilty to two criminal charges and agreed to pay a fine of $8.82 billion to settle charges of sanctions violations. BNP Paribas SA (EPA:BNP) (OTCMKTS:BNPQY) was accused of engaging in a “long-term, multi-jurisdictional conspiracy” to violate the sanctions laws of the U.S. The bank was accused of facilitating transactions for clients in Iran, Cuba and Sudan. U.S. officials said the bank concealed transactions for clients in those three countries.
Citing people familiar with the developments, Reuters reports that Cuomo called Cyrus Vance on June 27 and sought a major chunk of the $2.2 billion that was going to be available to Vance to tap for law enforcement projects. The Manhattan District attorney eventually agreed that $1.05 billion of the $2.2 billion would go into the state’s coffers, as otherwise the whole deal could be jeopardized. He had intended to deposit the $2.2 billion his office was set to receive into a federal asset forfeiture fund. The district attorney’s share of some previous settlements was posted in a similar fund.
Tussle over proceeds
As reported earlier, BNP Paribas SA (EPA:BNP) (OTCMKTS:BNPQY) has been facing a probe conducted by several authorities, including the U.S. Justice Department, the U.S. Attorney’s office in Manhattan, the U.S. Treasury Department, the Manhattan District Attorney’s office and the New York State Department of Financial Services (NYSDFS).
According to the Reuters report, the tussle over the proceeds was intense, as the deal required agreement among at least the five powerful law enforcement and regulatory authorities. New York State financial regulator Benjamin Lawsky would reportedly not sign off on his portion of the settlement unless a side agreement involving the extra money for the state was reached. In 2011, Lawsky was nominated to head NYSDFS. His signature was considered crucial to the larger agreement as he had the ability to pull BNP Paribas SA (EPA:BNP) (OTCMKTS:BNPQY)’s all-important license to operate in New York as the bank was set to plead guilty to criminal charges over the violations in both state and federal court.
