LippoBank

LippoBank was a California state-chartered commercial bank affiliated with the Lippo Group of Mochtar Riady and James Riady of Indonesia. It was chartered in San Francisco in 1961 as the Bank of Trade of San Francisco and took the name Lippo Bank in Los Angeles in January 1990. In January 2001 James Riady agreed to plead guilty on its behalf to 86 misdemeanor counts charging that its agents, Riady and John Huang, had made illegal foreign campaign contributions from 1988 through 1994.¹²

Charter History

The records of the Federal Deposit Insurance Corporation for the bank (certificate 18453), a state-chartered bank that was not a member of the Federal Reserve System, show the following changes:¹

• November 15, 1961: opened as the Bank of Trade of San Francisco, San Francisco.
• November 13, 1984: legal name changed to Bank of Trade, still in San Francisco.
• October 31, 1989: main office moved to Los Angeles.
• January 18, 1990: legal name changed to Lippo Bank, Los Angeles.
• March 26, 1998: main office moved back to San Francisco.
• May 31, 2000: merged, without assistance, into the First Bank of California, which survived.

The House Government Reform and Oversight Committee reported that when the Riadys left Worthen Bank in Little Rock about 1987 they "focused their attention on a bank they previously had purchased in San Francisco, California. Soon thereafter they established the Bank of Trade in Los Angeles, which later became LippoBank." Huang's résumé was among the documents LippoBank produced to the committee. The committee found that the Lippo Group's American operations were generally unprofitable, and that while many in the group's hierarchy wanted unprofitable operations closed, others argued that "LippoBank California was important 'strategically,' in order to have a presence in the United States," and prevailed.³

Plea

On January 11, 2001, the Department of Justice's Campaign Financing Task Force and the United States Attorney in Los Angeles announced that James Riady would plead guilty to a felony charge of conspiring to defraud the United States and would enter a plea on behalf of LippoBank to 86 misdemeanor counts, paying 8,610,000 dollars in fines levied against himself and the bank. According to the information, contributions made by Huang and LippoBank employees from 1988 through 1991 were reimbursed from May 1990 to July 1991 with money wired from a foreign Lippo entity to Huang's account in Hong Kong; from August to October 1992, "shortly after Riady pledged $1 million in support of Arkansas Governor Bill Clinton's campaign for the Presidency," contributions by Huang were reimbursed with money wired from a foreign Lippo entity into an account Riady kept at LippoBank and passed to Huang in cash; and from January 1993 to February 1994 contributions by Huang and Lippo and LippoBank employees were reimbursed through a fictitious bonus paid to Huang by a foreign Lippo entity.²

The benefits the contributions were meant to secure for the group and "defendant LippoBank" included "Most Favored Nation status for China, open trade policies with Indonesia, normalization of relations with Vietnam, Community Reinvestment Act exemptions for LippoBank, a repeal of the Glass-Steagall Act which limited business opportunities for LippoBank, and a relaxation of Taiwanese restrictions on investment by foreign banks," as well as "the deposit of funds into LippoBank by political campaign committees and government agencies." The Justice Department stated that the conduct had occurred before LippoBank's acquisition by First Banks America on or about March 1, 2000, and that First Banks America had no involvement in it.²