Gold falls to 10-week low


Noon EST Sunday, December 5, 1999

Dear Friend of GATA and Gold:

While I have no idea what it means, the horrible
murder of the founder of Republic National Bank,
Edmon J. Safra, in Monaco is of interest to the gold
market because of his background in gold and his
bank's connection to the recently indicted gold bear,
Martin Armstrong. So I'll send along an Associated
Press story from Friday.

Gold Anti-Trust Action Committee Inc.

* * *

Safra Death Sparks Questions

By Noelle Knox
AP Business Writer
Friday, December 3, 1999

NEW YORK (AP) -- The tragic and mysterious death of
international banker Edmond J. Safra inspired
reflections on a banking dynasty that dates back to the
Ottoman empire, but had lately been tainted by scandal.

Safra, the founder of Republic National Bank of New
York and one of the richest men in the world,
suffocated in his apartment in Monaco during a fire set
by hooded men armed with knives. He was 67.

As police searched for the attackers and motives,
bankers and investors around the world recalled Safra
as an intelligent and thoughtful man who expanded his
family's banking empire in Europe, Latin America and
the United States.

"He was a brilliant banker, and very generous friend,"
said Theodore W. Kheel, who was the first chairman of
Republic National Bank, founded by Safra in 1966.

"Today people in the banking industry have little
computers to calculate interest or amortization; Edmund
never needed a computer. He was faster than the
computer," Kheel said.

Safra's death comes just three days after shareholders
of Republic voted to approve the bank's sale to London-
based HSBC Holdings for $10 billion.

The sale, announced last May, was delayed for months
after one of Republic's customers was charged with
defrauding Japanese investors out of $1 billion. The
deal is now awaiting the go-ahead from regulators.

Sir John Bond, group chairman HSBC, said his bank
"will uphold the banking tradition and integrity which
were the hallmarks of Edmond's life."

The Safra family started as bankers and gold traders,
financing camel caravans moving goods between Aleppo,
Constantinople and Alexandria. The name Safra means
"yellow" in Arabic.

Safra, a devout Jew, was born in Beirut in 1932, and by
the age of 16 he was working at the side of his father
Jacob. In the late 1940s, when anti-Semitic riots swept
the city, the younger Safra moved the family business
to Brazil, which was a major refuge for Aleppo Jews
fleeing Syria.

The Safras founded Banco Safra, Brazil's fifth largest
private bank, catering to the wealthy.

He later sold his interests in Brazil to his brothers
and moved to Switzerland, where he started the Trade
Development Bank, another private bank.

In New York, he launched Republic National Bank in the
former Knox Hats Co. building on Fifth Avenue. Today,
Republic New York Corp (NYSE:RNB) has $67.8 billion in
assets and is the 16th-largest bank holding company in
the United States with branches in New York, New
Jersey, Connecticut, California, Delaware, and

Safra was a stocky man with sad, dark eyes. He spoke
and moved slowly and deliberately, often quoting credos
passed down by his father like, "If you loan a man too
much money, you turn a good man into a bad man."

He amassed a fortune of more than $2.5 billion and
ranked 199th on Forbes' list of billionaires. He
shunned publicity, but sometimes couldn't avoid it.

In 1983, he sold the Trade Development Bank to American
Express, but their relationship quickly soured. When
Safra started a competing company in 1988, American
Express launched a smear campaign, linking Safra to
drug trafficking and the Iran-Contra scandal, according
to Bryan Burrough's book "Vendetta."

American Express apologized in 1989 and agreed to pay
$8 million to charities of Safra's choice.

This year Republic was touched by scandal when customer
Martin Armstrong, a prominent financial advisor, was
charged with defrauding Japanese investors out of $1
billion. Republic fired two employees after Armstrong
was indicted. One of the Japanese investors is suing

HSBC raised concerns about Republic's liability in the
case, stalling the Republic purchase. Safra, Republic's
largest shareholder, stepped in last month to save the
deal by cutting his take by $450 million.

"I am taking this action because I believe that a swift
completion of the transaction will be to the benefit of
Republic's clients, shareholders and employees to whom
my life's work has been devoted," he said.

At the same time, reports surfaced of a massive Russian
money laundering operation involving U.S. banks.
Republic Bank had closed a suspicious account of a
company called Benex Worldwide in August 1998 and
alerted regulators. Benex also had accounts at Bank of
New York, which is now cooperating with investigators
who suspect the money laundering ring has ties to
organized crime.

Safra, who is the honorary chairman of Republic, was no
longer involved with the day to day operations of the
bank, and was suffering from Parkinson's disease.

Though he never received a formal education, Safra gave
generously to education. He helped underwrite a high
school in Paris, founded educational programs at
Harvard and Yeshiva universities and the Wharton
business school of the University of Pennsylvania.

He is survived by three sisters, two brothers, his wife
Lily, and her two children. With Safra's death, his
banking interests will be transferred to his brothers
Moise and Joseph.


Editor's Note: Investigative Researcher Randy Herschaft
in New York and Business Writer Marcy Gordon in
Washington, D.C., contributed to this story.