Capital Briefs: Hearings on Bank of N.Y. Laundering Probe

money laundering through Bank of New York, House Banking Chairman Jim Leach vowed on Wednesday to hold public hearings in September.

The banking company's role in an alleged money laundering scheme came to light Aug. 19, when The New York Times reported that billions of dollars had passed through a Bank of New York account owned by a company with ties to a reputed Russian mobster. The company has been cooperating with the government and says it is not a target of the investigation.

"The question is whether they were unwittingly duped or were willing facilitators in what may be the greatest example of kleptocratic governance in modern history," Rep. Leach said in a statement, referring to the Russian government.

U.S. law enforcement authorities are also said to be investigating allegations that the Russian government used U.S. banks to divert International Monetary Fund loans. Both reports fed the Iowa Republican's long-standing antipathy toward Russia's political and economic leaders, whom he considers corrupt and lawless.

"Russia has shed communism, but that has not made it a democracy," Rep. Leach said. "Its people have no hope of economic progress unless, and until, the societal plundering is halted and its new class of thieving oligarchs is brought to justice." -- Scott Barancik