Liechtenstein to open mission in U.S. due to corruption probe
The Associated Press © 2000

VADUZ, LIECHTENSTEIN - AP World News. The investigation into the money-laundering scandal that has rocked this small Alpine principality has created the need for a diplomatic mission in the United States, officials said Wednesday.

The government told parliament it would set up the mission in Washington, but would operate it without a resident ambassador.

The 32,000 people of Liechtenstein have until now relied on Switzerland to facilitate most of their diplomatic contacts with the United States, but there is now an ``increased need for direct contact,'' a government statement said.

This concerns ``especially the current discussion in connection with the Liechtenstein financial center and the mutual requirement for the exchange of information,'' the statement said, without elaborating.

A special investigation in Liechtenstein, which reportedly concerns money laundering for the Russian mafia and Latin American drug cartels, also involves a decade-old investment fraud case from the United States, officials have said.

Police augmented by officers borrowed from neighboring Austria arrested an eighth person _ a financial manager _ Tuesday evening and conducted searches of five buildings for more evidence in the investigation.

The arrest of the person, whose identity was undisclosed, follows that of seven others _ including prominent figures _ over the past two weeks.

One of those in the national prison is a member of the 25-seat parliament and a brother of the country's highest-ranking judge. Another is a brother of the deputy chief of government.

Liechtenstein's monarch, Prince Hans-Adam II, said Wednesday that the future of the country's banking system depends on a thorough judicial reform.

``Unfortunately mistakes were made in the past, and we have a credibility problem abroad,'' said a statement released by the prince. ``We now must concentrate all our forces to clear up all cases, some of which have been pending for years in our courts, and carry out the necessary reforms.''

The government said Tuesday it sent parliament for final approval a package of measures aimed at tightening the principality's rules on money laundering.