Ex-Defense Chief Denies Lying Over Bank Sale : Finance: Clark Clifford tells ’60 Minutes’ he had no idea a foreign firm had an illegal stake in the institution. He helped get the deal approved.
Former Defense Secretary Clark M. Clifford has denied that he lied to state and federal regulators 10 years ago about the ownership of his Washington bank, saying he learned only recently that a rogue foreign firm secretly and illegally held a controlling stake.
“We were had,” said Clifford, considered one of Washington’s savviest lawyers, in explaining how his First American Bank came to be owned by a foreign institution convicted last year of laundering drug cartel money.
“I would not have touched this with a 100-foot pole if I knew that there was any fraud or misrepresentation connected with it,” he said.
Clifford, an adviser to Democratic presidents going back to Harry S. Truman, made his first extensive remarks on the scandal in a taped interview to be telecast tonight on the CBS program “60 Minutes.” A transcript was released Saturday.
Federal and New York City investigators are trying to determine whether Clifford and his partner, Robert Altman, were telling the truth when they assured bank regulators in 1981 that four Arab investors were acting only for themselves in acquiring a controlling stake in First American.
Clifford and Altman represented the four Arabs in securing regulatory approval of the acquisition. After the deal was completed, the new owners named Clifford as chairman and Altman as president of First American.
Two months ago, investigators discovered secret files showing that the bank’s actual owner, through hidden transactions, was the Bank of Credit and Commerce International, based in Luxembourg. BCCI pleaded guilty in January, 1990, to U.S. money laundering charges and later paid a $15-million fine. It also has handled accounts for ousted Panamanian strongman Manual A. Noriega, who now faces drug charges.
The hidden ownership of First American violated banking laws requiring approval of such takeovers. Two weeks ago, the Federal Reserve Board ordered BCCI to sell its stake and abandon all U.S. operations, including offices in New York and California.
New York City Dist. Atty. Robert M. Morgenthau, who is presenting evidence to a grand jury, said on the CBS program that there were indications Clifford and Altman “have not told the truth” to the Fed and the New York superintendent of banks.
Clifford firmly denied the allegation, saying in an interview with Mike Wallace: “If the Fed has been deceived, if Mr. Morgenthau has been deceived, if the banking commissioner in New York has been deceived, I have been deceived.”
Clifford said that the person who misled him was Agha Hasan Abedi, a hard-charging Pakistani who founded the Luxembourg-based bank. Clifford has acknowledged that he worked closely with Abedi in managing First American, but said that he thought Abedi was acting solely as an adviser to the Arab investors. Clifford insisted that he had no knowledge of the bank’s secret ownership and that BCCI never exercised any control over his bank’s operations.
Those contentions were disputed by an unidentified former high official of BCCI who talked with CBS. According to CBS, the man said that “there was no doubt in the minds of BCCI executives as to who worked for whom.” He also charged that “Clifford and Altman misled banking regulators by concealing the ownership of First American by way of bogus shareholders.”
Clifford asserted that the first he learned of the foreign bank’s hidden ownership was when investigators uncovered it. And he said he was unaware of BCCI’s money laundering until the federal indictment in Tampa, Fla.
Clifford was asked about money belonging to Noriega that investigators found in a BCCI account at First American. Clifford said five checks went through the account in 1987 and 1988 bearing a notation, “Noriega,” in the left-hand corner. He said they were not noticed at the time, but even if they had been, “it wouldn’t have made any difference” because Noriega’s “reputation was such that he was on the U.S. payroll,” a reference to the widely held belief that Noriega was a paid informant of the CIA for some time.
Clifford suggested that BCCI had picked him to help it gain a foothold in the United States because of his reputation as a political power. He was a speech writer and confidante to Truman, personal attorney to former President John F. Kennedy, and defense secretary under former President Lyndon B. Johnson.
But the 84-year-old lawyer and banker said that the deception had triggered “the deepest sense of anger I have ever felt. . . . I would hope some day there would be some retribution because it has brought to me the most difficult period of my life.”
