A Crackdown So Slow in Coming : The BCCI banking scandal gets curiouser and curiouser
Day by day, startling new disclosures are widening the international scandal surrounding Bank of Credit and Commerce International. Evidence of massive fraud and corruption, possible involvement of the CIA, a bank espionage network, political patronage and money laundering for government leaders and thugs alike are making BCCI the worst bank swindle ever.
The cast of players entangled in the web of BCCI’s far-flung operations is beginning to read like a who’s who in government, business and finance. The bank’s shady machinations are prompting questions from the chambers of the British House of Commons to the sands of Laguna Hills.
BCCI quietly operated on the fringe of the banking Establishment, since the 1970s, until governmental authorities abruptly seized its operations in 69 countries earlier this month. It was brought to the verge of collapse by a Ponzi-like scheme created by its operators, who allegedly pilfered the bank’s deposits. The bank--created in Pakistan and financed by Abu Dhabi but operated primarily out of London--was structured so as to cleverly skirt international banking laws. BCCI is said to have manipulated about $15 billion through 750 accounts over a 15-year period.
The new disclosures tumbling out each day seem to give credence to the idea that some time ago authorities had knowledge pointing to festering fraud and corruption at BCCI. Why did it take so long for them to crack down? Was their delayed response a matter of oversight or a cover-up?
The U.S. Justice Department, in particular, has come under fire for its inaction on the BCCI problem despite repeated warnings. Manhattan Dist. Atty. Robert Morgenthau, investigating BCCI dealings in New York, has accused the Justice Department of being uncooperative. Sen. John Kerry (D-Mass.) said the Justice Department failed to act after a Senate committee turned over evidence of BCCI money laundering that involved Manuel Noriega, then Panama’s leader.
In London, the Bank of England was first alerted of possible fraud at BCCI in April, 1990, by a Price Waterhouse audit report. In October another report echoed concerns. Nevertheless, authorities still didn’t respond, even after receiving a letter from a former international auditor for BCCI, Vivian Ambrose, who pointed to fraud and corruption at the bank. Now a question is arising as to what precisely did British Prime Minister John Major know of BCCI when he was chancellor of the exchequer two years ago. He admits to having had discussions about BCCI but disclaims any knowledge of fraud.
Other questionable dealings coming to light include $8 million in donations to charities of former President Jimmy Carter, who also hitched rides on BCCI aircraft. Why wasn’t he warned? Was it because the CIA allegedly used BCCI branches to make payoffs overseas? Someone identified with the BCCI known only as “Tumbleweed” was linked with Saudi intelligence. Time Magazine reported that BCCI even had its own deadly intelligence network.
In the United States, BCCI secretly acquired First American Bankshares in Washington in 1981 and allegedly used it to help finance fraudulent activities around the world. The defunct First American Currency in Laguna Hills funneled money into a Panamanian subsidiary of BCCI.
All this makes for an ugly picture. Rep. Henry B. Gonzalez (D-Tex.), chairman of the House Banking Committee, plans to hold hearings in September in an effort to get to the bottom of the BCCI mess. There are too many unanswered questions when it comes to who was or should have been accountable in the United States once evidence of BCCI’s shady dealings emerged. Justice Department officials are now conducting a wide-ranging criminal investigation. What took so long?
