Ex-Official Sheds New Light on BCCI Workings

Bank Chairman Agha Hasan Abedi, President Swaleh Naqvi and a few other top officials of the Bank of Credit & Commerce International drained it of more than $2.5 billion through bad investments and fraud, the bank’s former chief financial officer charged Thursday.

The former official, Masihur Rahman, told a Senate Foreign Relations subcommittee that “not more than 20” BCCI officials were involved in “illegal and irregular” activity that virtually wiped out the bank’s capital in 1985 and four years later set the bank on the road to collapse.

Rahman’s testimony, before Sen. John Kerry (D-Mass.) and his subcommittee on terrorism, narcotics and international operations, provided a wealth of new material on the inner workings of the troubled bank, which was shut down by regulators around the world last month and is the subject of criminal and civil charges in the United States. Abedi and Naqvi were indicted in New York last week on fraud charges.

Rahman also described BCCI’s annual conferences, run by Abedi and attended by foreign banking officials. Rahman said both First American Bank Chairman Clark M. Clifford and President Robert A. Altman attended these “get-togethers.”

Rahman submitted a roster of participants in a BCCI annual conference held in Vienna in 1984, listing an 11-member delegation from the National Bank of Georgia and several “special invitees,” including Altman and First American officials K.K. Elley and Aijaz Afridi. The Federal Reserve Board alleges in a lawsuit that BCCI owned both the National Bank of Georgia and First American in defiance of U.S. bank regulations.

Clifford and Altman have denied knowing that BCCI owned First American, and against that backdrop, it was unclear why, according to Rahman, they would have attended BCCI meetings as First American representatives. Rahman did not speak to a key concern of Federal Reserve officials--whether BCCI had a direct hand in running First American--because he was not involved in operational matters of this sort, according to committee aides. Clifford’s office, contacted late Thursday, made no comment about Rahman’s statements.

Rahman, 57, said he joined BCCI in 1974.