Pakistan Offers Sanctuary to Key BCCI Figure : Scandal: The Saudi tycoon is respected throughout the nation. But the offer also reflects a potential deterioration in U.S.-Pakistani ties.

As Saudi Arabian tycoon Ghaith R. Pharaon was sailing aboard his three-stateroom yacht in the Mediterranean last week, one of Pakistan’s most powerful government ministers leaned back in his chair here and effectively extended the open arms of his nation to the man U.S. prosecutors say helped to mastermind what they call the biggest international bank fraud in history.

Pharaon “is a very close friend of mine,” said Interior Minister Shujaat Hussain, who has full authority to grant people citizenship and visas and block any other nation’s attempt to extradite them, once they are in this country.

What is more, Hussain added, “Dr. Pharaon”--as the entrepreneur is almost universally known here because of his doctorate from the Colorado School of Mines--is respected throughout Pakistan as one of the nation’s biggest foreign investors, although no one seems certain just how much of those investments he owns.

And the Bank of Credit & Commerce International, for which Pharaon is said to have served as a front man in the United States, is a celebrated Pakistani creation that most people here believe collapsed because it was the target of a U.S.-led, anti-Islamic conspiracy. The Federal Reserve Board imposed a record $200-million fine on BCCI and has moved to bar Pharaon, the bank’s founders and six others from future involvement in U.S. banking organizations.

All Pharaon need do is ask, Hussain told The Times, and Pakistan will be his new home and haven, complete with citizenship, protection from any eventual requests for extradition and virtual immunity from local prosecution.

Pharaon will not be alone if he accepts his friend’s offer. Several senior and mid-level BCCI managers who are objects of investigations in the United States have made their way here since the BCCI scandal erupted last month.

Pakistan, after all, is the homeland of about 10,000 of the BCCI’s 12,000 employees worldwide--the vast majority of them honest, highly professional people, largely unwitting victims of its demise.

And it is here, where the bank was founded two decades ago, that Hussain made clear in an interview that BCCI’s blameless and blamed alike can find shelter from investigations into the bank’s conduct in any of the more than 70 countries where it operated.

Among the blamed, the best known is the founder and former chairman of BCCI, Agha Hasan Abedi, a brilliant Pakistani entrepreneur who has been accused in the West of creating through BCCI an intricate criminal enterprise that prosecutors say was rivaled only by the Mafia. Abedi and former top BCCI officer Swaleh Naqvi were indicted July 30 by a grand jury in New York on charges that they masterminded a scheme to defraud. BCCI was also named in the indictment.

When asked whether Pakistan, which has a longstanding extradition treaty with the United States, would permit the extradition of the man who has achieved larger-than-life status, a man known to most here as “Agha Sahib,” Hussain said: “Politically, I don’t think it would be allowed. . . . We will not allow it.”

Thus Pakistan has apparently become BCCI’s port of last resort, one of only a handful of nations where the bank’s offices remain open, where the government has announced that it has no plans to investigate the bank’s operations and where BCCI is popularly viewed as a victim, not a villain.

But, as BCCI officials have begun trickling back to this refuge, it was clear that there is far more to Pakistan’s new policy than an assault from outside on a symbol of national pride.

Hussain’s position reflects a much deeper and potentially more serious deterioration in U.S. relations with a strategic South Asian nation it once counted among its closest, most reliable allies.

As Hussain said when asked about possible extradition of accused BCCI officers: “We don’t enjoy good relations with America. So why should we allow it?”

And the government’s apparent commitment to granting virtual immunity to BCCI and its affiliated corporations is also a clear illustration of the tunnel vision with which this long oppressed and impoverished nation has viewed the BCCI scandal.

For most Pakistanis--particularly government officials, bureaucrats, politicians and journalists who were friends of Abedi and his bank--the legal actions in the United States and the Bank of England’s move to shut down the bank worldwide last month were key thrusts in a Western plan to demoralize the Islamic world generally, and, in particular, to weaken Pakistan, which is closer than any other Muslim nation to possessing a nuclear bomb.

A flurry of newspaper reports in recent days have asserted that legal actions against BCCI are the opening salvo in a coordinated attack that will ultimately include an Israeli strike on Pakistan’s nuclear facilities. Many Pakistani analysts have charged that international press coverage of the BCCI scandal is a critical component of that anti-Pakistan conspiracy.

“There should not be any doubt that the well-planned smear campaign (that is) now totally gunning for Pakistan has only one objective--to isolate Pakistan and make it a pariah in the comity of nations,” declared writer Wajid Shamsul Hasan in this weekend’s edition of the popular Karachi magazine, Mag.

Even on the level of national policy, Interior Minister Hussain made it clear that Pakistan’s decision to harbor men such as Abedi and others accused or under investigation is closely linked with a strong sense at the highest level of the Pakistani government that America has betrayed its ally, both during and after the Gulf War.

Despite overwhelming popular support for Iraqi President Saddam Hussein a year ago, the government sent an armored division to join the U.S.-led, anti-Iraq coalition forces in the Gulf. Pakistan had anticipated that the Bush Administration would, in turn, successfully lobby for a renewal of the once-massive U.S. military and economic aid to Pakistan, which was cut by Congress last October when that body became convinced that Islamabad was on the brink of completing manufacture of as many as six nuclear warheads.

“After the way we helped them during the Gulf War, their type of attitude, it is very disappointing,” Hussain said of the American government. “During the Gulf War, 90% of our people were in favor of Saddam and anti-America, but our government took a stand in their favor. But right now, they think we’re monsters.”