Lance Admits Playing Key BCCI Role : Scandal: The former Carter Administration official says he advised the bank’s founder on how to expand operations into the United States.
Bert Lance, White House budget director in the Jimmy Carter Administration, told a Senate panel Wednesday that he played a key role in bringing the scandal-ridden Bank of Credit & Commerce International to the United States by urging the bank’s founder to acquire a bank holding company--which BCCI subsequently did, secretly and illegally.
Testifying before the Senate Foreign Relations subcommittee on terrorism, narcotics and international operations, Lance said his contact with BCCI founder Aga Hasan Abedi began within weeks of his resignation under fire in September, 1977, as director of the Office of Management and Budget.
Lance said he first asked his Washington counsel, Clark M. Clifford, to determine Abedi’s integrity. After a quick inquiry turned up no apparent problems, Lance proposed that Clifford and his protege, Robert Altman, become legal advisers to Abedi and BCCI in their prospective U.S. operations.
BCCI then proceeded with its attempt to acquire the Washington-based bank holding company, Financial General Bankshares, Lance said. It succeeded in acquiring the company, renamed First American Bankshares, through intermediaries three years later.
Clifford and Altman, who resigned under pressure last August as chairman and president of First American, have steadfastly insisted that they had no idea BCCI was the actual owner of their bank. Both are scheduled to testify before the subcommittee today.
Lance also testified that Abedi, whom he said he admired in those early years as a banker with an abiding commitment to Third World development, put him in touch with Saudi millionaire Ghaith Pharaon as a buyer for his own bank, National Bank of Georgia, of which Lance was a 12% shareholder. The Federal Reserve has since charged that Pharaon acquired the bank while acting as a front man for BCCI.
Lance said Clifford and Altman were closely involved with Pharaon’s acquisition of NBG and the attempt by BCCI to acquire Financial General, an effort that was challenged in 1978 by the Securities and Exchange Commission and the Federal Reserve Board on grounds that intermediaries were being used to complete the sale. When many of those same intermediaries secretly acquired First American, Clifford and Altman assured the Fed that BCCI had no role in the acquisition.
The subcommittee made public a Jan. 30, 1978, cable to Abedi from Abdus Sami, one of his top aides, outlining how Clifford had been consulted on acquisition strategy from the start of BCCI’s move into U.S. banking. It said “our friend”--Lance--recommended Clifford as “chief counsel” and added: “Accordingly, I met Mr. Clark Clifford and explained to him our strategy and goals. He was happy to know the details and has blessed the acquisition.”
Outlining part of the acquisition strategy, the cable went on to say that, “to keep individual ownership below 5%, we have to distribute the ownership to four persons of substance. . . . We have to be careful that our name does not appear as financier to most of them for this acquisition.”
