Hatch Tried to Get BCCI Loan for Friend : Thrifts: The senator did not know his associate was being sued for a defaulted loan from a failed savings and loan at the same time, his spokesman says.
Sen. Orrin G. Hatch tried to help a business associate obtain a loan from the Bank of Credit & Commerce International last year while the associate was being sued by a federal agency over a defaulted loan from a failed savings and loan, according to court records and interviews.
The Utah Republican said through a spokesman, however, that he was unaware of the civil suit when he telephoned the president of BCCI about a possible loan for Monzer A. Hourani, a Houston businessman who manages thousands of dollars in personal funds for Hatch. The senator knew only that Hourani was in financial difficulty, the spokesman said.
Hatch’s telephone call to BCCI President Swaleh Naqvi on behalf of Hourani came after the senator defended the bank on the floor of the Senate following its guilty plea to laundering drug money.
Hatch’s actions on behalf of BCCI and his relationships with several BCCI figures have drawn him into the controversy surrounding the defunct bank and its activities.
But Hatch, a member of the Senate Judiciary Committee, has not been accused of wrongdoing. After NBC television reported last month that he was under investigation in connection with BCCI, Hatch obtained a letter from the Justice Department saying that he is not a subject or a target of the federal inquiry.
Federal grand juries in four cities are investigating accusations that BCCI used front men and other influential people to conceal a variety of illegal activities, including the secret acquisition of First American Bankshares in Washington and Independence Bank of Encino, Calif.
A tentative agreement between the government and BCCI’s liquidators to settle pending state and federal fraud charges against the bank could be announced as soon as today, Bush Administration officials said.
The deal, first reported in Wednesday’s Wall Street Journal, calls for the bank to plead guilty to the charges, pay substantial fines and cooperate with the ongoing investigations.
Hatch came to BCCI’s defense after it pleaded guilty to money-laundering charges in federal court in Tampa, Fla., in January, 1990. A month after the plea, Hatch told fellow senators that the bank was a “responsible corporate citizen,” and he praised its management.
Government sources investigating BCCI said the laudatory remarks came after Hatch received a letter making similar points from longtime friend Robert A. Altman, a Washington lawyer for BCCI and then president of First American Bankshares. Altman and his law partner, Clark M. Clifford, are now under federal investigation.
It was sometime after defending the bank that Hatch telephoned Naqvi on behalf of Hourani, said J. Paul Smith, the senator’s press secretary. Smith said the exact date of the call was unavailable because it was not recorded on office logs.
The call came after Hourani told Hatch that he was having financial difficulties and Hatch offered to seek help for him at BCCI, Smith said. Hatch believes that he got Naqvi’s name from Altman, who had represented the Luxembourg-based bank for many years, Smith said.
Hatch thought Naqvi might be interested in assisting Hourani, who comes from a prominent Lebanese family, because of the bank’s extensive Middle East ties, Smith said. Hourani said in a recent interview that he wrote to BCCI after Hatch’s call but that he never received a loan from the bank.
At the time Hatch telephoned Naqvi, the Federal Deposit Insurance Corp. had a lawsuit pending against Hourani in federal court in Houston. The FDIC won a $2-million judgment against Hourani and a development company last February over a debt to defunct Alliance Savings.
In addition, the FDIC and the Resolution Trust Corp. sued Hourani in May, 1990, in connection with the failure of Commonwealth Savings in Houston. The agencies won a $6-million judgment against Hourani in November, 1990, government sources said.
Details of the Commonwealth suit are not public because, in an unusual action, the RTC and FDIC agreed to a request by Hourani’s lawyer that the federal court file be sealed. Hourani’s lawyer said he could not talk about the case, and Hourani did not respond to messages left at his office this week.
Hourani, a Mormon, said he was introduced to Hatch in the early 1980s by another church member. They became friendly and Hourani contributed to Hatch’s Senate campaigns.
In 1986, Hatch wrote to federal regulators on behalf of Hourani in a dispute involving Mainland Savings, which had been taken over by the government. Although he said he did not want to interfere in the regulatory process, Hatch suggested that regulators try to resolve differences with Hourani’s lawyers to avoid a costly lawsuit.
Two years later, Hatch placed $10,000 in a trust and appointed Hourani as the trustee, according to Hatch’s financial disclosure forms. The money was invested in a Houston condominium in the hopes that real estate prices in the Texas city would rebound, Smith said.
RELATED STORY: D1