BCCI Sought to Thwart U.S. Probes, Senate Report Says : Finance: The bank’s lawyers, lobbyists are accused of making false and misleading statements to investigators.

The Bank of Credit & Commerce International hired influential lawyers and lobbyists to thwart congressional and federal investigations into its illegal activities in the United States, according to a Senate report released Thursday.

While the report did not accuse the lawyers and lobbyists of criminal acts, it said the BCCI team--many of them former government officials--slowed the Senate inquiry of BCCI, delayed federal inquiries and kept other congressional committees from investigating the bank.

“Misleading and false statements were made to regulators, law enforcement and the Congress by BCCI’s lawyers and lobbyists,” the report said. “Investigations were delayed or halted entirely. Hearings were not held because BCCI and its team of former officials prevented them from being held.”

In addition, the report had harsh words for former Defense Secretary Clark M. Clifford and his law partner Robert Altman, who face criminal charges for their roles in the bank’s U.S. operations. And it leveled strong criticism at the CIA for failing to act years ago when it first discovered some of the bank’s illegal activities.

BCCI, which once operated in 73 countries and had $20 billion in assets, was shut down worldwide by regulators in July, 1991 , amid allegations of massive fraud, money laundering and support of terrorists.

The bank later pleaded guilty to federal racketeering charges and agreed to forfeit a record $550 million in U.S. assets. Losses to depositors and creditors are expected to top $10 billion.

The report by a Senate Foreign Relations subcommittee was the product of four years of work. While it did not contain any startling revelations, the two-volume, 794-page document provided the most detailed examination yet of the bank’s operations, particularly in the United States.

BCCI was thoroughly corrupt, according to the report. The Pakistani-run, Arab-financed bank engaged in a worldwide spree of financial fraud, arms trafficking, prostitution, money laundering, bribery and tax evasion before it was shut down.

“BCCI constituted international crimes of a level that boggles the mind,” said Sen. John Kerry (D-Mass.), chairman of the Foreign Relations subcommittee on terrorism, narcotics and international operations.

In singling out Clifford, the report challenged claims by the Democratic powerbroker and former presidential adviser that he was unaware of BCCI’s hidden ownership of Washington’s First American Bank during the decade he served as both First American’s chairman and BCCI’s lawyer.

Clifford and Altman are accused of helping BCCI secretly buy First American and of deceiving regulators and Congress about their involvement in BCCI’s illegal activities.

Clifford’s law firm collected $17 million in fees from First American and BCCI, and he and Altman shared $9.5 million in profits from a stock deal financed by BCCI and concealed from regulators, according to the report.

The two men face state criminal charges in New York City and federal charges in Washington for their alleged roles in the bank’s schemes.

Both have pleaded innocent, and the 85-year-old Clifford, a Washington fixture since the Harry S. Truman Administration, and who suffers from a heart ailment, has vowed to fight to salvage his reputation.

The report also said that BCCI was aided by a former member of the staff of Sen. Orrin G. Hatch (R-Utah), although it deleted Hatch’s name and said only that the person had been on the Senate payroll.

Michael Pillsbury, the former Hatch staff member and onetime assistant defense secretary, provided lobbying and public relations advice to BCCI in 1989 and 1990 while he was on the Senate payroll, according to the report.

Memos from BCCI defense lawyers said that Pillsbury was paid during that time by Mohammed Hammoud, a mysterious BCCI stockholder who died in 1990. Pillsbury told the Senate investigators that Hammoud had paid him an undisclosed amount of money to co-author a book but that he had returned the money.

Pillsbury recently told the New York Times that his behind-the-scenes efforts for BCCI were at the request of Hatch, a powerful member of the Judiciary Committee who once defended BCCI as a good corporate citizen.

Hatch has asked the Senate Ethics Committee to investigate Pillsbury’s activities, and his spokesman said that he had no comment on the report or on Pillsbury’s allegation.

Seymour Glanzer, Pillsbury’s lawyer, confirmed in an interview that his client had been acting on Hatch’s behalf and said that Pillsbury had done nothing wrong. He accused Kerry of “grandstanding” and of “refined McCarthyism.”

The report also criticized the CIA for failing to notify proper U.S. authorities after discovering in the mid-1980s that BCCI was engaged in massive money laundering and had secretly bought First American Bank.

“They (the CIA) had a report which could have put a stop to BCCI early on, years before it came to an end, and I believe if they had acted properly it could have saved the depositors around the world literally tens of millions of dollars or perhaps even hundreds of millions of dollars,” said Sen. Hank Brown (R-Colo.), the subcommittee’s ranking Republican.

The CIA has acknowledged using BCCI to finance covert operations and to monitor terrorist organizations. After discovering criminal activity within the bank, the CIA notified the Treasury Department and the Comptroller of the Currency. But the report said the agency failed to alert the Federal Reserve and the Justice Department, which had more direct authority over the allegations.