U.S. to Drop BCCI Charges Against Clifford, Altman

Citing former Defense Secretary Clark M. Clifford’s poor health and the continuing New York state trial of his law partner, Robert A. Altman, the Justice Department Wednesday moved to drop fraud and conspiracy charges against the two in an international bank scandal.

But federal prosecutors sought to reserve their right to bring broader charges against the two after the conclusion of Altman’s New York trial, which began last month. Clifford is recovering from quadruple bypass surgery.

The Justice Department noted that U.S. District Judge Joyce Hens Green has indicated that she would not go along with delaying the federal trial, which was to have begun June 1.

Clifford, a longtime adviser to Democratic presidents, and Altman were indicted last July on charges of conspiring to defraud the Federal Reserve Board by concealing Bank of Credit & Commerce International’s alleged control of a Washington bank chain, First American Bankshares Inc., of which Clifford was chairman and Altman was president.

New York brought broader bribery and fraud charges against the two men growing out of the BCCI scandal, but Clifford did not go to trial because of his health.

Foreign-owned BCCI was shut down in 1991 after regulators around the world accused it of stealing billions of dollars from depositors and funneling the money to bank insiders--actions said to rank among the greatest financial frauds ever.

Carl S. Rauh, attorney for Clifford and Altman in the federal case, said that they “are very pleased” by the Justice Department’s move. He dismissed as a “very little concession” their agreement not to object to prosecutors bringing renewed charges without having to obtain a grand jury indictment.

“It’s very unlikely they (federal prosecutors) will bring other charges,” Rauh contended.

Both men had pleaded not guilty.

Only a month ago, federal prosecutors said in a pretrial hearing that they would seek broader, superseding charges against the two men, alleging that they knew of BCCI’s illegal effort to control First American from the start of the alleged conspiracy in 1977--which were charges similar to those brought by New York prosecutors. The federal indictment alleged crimes beginning in 1985.

A Justice Department spokesman dismissed any suggestion of politics in the move to drop the charges. He noted that the decision was made by John C. Keeney, acting head of the department’s criminal division, and Laurence A. Urgenson, acting deputy assistant attorney general--both career officials. The decision was taken to Atty. Gen. Janet Reno, and she concurred, the spokesman said.

Clifford, 86, underwent open heart surgery March 22, making it “nearly certain that he will not be available for trial on June 1, let alone available in advance to assist his attorneys in preparation for trial,” the department’s motion said.

Altman’s New York trial, which may stretch into the fall, makes it “unlikely in the extreme that he will be ready or available for trial on June 1,” the department said.

“Most significantly, preparation for a federal trial will burden the New York prosecutors as well,” the motion said. “A concurrent federal prosecution inevitably will interfere with the state case, since evidence overlaps and witnesses necessary to both cases will be on call in both Washington and New York.”