'Network of international crime' exposed

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The Independent Online
YESTERDAY's US Senate subcommittee report on the BCCI scandal is the most comprehensive expose yet of what John Kerry, who chaired the four-year investigation, called a 'mindboggling network of international crime', writes Rupert Cornwell.

It cost the deposits of a million investors, big and small, around the world when it was finally and belatedly shut down by regulators in July 1991.

In its 800 pages the report chronicles an almost unbelievable 20-year history of wrongdoing, involving 'fraud by BCCI and BCCI customers involving billions of dollars', money-laundering and wholesale bribery of officials in Europe, Asia, Africa and the Americas, and a 'panoply of financial crimes limited only by the imagination of its officers and customers'.

These included, the report's authors write after hearing 54 witnesses and reviewing 300,000 pages of documents, 'support of terrorism, arms trafficking and the sale of nuclear technologies, management of prostitution, the commission and facilitation of income tax evasion, smuggling and illegal immigration and the illicit purchases of banks and real estate'.

Even so, the whole story has yet to be told. 'This is not a complete picture,' Mr Kerry acknowledged yesterday. Indeed, the withering condemnation of the Bank of England, Price Waterhouse (UK) and the emirate of Abu Dhabi for the failure to shut down BCCI in April 1990 closes only a part of the most serious international banking scandal ever.

The report identifies no fewer than 20 areas for further investigation, including BCCI's involvement in Pakistan's nuclear programme, its manipulation of commodities markets, its involvement with secret US arms sales to Iran in the 1980s and its links with both Syria and the former Soviet Union when both countries were overtly anti-US, as well as its possible role in the Iraqi arms build- up which led to the Gulf war.

The report unearthed no direct evidence of a concerted cover-up by the US authorities of BCCI's wrongdoings. But it raises major questions about the CIA's role in the affair, including its failure to inform both the Federal Reserve and the Justice Department of what it knew of the bank as early as 1985 and its continuing use of BCCI for intelligence purposes afterwards.

What it does contain is profuse evidence of how both the former Defense Secretary Clark Clifford and his protege Robert Altman, the chief executives of BCCI's clandestinely acquired subsidiary First American Bank, 'participated in some portion of BCCI's deceptions in the US'.

According to the report Messrs Clifford and Altman, who face trial shortly on corruption and other charges: 'Concealed their own financing of First American shares from US regulators, withheld critical evidence in their efforts to keep the truth about BCCI's ownership of First American secret and deceived regulators and Congress about their knowledge of and personal involvement in BCCI's illegalities.'

This in turn was buttressed by a web of contacts with prominent political figures and former government officials who the bank hoped might provide a facade of respectability and thus further its cause.

Senator Kerry was especially critical of the leading PR firm Hill and Knowlton. He said it violated no laws but ended up by providing 'actually false' information to Congress and assisted in discrediting people seeking to expose the truth.

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