It used to be called usury. These days it’s called “charging interest on loans” and is the raison d’être of those ubiquitous institutions, banks. Since the 17th century banks have loaned money to nations and companies as well as to individuals, and accordingly they have been charged with manipulation of national and international affairs. According to the True Conspiracies website the following, among other sins, can be laid at the reinforced doors of “the banks” (punctuation, spelling, capitalization, etc., sic):
- Boom and bust cycles along with the depressions, stock market crashes and wars are deliberately caused to make people lose money to the conspirators. They also weaken the people and tame governments into accepting the conspirators’ solutions.
- The history books controlled by the conspiracy do not tell the full truth on why many events happen. For example the conspirators blame slavery for the American civil war but the real reason was to establish a central bank in the USA and to force a war to enable them to lend money at interest. […]
- The conspirators bribed members of the government by paying them and having them work for the bank. Intense deceptive media publicity convinced the public and politicians of the benefit of the Federal Reserve Act. It was done in ways such as by lying and saying that the banks will reduce boom and bust cycles. The Federal Reserve Act was passed near Christmas when few people were present to vote against it.
- Hitler was funded by the USA and Britain to create a bigger war. The U.S. government controlled by the bankers conspiracy, wanted Hitler to invade America but he declined due to the risk of the number of Americans with guns. The U.S. government also encouraged Japan to invade Pearl Harbor to get America into the war.
- The bankers funded Arab and Japanese companies to buy up property around the world so the bankers could gain more control of it.
- Manipulation of agriculture has and will be used to force the population to accept the conspirators’ demands such as having to surrender guns to get food.
- The U.S. deliberately tried to lose the Korean and Vietnam wars so the communists would remain with territory. […]Although involved with the conspiracy since his initial rise to power, President Kennedy was killed by an agent of the conspiracy for wanting to pull out of Vietnam and printing silver currency.
- Many countries now with conflicts had peace until the influence of International Bankers Conspiracy.
- The collapse of the Soviet Union was a hoax to fool the world into a false sense of security and also to slowly cause the world to accept communism. The bankers funded the Soviet Union to create an arms race, which cost time and money. Also it caused the nations to gladly surrender their arms in the name of peace so that the goal of a one-world army could be formed under the control of the United Nations.
- In World War 2 the US and British governments controlled by the bankers succeeded in getting the Soviet Union to control much of Eastern Europe.
- They can control the weather for Biological warfare. They are deliberately ruining the environment to gain more control.
Phew. And there’s plenty more where that came from! In the fevered minds of some conspiracy theorists, the banks are run by a cabal of families – principally the Rothschilds, the Warburgs, Loebs and the Rockefellers – who hammer out their joint policy in the Bilderberg Group and implement said policy via various front organizations. The Bank of England, the Federal Reserve, the International Monetary Fund and the World Bank all hold a special chill place in the hearts of the conspiracy theorists as the business end of the international banking conspiracy. And the end goal of that conspiracy? A New World Order, naturally.
A distinct flaw in the international banking conspiracy theory is that the national banks continue to operate with patriotic bias. The Bank of England still promotes British interests above all others; the Bundesbank acts resolutely in favour of German strategy (which, according to some on the British left, is a conspiracy to run Europe from Berlin, a sort of soft-glove Third Reich), and so on and so forth. Then there’s that nasty sheen of anti-Semitism over much of the banking conspiracy theory, just as it had in the 1930s when Adolf Hitler blamed “Jew financiers” for the world’s woes, principally Bolshevism. Sixty years later it’s still the Jews who “destroyed Christian old line companies … who want Islamic owned companies excluded from Dow Jones … [who] live on the labour of others” according to the internet site Jew Watch. It’s not difficult to debunk the anti-Semitic fantasy: It takes just one name, the name of J.P. Morgan. The superbanker was a white Christian. Take out the anti-Semitism and the puppet-and-string notion of politics, however, and the conspiracists raise legitimate concerns about the most powerful of financial institutions.
Banks are one of the globalizing forces seeking to enervate the nation state, and banks do discuss mutual interests in elite forums such as Bilderberg, Le Cercle and the Trilateral Commission. The International Monetary Fund does operate in the worldwide capitalist interest (as numerous left-wing regimes have discovered when obliged to alter their internal economies in return for aid). Sometimes banks are immoral: the Vatican Bank allegedly laundered money for the Mafia (see Roberto Calvi), the Banco Nationale del Lavoro funded illegal arms purchases, Barclays underpinned the apartheid regime of South Africa before, with breathtaking hypocrisy, funding the black dictatorship of Mugabe in Zimbabwe …For sheer criminality, however, the Bank of Commerce and Credit International (BCCI) remains unsurpassed.
The sorry tale of the BCCI is also one which ties in some of the biggest names of late 20th-century history, among them George W. Bush, Henry Kissinger and Osama bin Laden.The BCCI was founded in 1972 by the Pakistani banker Agha Hasan Abedi, with an initial chest of £2.5 million. In an astute piece of marketing it proclaimed itself the “Third World Bank”, with a mission to promote prosperity in the corners of the globe that Western banks ignored. Within a decade it had a million depositors and was working its way to a paper value of $25 billion. Despite its “Third World Bank” tag, BCCI was keen to break into North America, where in 1977 it bought four banks, including the First American Bank.
BCCI’s vigorous asset-buying hid the bank’s true financial status: it was verging on insolvency. And much of whatever money BCCI was making was coming from illegal activities. By the mid-1980s the CIA, the Internal Revenue Service and the Drug Enforcement Agency were respectively informing the US State, Treasury and Justice departments that BCCI was laundering drugs money. These alarms were all ignored – possibly because some branches of the CIA itself were using BCCI for clandestine purposes – until 1987, when president Manuel Noriega of Panama was discovered to be among those using BCCI to launder drugs money.
The lid could no longer be kept on. The US Senate Subcommittee on Terrorism, Narcotics and International Operations launched an investigation into BCCI under Senator John Kerry. When Kerry eventually delivered his report on “The BCCI Affair” to the Committee on Foreign Relations, US Senate, in December 1992, he recorded a catalogue of larceny by BCCI that ranged from narcotics trafficking to money-laundering.Such a catalogue of criminality would, one might presume, have the US administration champing at the bit to close BCCI down. Not a bit of it. Which is where the allegation of “conspiracy” enters stage right.
One of the companies which borrowed money from BCCI, Harken Energy, had on its board of directors one George W. Bush, the US president’s scion. BCCI lobbyists and advisers included Henry Kissinger’s consultancy, Kissinger Associates. The CIA, while denouncing BCCI on the one hand, was “float[ing] in and out of BCCI” (Kerry) on the other, was possibly using the bank to run funds to the Mujahadeen in Afghanistan, and was definitely working to some unspecified end through BCCI’s affiliate, Capcom. Even smiling Jimmy Carter and rainbow coalition leader Jesse Jackson were receivers of BCCI’s largesse. In other words, a vast number of US luminaries had a vested interest in halting Kerry’s work – which is exactly what happened in 1989, when the Justice Department stalled his investigation. According to Washington Monthly, personal pressure from no less than Jacqueline Kennedy Onassis was put on Kerry to desist.
To Kerry’s credit he refused to give up completely, and approached New York District Attorney Robert Morgenthau with irrefutable evidence that BCCI was handling the accounts of the Colombian Medellin drugs cartel and diverting funds to the terrorist Abu Nidal. In 1990 the Bush administration gave BCCI a rap over the knuckles, but refused to close the bank down. That task fell eventually to the Bank of England in July 1991, although the publication of Kerry’s report (now co-authored by Senator Hank Brown) in the following year administered the coup de grâce. BCCI was indicted for money-laundering, bribery and grand larceny.
Shutting the doors of BCCI did not prevent $13 billion going missing – not that any of the monies went to the bank’s staff or small investors, the latter queueing fruitlessly to retrieve their deposits from BCCI branches. There are no answers as to where the missing monies went, although there are hints that some of the bank’s bigger clients received larger than usual remunerations in the run-up to the collapse.An investigation by the French intelligence service found that one Osama bin Laden was a BCCI customer. It is within the bounds of possibility that bin Laden was among those who benefited in the last days of the BCCI criminal empire.
DOCUMENT: REPORT OF SENATOR JOHN KERRY ON “THE BCCI AFFAIR” TO THE COMMITTEE ON FOREIGN RELATIONS, UNITED STATES SENATE, IN DECEMBER 1992
BCCI’s unique criminal structure – an elaborate corporate spider-web with BCCI’s founder, Agha Hasan Abedi, and his assistant, Swaleh Naqvi, in the middle – was an essential component of its spectacular growth, and a guarantee of its eventual collapse. The structure was conceived by Abedi and managed by Naqvi for the specific purpose of evading regulation or control by governments. It functioned to frustrate the full understanding of BCCI’s operations by anyone. Unlike any ordinary bank, BCCI was from its earliest days made up of multiplying layers of entities, related to one another through an impenetrable series of holding companies, affiliates, subsidiaries, banks-within-banks, insider dealings and nominee relationships. By fracturing corporate structure, record keeping, regulatory review, and audits, the complex BCCI family of entities created by Abedi was able to evade ordinary legal restrictions on the movement of capital and goods as a matter of daily practice and routine. In creating BCCI as a vehicle fundamentally free of government control, Abedi developed in BCCI an ideal mechanism for facilitating illicit activity by others, including such activity by officials of many of the governments whose laws BCCI was breaking.[…]
Among BCCI’s principal mechanisms for committing crimes were shell corporations, bank confidentiality and secrecy havens, layering of corporate structure, front-men and nominees, back-to-back financial documentation among BCCI controlled entities, kick-backs and bribes, intimidation of witnesses, and retention of well-placed insiders to discourage governmental action.[…]
However daunting the task of explicating the full extent of BCCI’s criminality, it is essential to recognize that at core, BCCI was not a bank which made an adequate return on investment through lending out depositors’ funds like other banks, but a “Ponzi scheme,” which used new depositors’ funds to pay current expenses and to repay earlier depositors, creating a pyramid of mounting obligations that ultimately and inevitably would bring about BCCI’s collapse.[…]
From the beginning, BCCI President Abedi conceived of BCCI as a machine with two driving mechanisms – asset growth and faith. The latter was essential to prevent a day of reckoning when depositors and creditors alike would cause a run on the bank. The former was necessary to sustain the latter through bad times. Together, they worked to sustain the illusion that BCCI was solvent, when in fact, it is unlikely BCCI was ever solvent.
On 18 December 1991, in an agreement with the Justice Department and New York District Attorney, BCCI’s liquidators pleaded guilty to having engaged in a criminal conspiracy through financial fraud, and thereby constituting a Racketeering Influenced and Corrupt Organization (RICO), whose entire assets, legitimate and illegitimate, were subject to confiscation by the government. Specific crimes admitted to by BCCI’s liquidators in the agreement included:Seeking deposits of drug proceeds and laundering drug money Seeking deposits from persons attempt to evade US income taxesUsing “straws” and nominees to acquire control of US financial institutionsLying to regulators and falsifying regulatory documentsCreating false bank records and engaging in sham transactions to deceive regulators.[…]
The New York District Attorney found that among the major actions taken by BCCI to carry out its fraud were:Employing the ruling families of a number of Middle Eastern states as nominees for BCCI, who pretended to be at risk in BCCI but who were in fact guaranteed to be held harmless by BCCI for any actual losses.Using bank secrecy havens including Luxembourg and the Cayman Islands to avoid regulation on a consolidated basis by any single regulator of BCCI, and thereby to permit BCCI to transfer assets and liabilities from bank to bank as needed to conceal BCCI’s true economic status.Paying bribes and kickbacks to agents of other banking and financial institutions, thereby avoiding the scrutiny of regulators.[…]
Money-Laundering
From the time of BCCI’s indictment on drug money-laundering charges in Tampa, Florida in October, 1988, there was little doubt to anyone looking at the facts that BCCI had been used to launder drug money.The Customs agents working on the “C-Chase” case against BCCI moved millions of dollars in US currency, representing the proceeds of cocaine sales, through BCCI Panama, BCCI Luxembourg, and LOANS Switzerland as a result of the knowing participation of several BCCI officials.As Robert Mazur, the Customs agent in Tampa who selected BCCI as the target of the Customs money-laundering sting testified, BCCI bank executives volunteered methods to enhance and improve his techniques for money-laundering, and shortly before the sting ended the operation, offered to introduce Mazur to other potential “cash” customers for money-laundering services from Bogota, Colombia.[…]
Given BCCI’s size and dispersion, money-laundering at BCCI would have been inevitable under any circumstances. Given BCCI’s never ending quest for assets and its management’s attitude towards laws, it was ubiquitous. As Akbar Bilgrami explained, Abedi was constantly telling BCCI employees that the only thing that mattered was the generation of assets. When Bilgrami was in Colombia in the mid-1980s [sic], a period when Colombia had already developed the reputation as the center for cocaine smuggling and drug money, Abedi told him that he needed to increase BCCI’s activity in Colombia to $1 billion in local currency in deposits, and $1 billion in US denominated deposits – funds which obviously could only be generated, directly or indirectly, from the drug trade.[…]
The degree of BCCI-US’s reliance on money-laundering as a principal business was demonstrated by what happened when BCCI put into place a “compliance program” as part of its January 1990 plea agreement resolving the Tampa money-laundering case: business dropped noticeably, especially referrals from other BCCI locations, because neither BCCI nor its customers wanted to provide details about the customers’ businesses.BCCI’s clients for money-laundering included Panamanian General Manuel Noriega, for whom it managed some $23 million of criminal proceeds out of its London branches; Pablo Escobar, of the Medellin cartel; Rodriguez Gacha, of the Medellin cartel; and several members of the Ochoa family.
Bribery
Bribery was a key component of BCCI’s strategy for asset growth worldwide, from the earliest days of the bank. In some cases, the recipients of funding from BCCI may not have considered the payments to be “bribes,” but simply a mechanism by which BCCI obtained what it wanted from an official, and in return the official helped BCCI, such as BCCI’s payments to two of the Gulf emirs in return for the use of their names as nominees for the purchase of First American. In other cases, the bribes were naked and direct quid pro quos, such as BCCI’s payments to Central Bank officials in return for Central Bank deposits in countries like Peru. In other cases, BCCI made campaign contributions to politicians, such as it did with General Zia in Pakistan and Carlos Andres Perez in Venezuela. In still other cases, BCCI’s payments came in the guise of charitable contributions, and provided BCCI with an entree to generate deposits from others, as in the case of President Jimmy Carter. Among the Americans who BCCI provided with financial assistance in addition to Carter were US Ambassador to the United Nations Andrew Young, Bert Lance, and Jesse Jackson. Abroad, important figures with extensive contact with BCCI included former British Prime Minister James Callaghan, then United Nations Secretary General Javier Perez de Cuellar, Jamaican prime minister Edward Seaga, Antiguan prime minister Lester Byrd; a large number of African heads of state; and many Third World central bank officials.[…]
Support of Terrorism and Arms TraffickingBCCI’s support of terrorism and arms trafficking developed out of several factors. First, as a principal financial institution for a number of Gulf sheikhdoms, with branches all over the world, it was a logical choice for terrorist organizations, who received payment at BCCI-London and other branches directly from Gulf-state patrons, and then transferred those funds wherever they wished without apparent scrutiny. Secondly, BCCI’s flexibility regarding the falsification of documentation was helpful for such activities. Finally, to the extent that pragmatic considerations were not sufficient of themselves to recommend BCCI, the bank’s pan-third world and pro-Islam ideology would have recommended it to Arab terrorist groups.
Arms trafficking involving BCCI included the financing of Pakistan’s procurement of nuclear weapons through BCCI Canada, as documented in the Parvez case, involving a Pakistani who attempted to procure nuclear-related materials financed by BCCI through the United States.In a letter of 22 November 1991 to the Subcommittee, the CIA stated that “the Agency did have some reporting [as of 1987] on BCCI being used by third world regimes to acquire weapons and transfer technology,” but was unwilling to elaborate on the nature of this activity in public.In early August, 1991, the Committee was provided with documents from the Latin American and Caribbean Region Office (LACRO) of BCCI, describing the offer for sale by the Argentine air force of 22 Mirage aircraft for $110 million. The planned sale was to have been made to Iraq, as part of Saddam Hussein’s massive military build up prior to the Gulf war. BCCI was acting as the broker for the transaction, which was to take place in August or September of 1989, but not completed as a result of a dispute within the Argentine military itself. Arms sales involving BCCI from Latin America to the Middle East remain, as of April 1992, under active investigation by US law enforcement.Abu NidalIn the United Kingdom, a key window on BCCI’s support of terrorism was an informant named Ghassan Qassem, the former manager of the Sloan [sic] Street branch of BCCI in London. Qassem had been given the accounts of Palestinian terrorist Abu Nidal at BCCI, and then proceeded, while at BCCI, to provide detailed information on the accounts to British and American intelligence, apparently as a paid informant, according to press accounts based on interviews with Qassem.As of 1986, the information obtained about Abu Nidal’s use of BCCI was sufficiently detailed as to justify dissemination within the US intelligence community.[…]
Other terrorist groups continued to make use of BCCI, including one “state sponsor of terrorism,” and the Qassar brothers, Manzur and Ghassan, who have been associated with terrorism, arms trafficking, and narcotics trafficking in connection with the Government of Syria, and with the provision of East Bloc arms to the Nicaraguan contras in a transaction with the North/Secord enterprise paid for with funds from the secret US arms sales to Iran.[…]
Prostitution
BCCI’s involvement in prostitution arose out of its creation of its special protocol department in Pakistan to service the personal requirements of the Al-Nahyan family of Abu Dhabi, and on an as-needed basis, other BCCI VIPs, including the families of other Middle Eastern rulers. Several BCCI officers described the protocol department’s handling of prostitution to Senate investigators in private, and two – Abdur Sakhia and Nazir Chinoy – confirmed their general knowledge of the practice in testimony. The prostitution handled by BCCI was carried over from practices originally instituted by Abedi at the United Bank, when, working with a woman, Begum Asghari Rahim, he cemented his relationship with the Al-Nahyan family through providing them with Pakistani prostitutes.
A distinct flaw in the international banking conspiracy theory is that the national banks continue to operate with patriotic bias. The Bank of England still promotes British interests above all others; the Bundesbank acts resolutely in favour of German strategy (which, according to some on the British left, is a conspiracy to run Europe from Berlin, a sort of soft-glove Third Reich), and so on and so forth. Then there’s that nasty sheen of anti-Semitism over much of the banking conspiracy theory, just as it had in the 1930s when Adolf Hitler blamed “Jew financiers” for the world’s woes, principally Bolshevism. Sixty years later it’s still the Jews who “destroyed Christian old line companies … who want Islamic owned companies excluded from Dow Jones … [who] live on the labour of others” according to the internet site Jew Watch. It’s not difficult to debunk the anti-Semitic fantasy: It takes just one name, the name of J.P. Morgan. The superbanker was a white Christian. Take out the anti-Semitism and the puppet-and-string notion of politics, however, and the conspiracists raise legitimate concerns about the most powerful of financial institutions.
Banks are one of the globalizing forces seeking to enervate the nation state, and banks do discuss mutual interests in elite forums such as Bilderberg, Le Cercle and the Trilateral Commission. The International Monetary Fund does operate in the worldwide capitalist interest (as numerous left-wing regimes have discovered when obliged to alter their internal economies in return for aid). Sometimes banks are immoral: the Vatican Bank allegedly laundered money for the Mafia (see Roberto Calvi), the Banco Nationale del Lavoro funded illegal arms purchases, Barclays underpinned the apartheid regime of South Africa before, with breathtaking hypocrisy, funding the black dictatorship of Mugabe in Zimbabwe …For sheer criminality, however, the Bank of Commerce and Credit International (BCCI) remains unsurpassed.
The sorry tale of the BCCI is also one which ties in some of the biggest names of late 20th-century history, among them George W. Bush, Henry Kissinger and Osama bin Laden.The BCCI was founded in 1972 by the Pakistani banker Agha Hasan Abedi, with an initial chest of £2.5 million. In an astute piece of marketing it proclaimed itself the “Third World Bank”, with a mission to promote prosperity in the corners of the globe that Western banks ignored. Within a decade it had a million depositors and was working its way to a paper value of $25 billion. Despite its “Third World Bank” tag, BCCI was keen to break into North America, where in 1977 it bought four banks, including the First American Bank.
BCCI’s vigorous asset-buying hid the bank’s true financial status: it was verging on insolvency. And much of whatever money BCCI was making was coming from illegal activities. By the mid-1980s the CIA, the Internal Revenue Service and the Drug Enforcement Agency were respectively informing the US State, Treasury and Justice departments that BCCI was laundering drugs money. These alarms were all ignored – possibly because some branches of the CIA itself were using BCCI for clandestine purposes – until 1987, when president Manuel Noriega of Panama was discovered to be among those using BCCI to launder drugs money.
The lid could no longer be kept on. The US Senate Subcommittee on Terrorism, Narcotics and International Operations launched an investigation into BCCI under Senator John Kerry. When Kerry eventually delivered his report on “The BCCI Affair” to the Committee on Foreign Relations, US Senate, in December 1992, he recorded a catalogue of larceny by BCCI that ranged from narcotics trafficking to money-laundering.Such a catalogue of criminality would, one might presume, have the US administration champing at the bit to close BCCI down. Not a bit of it. Which is where the allegation of “conspiracy” enters stage right.
One of the companies which borrowed money from BCCI, Harken Energy, had on its board of directors one George W. Bush, the US president’s scion. BCCI lobbyists and advisers included Henry Kissinger’s consultancy, Kissinger Associates. The CIA, while denouncing BCCI on the one hand, was “float[ing] in and out of BCCI” (Kerry) on the other, was possibly using the bank to run funds to the Mujahadeen in Afghanistan, and was definitely working to some unspecified end through BCCI’s affiliate, Capcom. Even smiling Jimmy Carter and rainbow coalition leader Jesse Jackson were receivers of BCCI’s largesse. In other words, a vast number of US luminaries had a vested interest in halting Kerry’s work – which is exactly what happened in 1989, when the Justice Department stalled his investigation. According to Washington Monthly, personal pressure from no less than Jacqueline Kennedy Onassis was put on Kerry to desist.
To Kerry’s credit he refused to give up completely, and approached New York District Attorney Robert Morgenthau with irrefutable evidence that BCCI was handling the accounts of the Colombian Medellin drugs cartel and diverting funds to the terrorist Abu Nidal. In 1990 the Bush administration gave BCCI a rap over the knuckles, but refused to close the bank down. That task fell eventually to the Bank of England in July 1991, although the publication of Kerry’s report (now co-authored by Senator Hank Brown) in the following year administered the coup de grâce. BCCI was indicted for money-laundering, bribery and grand larceny.
Shutting the doors of BCCI did not prevent $13 billion going missing – not that any of the monies went to the bank’s staff or small investors, the latter queueing fruitlessly to retrieve their deposits from BCCI branches. There are no answers as to where the missing monies went, although there are hints that some of the bank’s bigger clients received larger than usual remunerations in the run-up to the collapse.An investigation by the French intelligence service found that one Osama bin Laden was a BCCI customer. It is within the bounds of possibility that bin Laden was among those who benefited in the last days of the BCCI criminal empire.
DOCUMENT: REPORT OF SENATOR JOHN KERRY ON “THE BCCI AFFAIR” TO THE COMMITTEE ON FOREIGN RELATIONS, UNITED STATES SENATE, IN DECEMBER 1992
BCCI’s unique criminal structure – an elaborate corporate spider-web with BCCI’s founder, Agha Hasan Abedi, and his assistant, Swaleh Naqvi, in the middle – was an essential component of its spectacular growth, and a guarantee of its eventual collapse. The structure was conceived by Abedi and managed by Naqvi for the specific purpose of evading regulation or control by governments. It functioned to frustrate the full understanding of BCCI’s operations by anyone. Unlike any ordinary bank, BCCI was from its earliest days made up of multiplying layers of entities, related to one another through an impenetrable series of holding companies, affiliates, subsidiaries, banks-within-banks, insider dealings and nominee relationships. By fracturing corporate structure, record keeping, regulatory review, and audits, the complex BCCI family of entities created by Abedi was able to evade ordinary legal restrictions on the movement of capital and goods as a matter of daily practice and routine. In creating BCCI as a vehicle fundamentally free of government control, Abedi developed in BCCI an ideal mechanism for facilitating illicit activity by others, including such activity by officials of many of the governments whose laws BCCI was breaking.[…]
Among BCCI’s principal mechanisms for committing crimes were shell corporations, bank confidentiality and secrecy havens, layering of corporate structure, front-men and nominees, back-to-back financial documentation among BCCI controlled entities, kick-backs and bribes, intimidation of witnesses, and retention of well-placed insiders to discourage governmental action.[…]
However daunting the task of explicating the full extent of BCCI’s criminality, it is essential to recognize that at core, BCCI was not a bank which made an adequate return on investment through lending out depositors’ funds like other banks, but a “Ponzi scheme,” which used new depositors’ funds to pay current expenses and to repay earlier depositors, creating a pyramid of mounting obligations that ultimately and inevitably would bring about BCCI’s collapse.[…]
From the beginning, BCCI President Abedi conceived of BCCI as a machine with two driving mechanisms – asset growth and faith. The latter was essential to prevent a day of reckoning when depositors and creditors alike would cause a run on the bank. The former was necessary to sustain the latter through bad times. Together, they worked to sustain the illusion that BCCI was solvent, when in fact, it is unlikely BCCI was ever solvent.
On 18 December 1991, in an agreement with the Justice Department and New York District Attorney, BCCI’s liquidators pleaded guilty to having engaged in a criminal conspiracy through financial fraud, and thereby constituting a Racketeering Influenced and Corrupt Organization (RICO), whose entire assets, legitimate and illegitimate, were subject to confiscation by the government. Specific crimes admitted to by BCCI’s liquidators in the agreement included:Seeking deposits of drug proceeds and laundering drug money Seeking deposits from persons attempt to evade US income taxesUsing “straws” and nominees to acquire control of US financial institutionsLying to regulators and falsifying regulatory documentsCreating false bank records and engaging in sham transactions to deceive regulators.[…]
The New York District Attorney found that among the major actions taken by BCCI to carry out its fraud were:Employing the ruling families of a number of Middle Eastern states as nominees for BCCI, who pretended to be at risk in BCCI but who were in fact guaranteed to be held harmless by BCCI for any actual losses.Using bank secrecy havens including Luxembourg and the Cayman Islands to avoid regulation on a consolidated basis by any single regulator of BCCI, and thereby to permit BCCI to transfer assets and liabilities from bank to bank as needed to conceal BCCI’s true economic status.Paying bribes and kickbacks to agents of other banking and financial institutions, thereby avoiding the scrutiny of regulators.[…]
Money-Laundering
From the time of BCCI’s indictment on drug money-laundering charges in Tampa, Florida in October, 1988, there was little doubt to anyone looking at the facts that BCCI had been used to launder drug money.The Customs agents working on the “C-Chase” case against BCCI moved millions of dollars in US currency, representing the proceeds of cocaine sales, through BCCI Panama, BCCI Luxembourg, and LOANS Switzerland as a result of the knowing participation of several BCCI officials.As Robert Mazur, the Customs agent in Tampa who selected BCCI as the target of the Customs money-laundering sting testified, BCCI bank executives volunteered methods to enhance and improve his techniques for money-laundering, and shortly before the sting ended the operation, offered to introduce Mazur to other potential “cash” customers for money-laundering services from Bogota, Colombia.[…]
Given BCCI’s size and dispersion, money-laundering at BCCI would have been inevitable under any circumstances. Given BCCI’s never ending quest for assets and its management’s attitude towards laws, it was ubiquitous. As Akbar Bilgrami explained, Abedi was constantly telling BCCI employees that the only thing that mattered was the generation of assets. When Bilgrami was in Colombia in the mid-1980s [sic], a period when Colombia had already developed the reputation as the center for cocaine smuggling and drug money, Abedi told him that he needed to increase BCCI’s activity in Colombia to $1 billion in local currency in deposits, and $1 billion in US denominated deposits – funds which obviously could only be generated, directly or indirectly, from the drug trade.[…]
The degree of BCCI-US’s reliance on money-laundering as a principal business was demonstrated by what happened when BCCI put into place a “compliance program” as part of its January 1990 plea agreement resolving the Tampa money-laundering case: business dropped noticeably, especially referrals from other BCCI locations, because neither BCCI nor its customers wanted to provide details about the customers’ businesses.BCCI’s clients for money-laundering included Panamanian General Manuel Noriega, for whom it managed some $23 million of criminal proceeds out of its London branches; Pablo Escobar, of the Medellin cartel; Rodriguez Gacha, of the Medellin cartel; and several members of the Ochoa family.
Bribery
Bribery was a key component of BCCI’s strategy for asset growth worldwide, from the earliest days of the bank. In some cases, the recipients of funding from BCCI may not have considered the payments to be “bribes,” but simply a mechanism by which BCCI obtained what it wanted from an official, and in return the official helped BCCI, such as BCCI’s payments to two of the Gulf emirs in return for the use of their names as nominees for the purchase of First American. In other cases, the bribes were naked and direct quid pro quos, such as BCCI’s payments to Central Bank officials in return for Central Bank deposits in countries like Peru. In other cases, BCCI made campaign contributions to politicians, such as it did with General Zia in Pakistan and Carlos Andres Perez in Venezuela. In still other cases, BCCI’s payments came in the guise of charitable contributions, and provided BCCI with an entree to generate deposits from others, as in the case of President Jimmy Carter. Among the Americans who BCCI provided with financial assistance in addition to Carter were US Ambassador to the United Nations Andrew Young, Bert Lance, and Jesse Jackson. Abroad, important figures with extensive contact with BCCI included former British Prime Minister James Callaghan, then United Nations Secretary General Javier Perez de Cuellar, Jamaican prime minister Edward Seaga, Antiguan prime minister Lester Byrd; a large number of African heads of state; and many Third World central bank officials.[…]
Support of Terrorism and Arms TraffickingBCCI’s support of terrorism and arms trafficking developed out of several factors. First, as a principal financial institution for a number of Gulf sheikhdoms, with branches all over the world, it was a logical choice for terrorist organizations, who received payment at BCCI-London and other branches directly from Gulf-state patrons, and then transferred those funds wherever they wished without apparent scrutiny. Secondly, BCCI’s flexibility regarding the falsification of documentation was helpful for such activities. Finally, to the extent that pragmatic considerations were not sufficient of themselves to recommend BCCI, the bank’s pan-third world and pro-Islam ideology would have recommended it to Arab terrorist groups.
Arms trafficking involving BCCI included the financing of Pakistan’s procurement of nuclear weapons through BCCI Canada, as documented in the Parvez case, involving a Pakistani who attempted to procure nuclear-related materials financed by BCCI through the United States.In a letter of 22 November 1991 to the Subcommittee, the CIA stated that “the Agency did have some reporting [as of 1987] on BCCI being used by third world regimes to acquire weapons and transfer technology,” but was unwilling to elaborate on the nature of this activity in public.In early August, 1991, the Committee was provided with documents from the Latin American and Caribbean Region Office (LACRO) of BCCI, describing the offer for sale by the Argentine air force of 22 Mirage aircraft for $110 million. The planned sale was to have been made to Iraq, as part of Saddam Hussein’s massive military build up prior to the Gulf war. BCCI was acting as the broker for the transaction, which was to take place in August or September of 1989, but not completed as a result of a dispute within the Argentine military itself. Arms sales involving BCCI from Latin America to the Middle East remain, as of April 1992, under active investigation by US law enforcement.Abu NidalIn the United Kingdom, a key window on BCCI’s support of terrorism was an informant named Ghassan Qassem, the former manager of the Sloan [sic] Street branch of BCCI in London. Qassem had been given the accounts of Palestinian terrorist Abu Nidal at BCCI, and then proceeded, while at BCCI, to provide detailed information on the accounts to British and American intelligence, apparently as a paid informant, according to press accounts based on interviews with Qassem.As of 1986, the information obtained about Abu Nidal’s use of BCCI was sufficiently detailed as to justify dissemination within the US intelligence community.[…]
Other terrorist groups continued to make use of BCCI, including one “state sponsor of terrorism,” and the Qassar brothers, Manzur and Ghassan, who have been associated with terrorism, arms trafficking, and narcotics trafficking in connection with the Government of Syria, and with the provision of East Bloc arms to the Nicaraguan contras in a transaction with the North/Secord enterprise paid for with funds from the secret US arms sales to Iran.[…]
Prostitution
BCCI’s involvement in prostitution arose out of its creation of its special protocol department in Pakistan to service the personal requirements of the Al-Nahyan family of Abu Dhabi, and on an as-needed basis, other BCCI VIPs, including the families of other Middle Eastern rulers. Several BCCI officers described the protocol department’s handling of prostitution to Senate investigators in private, and two – Abdur Sakhia and Nazir Chinoy – confirmed their general knowledge of the practice in testimony. The prostitution handled by BCCI was carried over from practices originally instituted by Abedi at the United Bank, when, working with a woman, Begum Asghari Rahim, he cemented his relationship with the Al-Nahyan family through providing them with Pakistani prostitutes.
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