There have been a number of matters which the Subcommittee has received some
information on, but has not been able to investigate adequately, due such
factors as lack of resources, lack of time, documents being withheld by foreign
governments, and limited evidentiary sources or witnesses. Some of the main
areas which deserve further investigation include: 1. The extent of BCCI's involvement in Pakistan's nuclear program. As set
forth in the chapter on BCCI in foreign countries, there is good reason to
conclude that BCCI did finance Pakistan's nuclear program through the BCCI
Foundation in Pakistan, as well as through BCCI-Canada in the Parvez case.
However, details on BCCI's involvement remain unavailable. Further investigation
is needed to understand the extent to which BCCI and Pakistan were able to evade
U.S. and international nuclear non-proliferation regimes to acquire nuclear
technologies. 2. BCCI's manipulation of commodities and securities markets in Europe and
Canada. The Subcommittee has received information that remains not fully
substantiated that BCCI defrauded investors, as well as some major U.S. and
European financial firms, through manipulating commodities and securities
markets, especially in Canada, the Netherlands, and Luxembourg. This alleged
fraud requires further investigation in those countries. 3. BCCI's activities in India, including its relationship with the business
empire of the Hinduja family. The Subcommittee has not had access to BCCI
records regarding India. The substantial lending by BCCI to the Indian
industrialist family, the Hindujas, reported in press accounts, deserves further
scrutiny, as do the press reports concerning alleged kick-backs and bribes to
Indian officials. 4. BCCI's relationships with convicted Iraqi arms dealer Sarkis Soghanalian,
Syrian drug trafficker, terrorist, and arms trafficker Monzer Al-Kassar, and
other major arms dealers. Sarkenalian was a principal seller of arms to Iraq.
Monzer Al-Kassar has been implicated in terrorist bombings in connection with
terrorist organizations such as the Popular Front for the Liberation of
Palestine. Other arms dealers, including some who provided machine guns and
trained Medellin cartel death squads, also used BCCI. Tracing their assets
through the bank would likely lead to important information concerning
international terrorist and arms trafficker networks. 5. The use of BCCI by central figures in arms sales to Iran during the
1980's. The late Cyrus Hashemi, a key figure in allegations concerning an
alleged deal involving the return of U.S. hostages from Iran in 1980, banked at
BCCI London. His records have been withheld from disclosure to the Subcommittee
by a British judge. Their release might aid in reaching judgments concerning
Hashemi's activities in 1980, with the CIA under President Carter and allegedly
with William Casey. 6. BCCI's activities with the Central Bank of Syria and with the Foreign
Trade Mission of the Soviet Union in London. BCCI was used by both the Syrian
and Soviet governments in the period in which each was involved in supporting
activities hostile to the United States. Obtaining the records of those
financial transactions would be critical to understanding what the Soviet Union
under Brezhnev, Chernenko, and Andropov was doing in the West; and might
document the nature and extent of Syria's support for international terrorism.
7. BCCI's involvement with foreign intelligence agencies. A British source
has told the Bank of England and British investigators that BCCI was used by
numerous foreign intelligence agencies in the United Kingdom. The British
intelligence service, the MI-5, has sealed documents from BCCI's records in the
UK which could shed light on this allegation. 8. The financial dealings of BCCI directors with Charles Keating and several
Keating affiliates and front-companies, including the possibility that BCCI
related entities may have laundered funds for Keating to move them outside the
United States. The Subcommittee found numerous connections among Keating and
BCCI-related persons and entities, such as BCCI director Alfred Hartman;
CenTrust chief David Paul and CenTrust itself; Capcom front-man Lawrence
Romrell; BCCI shipping affiliate, the Gokal group and the Gokal family; and
possibly Ghaith Pharaon. The ties between BCCI and Keating's financial empire
require further investigation. 9. BCCI's financing of commodities and other business dealings of
international criminal financier Marc Rich. Marc Rich remains the most important
figure in the international commodities markets, and remains a fugitive from the
United States following his indictment on securities fraud. BCCI lending to Rich
in the 1980's amounted to tens of millions of dollars. Moreover, Rich's
commodities firms were used by BCCI in connection with BCCI's involving in U.S.
guarantee programs through the Department of Agriculture. The nature and extent
of Rich's relationship with BCCI requires further investigation. 10. The nature, extent and meaning of the ownership of shares of other U.S.
financial institutions by Middle Eastern political figures. Political figures
and members of the ruling family of various Middle Eastern countries have very
substantial investments in the United States, in some cases, owning substantial
shares of major U.S. banks. Given BCCI's routine use of nominees from the Middle
East, and the pervasive practice of using nominees within the Middle East,
further investigation may be warranted of Middle Eastern ownership of domestic
U.S. financial institutions. 11. The nature, extent, and meaning of real estate and financial investments
in the United States by major shareholders of BCCI. BCCI's shareholders and
front-men have made substantial investments in real estate throughout the United
States, owning major office buildings in such key cities as New York and
Washington, D.C. Given BCCI's pervasiveness criminality, and the role of these
shareholders and front-men in the BCCI affair, a complete review of their
holdings in the United States is warranted. 12. BCCI's collusion in Savings & Loan fraud in the U.S. The Subcommittee
found ties between BCCI and two failed Savings and Loan institutions, CenTrust,
which BCCI came to have a controlling interest in, and Caprock Savings and Loan
in Texas, and as noted above, the involvement of BCCI figures with Charles
Keating and his business empire. In each case, BCCI's involvement cost the U. S.
taxpayers money. A comprehensive review of BCCI's account holders in the U.S.
and globally might well reveal additional such cases. In addition, the issue of
whether David Paul and CenTrust's political relationships were used by Paul on
behalf of BCCI merits further investigation. 13. The sale of BCCI affiliate Banque de Commerce et de Placements (BCP) in Geneva, to the Cukorova Group of Turkey, which owned an entity involved in the BNL Iraqi arms sales, among others. Given BNL's links to BCCI, and Cukorova Groups' involvement through its subsidiary, Entrade, with BNL in the sales to Iraq, the swift sale of BCP to Cukorova just weeks after BCCI's closure -- prior to due diligence being conducted -- raises questions as to whether a prior relationship existed between BCCI and Cukorova, and Cukorova's intentions in making the purchase. Within the past year, Cukorova also applied to purchase a New York bank. Cukorova's actions pertaining to BCP require further investigation in Switzerland by Swiss authorities, and by the Federal Reserve New York. 14. BCCI's role in China. As noted in the chapter on BCCI's activities in
foreign countries, BCCI had extensive activity in China, and the Chinese
government allegedly lost $500 million when BCCI closed, mostly from government
accounts. While there have been allegations that bribes and pay-offs were
involved, these allegations require further investigation and detail to
determine what actually happened, and who was involved. 15. The relationship between Capcom and BCCI, between Capcom and the
intelligence community, and between Capcom's shareholders and U.S.
telecommunications industry figures. The Subcommittee was able to interview
people and review documents concerning Capcom that no other investigators had to
date interviewed or reviewed. Much more needs to be done to understand what
Capcom was doing in the United States, the United Kingdom, Egypt, Oman, and the
Middle East, including whether the firm was, as has been alleged but not proven,
used by the intelligence community to move funds for intelligence operations;
and whether any person involved with Capcom was seeking secretly to acquire
interests in the U.S. telecommunications industry. 16. The relationship of important BCCI figures and important intelligence
figures to the collapse of the Hong Kong Deposit and Guaranty Bank and Tetra
Finance (HK) in 1983. The circumstances surrounding the collpase of these two
Hong Kong banks; the Hong Kong banks' practices of using nominees,
front-companies, and back-to-back financial transactions; the Hong Banks'
directors having included several important BCCI figures, including Ghanim Al
Mazrui, and a close associate of then CIA director William Casey; all raise the
question of whether there was a relationship between these two institutions and
BCCI-Hong Kong, and whether the two Hong Kong institutions were used for
domestic or foreign intelligence operations. 17. BCCI's activities in Atlanta and its acquisition of the National Bank of
Georgia through First American. Although the Justice Department indictments of
Clark Clifford and Robert Altman cover portions of how BCCI acquired National
Bank of Georgia, other important allegations regarding the possible involvement
of political figures in Georgia in BCCI's activities there remain outside the
indictment. These allegations, as well as the underlying facts regarding BCCI's
activities in Georgia, require further investigation. 18. The relationship between BCCI and the Banca Nazionale del Lavoro. BCCI
and the Atlanta Branch of BNL had an extensive relationship in the United
States, with the Atlanta Branch of BNL having a substantial number of accounts
in BCCI's Miami offices. BNL was, according to federal indictments, a
significant financial conduit for weapons to Iraq. BCCI also made loans to Iraq,
although of a substantially smaller nature. Given the criminality of both
institutions, and their interlocking activities, further investigation of the
relationship could produce further understanding of Saddam Hussein's
international network for acquiring weapons, and how Iraq evaded governmental
restrictions on such weapons acquisitions. 19. The alleged relationship between the late CIA director William Casey and
BCCI. As set forth in the chapter on intelligence, numerous trails lead from
BCCI to Casey, and from Casey to BCCI, and the investigation has been unable to
follow any of them to the end to determine whether there was indeed a
relationship, and if there was, its nature and extent. If any such relationship
existed, it could have a significant impact on the findings and conclusions
concerning the CIA and BCCI's role in U.S. foreign policy and intelligence
operations during the Casey era. The investigation's work detailing the ties of
BCCI to the intelligence community generally also remains far from complete, and
much about these ties remains obscure and in need of further investigation.
20. Money laundering by other major international banks. Numerous BCCI
officials told the Subcommittee that BCCI's money laundering was no different
from activities they observed at other international banks, and provided the
names of a number of prominent U.S. and European banks which they alleged
engaged in money laundering. There is no question that BCCI's laundering of drug
money, while pervading the institution, constituted a small component of the
total money laundering taking place in international banking. Further
investigation to determine which international banks are soliciting and handling
drug money should be undertaken. WITNESSES(All witnesses testified in public session or in published depositions
printed by the Subcommittee, except witnesses with *, who testified at hearing
conducted within Subcommittee on Consumer and Regulatory Affairs of Senate
Committee on Banking, Housing and Urban Affairs in coordination with this
investigation, May 23, 1991.) Robert A. Altman, former president, First American Bankshares and attorney
for BCCI. Fausto Alvarado, Member, Peruvian House of Deputies. Fernando Ramon Marin Amaya. Investigator retained by Attorney General of
Guatemala to investigate BCCI's activities in Guatemala. Amjad Awan, federal prisoner, former BCCI official who handled accounts of
Panamanian General Manuel Noriega. Sidney Bailey, Virginia Commissioner of Financial Institutions, Richmond,
Virginia.* Robert R. Bench, Partner, Price Waterhouse, Former Deputy Comptroller for
International Relations and Financial Evaluation. Gerald Beyer, Executive Vice President, Chicago Merchantile Exchange.
Akbar Bilgrami, federal prisoner, former head of Latin American and Caribbean
Regional Office, BCCI, Miami. Jack Blum. A private attorney at the firm of Novins, Lamont & Flug. Formerly
special counsel to the Foreign Relations Committee for the investigation of the
Subcommittee on Narcotics, Terrorism, and International Operations into Drugs,
Law Enforcement, and Foreign Policy, 1987-1988. Parker W. Borg. Deputy Assistant Secretary of the Bureau of International
Narcotics Matters at the Department of State. James Bruton, Acting Assistant Attorney General, Tax Divisin, Department of
Justice. A. Peter Burleigh, Coordinator for Counter-Terrorism at the Department of
State. Jorge Del Castillo, Member, Peruvian House of Delegates. Pedro Cateriano, Member, Peruvian House of Deputies. Nazir Chinoy, federal prisoner, former General Manager, BCCI Paris.
Clark M. Clifford, formerly, chairman of First American Bankshares and
attorney for BCCI. Andrea Cocoran, Director of Planning and Compliance, Commodities Futures
Trading Commission. Michael Crystal, Queen's Counsel, representing English court-appointed
liquidators of BCCI. George Davis, President and CEO, First American Bankshares, Washington, D.C.
James F. Dougherty, Attorney, Miami Florida. Representing Lloyds of London in
litigation concerning alleged fraud involving BCCI. Scott M. Early, General Counsel, Chicago Board of Trade. Lourdes Flores, Member, Peruvian House of Deputies. Robert Genzman, U.S. Attorney for the Middle District of Florida.
Wendy Gramm, Commissioner, Commodities Futures Trading Commission.
John Heimann, former New York State Bank Supervisor and Comptroller of the
Currency.* Mark Jackowski, Assistant U.S. Attorney for the Middle District of Florida.
Nicholas de B. Katzenbach, Chairman, First American Bankshares, Washington,
D.C. Gregory Kehoe, First Assistant U.S. Attorney, Criminal Division, for the
Middle District of Florida. Richard Kerr, Acting Director, Central Intelligence Agency. Alan J. Kreczko. Deputy Legal Advisor at the U.S. Department of State. T. Bertram Lance, Former Director of the Office of Management and Budget.
Dexter Lehtinen, Former U.S. Attorney, Southern District of Miami, Florida.
Richard A. Lehrman, Esq., attorney, Miami, Florida. Represented Lloyds of
London in case involving BCCI commmodities fraud. Ricardo Llaque, Deputy Director of Exchange Operations, Federal Reserve Bank
of Peru. Paul Maloney, Deputy Assistant Attorney General for Criminal Division, U.S.
Department of Justice, Washington, D.C.* Virgil Mattingly, General Counsel, Board of Governors, Federal Reserve
System. Robert Mazur, Undercover Agent for Operation C-Chase, Drug Enforcement
Administration. Douglas P. Mulholland, Assistant Secretary for Intelligence and Research,
Department of State. Robert Morgenthau, District Attorney, County of New York, New York.*
Robert S. Mueller, III, Assistant Attorney General, Department of Justice,
Washington, D.C. Fernando Olivera, Member, Peruvian House of Deputies. Laurence Pope, Associate Coordinator for Counter-Terrorism, Department of
State. William Von Raab. An attorney at the firm of William H. Bode Associates.
Formerly Commissioner of the United States Customs Service, 1985-1989, oversaw
Customs' handling of the sting operation that targeted BCCI, Operation C-Chase.
Masihur Rahman, Former Chief Financial Officer, BCCI London. Mark Richard, Deputy Assistant Attorney General, Criminal Division,
Department of Justice. Edward M. Rogers, Jr., former White House aide. Jesus Rodriguez, Member, Chamber of Deputies, Argentina. Abdur Sakhia, former head, BCCI Miami. Ahmed Al Sayegh, Director, Abu Dhabi National Oil Company. Raul Alconada Sempe, former Secretary of Defense and former Secretary for
Special Projects, Foreign Ministry, Argentina. Grant Smith, Deputy Assistant Secretary, International Narcotics Matters,
Department of State. Brian Smouha, Court Appointed Fiduciary for BCCI Holdings (Luxembourg) SA and
Bank of Credit and Commerce International, S.A., London, England. John W. Stone, Chief of Enforcement, Federal Deposit Insurance Corporation.
William Taylor, Staff Director, Division of Banking Supervision and
Regulation, Federal Reserve, Washington, D.C. WRITS AND SUBPOENAS AUTHORIZED DURING INVESTIGATIONWRITS AUTHORIZED (4)Amjad Awan Akbar Bilgrami Nazir Chinoy Ian Howard SUBPOENAS AUTHORIZED (17)Sani Ahmed BCCI Roy Carlson Kerry Fox Grand Hotel, Washington DC Abol Helmy Kissinger Associates Office of the Comptroller of the Currency Price Waterhouse (US) Price Waterhouse (UK) First American First American Georgia Robert Magness David Paul Robert Powell Ed Rogers Larry Romrell
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