The Bank of Credit and Commerce International (BCCI) was an international bank founded in 1972 by Agha Hasan Abedi, a Pakistani financier.
The relationships involving BCCI, the CIA, and members of the United States and foreign intelligence communities have been among the most perplexing aspects of understanding the rise and fall of BCCI. The CIA’s and BCCI’s mutual environments of secrecy have been one obvious obstacle. For many months, the CIA resisted providing information to the Subcommittee about its involvement with and knowledge of BCCI. Moreover, key players who might explain these relationships are unavailable. Some, including former CIA director William Casey, and BCCI customers and Iranian arms dealers Ben Banerjee and Cyrus Hashemi, are dead. Others, including most of BCCI’s key insiders, remain held incommunicado in Abu Dhabi. While promising in public hearings to provide full cooperation to the Subcommittee, to date the Abu Dhabi government has refused to make any BCCI officers available for interview by the Subcommittee. Former BCCI chairman Agha Hasan Abedi remains severely incapacitated due to a heart attack. Finally, some persons in a position to know portions of the truth have denied having any memory of events in which they participated and of documents which they reviewed.
A baseline for assessing the BCCI-CIA story is the CIA’s official record of its use of BCCI and its targeting of the bank, as set forth in several hundred CIA records created from 1982 through 1992. That record was, by and large, accurately represented by CIA acting director Richard Kerr in public testimony on October 25, 1991, supplemented by more detailed, classified testimony on October 31, 1991. Unfortunately, that record also contains ostensible gaps in knowledge on the part of the CIA about the activities of key contacts in the Middle East for U.S. intelligence — including BCCI shareholders Kamal Adham and Abdul Raouf Khalil, and BCCI customer and Iran/Contra arms merchant Adnan Khashoggi — which strain belief.
Outside the documentary record provided to the Subcommittee by the CIA, there is additional material, consisting of BCCI documents, testimony from BCCI officials and insiders, and extrinsic, circumstantial and historic information describing other substantial contacts between BCCI and the intelligence community. These include contacts between BCCI and:
** former U.S. intelligence officials, including a former head of the CIA;
** former and current foreign intelligence officials; and
** individuals engaged in covert operations on behalf of the United States government, including in the Iran/Contra affair.
In addition, the Subcommittee has received allegations of meetings between former CIA director William Casey and BCCI’s head, Agha Hasan Abedi.
CIA officials have told the Subcommittee that the CIA as an institution has rules requiring the creation of written records on every activity engaged in by the Agency, and on all significant information reported to the Agency. In the summer of 1991, the CIA engaged in what its officials described as a “dumb” or “brute force” review of its documents, essentially reviewing all possible files for information on BCCI, rather than relying on knowledgeable individuals to select such information. The review located a substantial amount of material generated by the CIA throughout the 1980’s, which was produced in July and August, 1991 for CIA internal reviews, in September and October for the Congressional intelligence oversight committees, and beginning in March, 1992, to the Subcommittee.
Unfortunately, there remains a wide disparity between the CIA’s official account of critical relationships between BCCI and persons associated with the CIA, and the information available from other sources, including BCCI’s own records. One is left with the choice of accepting the official record, which requires an assessment that the other contacts between BCCI and U.S. intelligence figures and operations are coincidental, or of assuming that the full story of BCCI’s relationship to the United States has been intentionally veiled by critical players on both sides of that relationship.
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The Bank of Credit and Commerce International (BCCI) was an international bank founded in 1972 by Agha Hasan Abedi, a Pakistani financier. The Bank was registered in Luxembourg with head offices in Karachi and London. A decade after opening, BCCI had over 400 branches in 78 countries, and assets in excess of US$20 billion, making it the 7th largest private bank in the world.
BCCI came under the scrutiny of numerous financial regulators and intelligence agencies in the 1980s due to concerns that it was poorly regulated. Subsequent investigations revealed that it was involved in massive money laundering and other financial crimes, and illegally gained the controlling interest in a major American bank. BCCI became the focus of a massive regulatory battle in 1991, and, on 5 July of that year, customs and bank regulators in seven countries raided and locked down records of its branch offices.
Investigators in the US and the UK revealed that BCCI had been “set up deliberately to avoid centralized regulatory review, and operated extensively in bank secrecy jurisdictions. Its affairs were extraordinarily complex. Its officers were sophisticated international bankers whose apparent objective was to keep their affairs secret, to commit fraud on a massive scale, and to avoid detection.”
The liquidators, Deloitte & Touche, filed a lawsuit against the bank’s auditors, Price Waterhouse and Ernst & Young, which was settled for $175 million in 1998. By 2013, Deloitte & Touche claimed to have recovered about 75% of the creditors’ lost money.
Double Standards – BCCI – The Untold Story – By Mubashir Malik (published March 2016)
The British government set up an independent inquiry, chaired by Lord Justice Bingham, in 1992. Its House of Commons Paper, Inquiry into the Supervision of the Bank of Credit and Commerce International, was published in October of that year. Following the report, BCCI liquidators Deloitte Touche filed suit against the Bank of England for £850m, claiming that the Bank was guilty of misfeasance in public office. The suit lasted 12 years. It ended in November 2005, when Deloitte withdrew its claims after England’s High Court ruled that it was “no longer in the best interests of creditors” for the litigation to continue. Deloitte eventually paid the Bank of England £73m for its legal costs. According to news reports at the time, it was the most expensive case in British legal history.
The BCCI Affair, Report to the Committee on Foreign Relations States Senate; held at FAS -(A Report to the Committee on Foreign Relations United States Senate by Senator John Kerry and Senator Hank Brown; December 1992; 102d Congress 2d Session Senate Print 102-140)
Context of ‘July 22, 1991: Iran-Contra Related to BCCI Scandal’
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1976: CIA and Other Intelligence Agencies Use BCCI to Control and Manipulate Criminals and Terrorists Worldwide
1978-1982: Criminal BCCI Secretly Buys CIA’s Main US Bank; Even as CIA Uses Bank for Covert Operations
1981-1991: CIA Uses BCCI Bank to Pay 500 British Informants
1984-1986: CIA Reveals BCCI’s Drug and Terrorist Links to Other US Agencies, but No Action Taken
January 1985: Treasury Secretary Regan Reads ‘Dynamite’ CIA Report on BCCI Crimes, But Takes No Action
December 6, 1985: North: Arms Profits Will Go to Fund Contras
December 12, 1985: Plane Crash in Canada Kills 256; Evidence Suggests Links to Iran-Contra and BCCI Covert Operations
Wreckage from the Gander crash. [Source: Canadian Broadcasting Corporation]
Early 1986: NSC Uses BCCI to Illegally Divert US Government Funds to Contras
April 4, 1986: North Diverts $12 Million in Iran Arms Sales Profits to Contras
December 19, 1986: Congress Announces Iran-Contra Investigative Committee; Democrats Are Determined to Avoid Impeaching Reagan
February 1988-December 1992: Justice Department Blocks Investigations into BCCI
US Justice Department headquarters. [Source: GlobeXplorer]
March 1991-December 1992: CIA Hides Its Relationship to Criminal BCCI
July 5, 1991: Criminal BCCI Bank Is Shut Down
July 22, 1991: Iran-Contra Related to BCCI Scandal
A Time magazine cover story on BCCI. [Source: Time Magazine]