Bank of Credit and Commerce International
The Bank of Credit and Commerce International ( BCCI ) was a major international bank founded in 1972 by the Pakistani Agha Hasan Abedi . It was registered in Luxembourg and had headquarters in London and Karachi. At the height of its history, the Institute operated in 78 countries, had more than 400 branches and had deposits amounting to about 25 billion US dollars . In 1991, the BCCI came to the fore in the largest international financial scandal to date, which was described as "The greatest fraud in human history" and the "Over 20 billion robbery".
In the course of their investigations, US and UK investigative agencies found that the financial institution was involved in money laundering , bribery , arms trafficking and the sale of nuclear technology , aiding terrorism , initiating and promoting tax evasion , smuggling , illegal immigration and buying property and banks as well as the promotion of prostitution . An investigation led by the then US Senator John Kerry came to the clear conclusion that the former Panamanian dictator Manuel Noriega , among others , used the bank to launder drug money from the Medellín cartel . After the institute collapsed, investigators found the bank was worthless and more than $ 13 billion had disappeared without a trace.
Investigators revealed that “the BCCI had already been established with the aim of avoiding targeted centralized regulatory reviews and making extensive use of the statutory provisions on banking secrecy . The bank's operations are extraordinarily complex. The bank's employees were highly qualified international financial experts with the obvious aim of keeping their business activities secret, of committing fraud on an extraordinary scale and avoiding detection ”. The BCCI maintained its own intelligence and diplomatic structures as well as freight forwarding and trading companies .
The as bankruptcy trustee companies used Deloitte & Touche initiated proceedings against the two with the revision of the Institute commissioned audit and consulting firms Price Waterhouse and Ernst & Young , was set in 1998 for a payment of 175 million US dollars. In 1999, another lawsuit was filed for around US $ 400 million against the Emir of Abu Dhabi, Zayid bin Sultan Al Nahyan , who was the bank's major shareholder. Creditors of the institute also filed a $ 1 billion lawsuit against the Bank of England for its role as the licensing authority as a result of the bankruptcy . In January 2004, the process opened after a nine-year dispute over the British Institute's legal immunity; In November 2005, following a decision by the London High Court , the bankruptcy trustee Deloitte & Touche suspended all action against the British institution because it no longer considered it to be in the interests of the creditors. The costs of the proceedings on both sides exceeded £ 100 million .
history
The BCCI was founded in 1972 by Agha Hasan Abedi from India in Pakistan . Abedi had founded United Bank Ltd (UBL) as United Bank of Pakistan in 1959 and decided to create a new international bank after the nationalization of this institute in 1971.
The capital for the establishment of the new institute came from Sheikh Zayed bin Sultan Al Nahayan , Emir of Abu Dhabi in the United Arab Emirates , and Bank of America (25%). Several authors assume that the CIA was also heavily involved financially in founding the bank. The American intelligence service needed a funding channel to support the Afghan mujahedin groups similar to the Investors Overseas Service and the Nugan Hand Bank . The majority of BCCI's founding capital came from Abu Dhabi.
In the 1970s, the BCCI grew very quickly and put the growth of the deposit amount in the foreground over profit, it aimed in particular at people with high equity and the creation of high regular bank balances. In the course of its rapid growth, the company increasingly differentiated itself into a group of companies, so the bank split into BCCI S.A. ( Luxembourg ) and BCCI Overseas ( Grand Cayman ) as part of BCCI Holdings .
At the same time, the BCCI acquired other banks, for example the Banque de Commerce et Placements (BCP) ( Geneva ) in 1976 , and founded the KIFCO ( Kuwait International Finance Company), the Credit & Finance Corporation Ltd , and a number of companies based on the Cayman - Islands operating under the name ICIC ( International Credit and Investment Company Overseas , International Credit and Commerce Overseas , etc.). The institute grew rapidly. In 1973 the BCCI had 19 branches in five countries on deposits amounting to 200 million US dollars, in 1974 the bank operated 27 branches and in 1976 108 branches with a deposit sum of 1.6 billion US dollars.
The growth created significant financing problems. As early as 1977, the bank's financial predicament was so existentially threatening that the British newspaper The Guardian later stated that at this point in time the BCCI “was almost certainly already insolvent”. In order to be able to maintain business operations, the bank subsequently switched to covering its operating costs, similar to a pyramid scheme, from the deposits of its customers instead of investing them. Nevertheless, the BCCI continued its expansion course and entered the African financial market in 1979 and the Asian financial market in the early 1980s. It was one of the first foreign banks to obtain a banking license for the Shenzhen Special Economic Zone . Some of the major Chinese banks were deposit holders in the Shenzhen branch of the BCCI.
In 1980, BCCI had over $ 4 billion in deposits and 150 offices in 46 countries. The Bank of America more original than Abedis business partners in the US was dismayed by the business practices of the partner and reduced in 1980 its participation in the BCCI. As a result, the company shares were held by several other groups of companies, of which ICIC was the most important with a stake of 70 percent. In 1989 ICIC's stake was reduced to 11 percent, while Abu Dhabi corporate groups held almost 40 percent of the shares and BCCI front men held other significant shares.
In 1991, Time Magazine named the institute's most prominent customers in a comprehensive cover story, including the leader of the Contras Adolfo Calero , Daniel Noriega , Saddam Hussein , Daniel Ortega , Ferdinand Marcos , the Peruvian President Alan García and arms dealers such as Adnan Khashoggi .
The structural design of the financial institution was unusual. It was based on a strict isolation of the individual sections of the organizational structure. The bank had 248 managers and general managers , all of whom only had to report to two top executives , Abedi and CEO Swaleh Naqvi .
Well-known US defense attorney Francis Lee Bailey and Florida state attorney Richard Gerstein were directors of the CenTrust Federal Savings Bank , an unsuccessful offshoot of the BCCI.
The BCCI had an unusual annual audit system: Price Waterhouse was the responsible auditor for BCCI Overseas , while Ernst & Young audited BCCI and BCCI Holdings (London and Luxembourg) . Other companies like KIFCO and ICIC were not screened by either of the auditors. In October 1985 , after becoming aware of reports of financial losses by the BCCI in the commodity futures and financial markets, the Bank of England and the Luxembourg Central Bank (then IML ) instructed the bank to switch to a single auditor in the future . Price Waterhouse took on the role of sole auditor in 1987.
In 1988, in Tampa , Florida, the BCCI became involved in a drug money- based money laundering system called the C-Chase case . In this context, the BCCI has been referred to as the CIA's money laundering facility. The BCCI pleaded guilty in 1990 on the basis of the Respondeat Superior .
In 1990 a Price Waterhouse audit revealed an inexplicable loss of several hundred million dollars. After subsequent talks between the bank and Sheikh Zayed, the latter compensated for the losses and in return increased his stake in the company to 78 percent. As a result of this share increase, a large part of BCCI's company documents were moved to Abu Dhabi .
social commitment
The bank established the Third World Foundation in London, which distributed a regular publication called Third World Quarterly and was dedicated to promoting Urdu and its literature through the Urdu Markaz in London.
Abedi helped set up the BCCI Foundation (now the Infaq Foundation ) in Pakistan, which supports writers, scholars and artists. This foundation had offices in Delhi and Dhaka . The in Karachi resident Infaq Foundation has funds available, the amount of which is estimated at approximately 1.3 billion rupees (about 21.67 million US dollars). The Foundation's chairman from 1983 to 1995 was former President of Pakistan Ghulam Ishaq Khan . The Foundation is currently headed by Fakhruddin G Ibrahim .
Abedi also founded the BCCI FAST Foundation , which had set itself the goal of promoting technical education in computer science . The funds made available by this foundation enabled the establishment of universities in Islamabad , Lahore and Karachi .
The Sandstorm Report
In March 1991, the Bank of England commissioned the audit firm Price Waterhouse to investigate. On June 24, 1991, the auditors presented their results in the form of the Sandstorm Report , using the term “Sandstorm” as a cover name for the BCCI. The report found that the BCCI was deeply involved in "fraud and manipulation". The report is still largely kept under wraps by the UK authorities.
Support terrorism
The parts of the Sandstorm report that leaked into the hands of the Sunday Times provided information on how the Abu Nidal terrorist group , the Abu Nidal Organization (ANO), used the BCCI's Sloane Street branch as a business link. British domestic intelligence agency MI5 had recruited two sources from the financial institution's office to provide copies of all documents related to the terrorist's accounts. One of these sources was Syrian- born department head Ghassan Qassem, and the second was a young British employee. Qassem later told reporters that he had repeatedly shown Abu Nidal, who was using the name Shakir Farhan in this case, through several shops in London to help him buy a tie and cigars without realizing who it was. This revelation led to the headline in the London Evening Standard in 1991 : "I Took Abu Nidal Shopping".
Abu Nidal's liaison with the BCCI accounts was an Arab named Samir Najmeddin or Najmedeen living in Iraq . During the 1980s, the BCCI issued several million US dollars of letters of credit to Najmeddin, most of which were used in arms deals with Iraq. Qassem later swore in an affidavit that Najmeddin was frequently accompanied by an American, whom Qassem later identified as the financier Marc Rich . Rich was later charged with tax evasion and illegal business in a different context in the United States , fled the country, and finally received a controversial pardon from Bill Clinton on January 20, 2001 .
After Thomas Henry Bingham , Lord Chief Justice of England and Wales completed his public inquiry into the closure of the BCCI in October 1992, he wrote a classified 30-page appendix (mostly referred to as Appendix 8 ) in which he referred to the role of Intelligence services entered into these operations. The document shows that MI5 learned in 1987 that Abu Nidal was using a company called SAS Trade and Investment in Warsaw as a cover for ANO arms deals, the director of which was Baghdad-based Najmeddin. All SAS business was conducted through the BCCI branch on Sloane Street, including the purchase of various firearms , night vision devices and armored Mercedes-Benz vehicles equipped with camouflaged grenade launchers . The US dollar sales at these businesses were often in the tens of millions. They were funded by misleading letters of credit from the Sloane Street branch of BCCI.
The bank records prove ANO's arms deals with several countries in the Middle East and the GDR . These transactions were monitored by British intelligence services and the CIA from 1987 until the bank was closed in 1991, they were not stopped, and neither the ANO members concerned nor the suppliers were arrested.
Official closure of the institute
On July 5, 1991, the Bank of England closed the BCCI. Approximately one million investors were affected by this decision.
In 1992, US Senators John Kerry and Hank Brown submitted a joint report on the BCCI to the United States Senate Committee on Foreign Relations . The BCCI scandal was part of a series of crimes and disasters that resulted in the UK passing the Public Interest Disclosure Act 1998 .
The report found that former Secretary of Defense Clark Clifford and his business partner, businessman Robert A. Altman, had regular, close relationships with the bank from 1978 to 1991, after Jimmy Carter's close advisor Thomas Bertram Lance who made contact. Clifford and Altman testified to the committee that they had not seen any suspicious behavior by the BCCI. The US federal authorities first brought charges and brought up a lifelong ban on commercial banking activities. Due to the old age and the rapidly deteriorating health of Clifford, these measures were no longer implemented. Altman, however, was indicted by New York District Attorney Robert Morganthau. Although the lawsuit did not result in a prison sentence, Altman agreed to be banned from commercial banking for life and face prosecution by the Securities and Exchange Commission for violations .
Agha Hasan Abedi died in Pakistan in 1995 after all demands for his extradition were rejected by the local authorities.
Abbas Gokal received the harshest punishment for fraud in recent British history at 14 years' imprisonment, later extended to 17 years.
Swaleh Naqvi has been sentenced to long prison terms in both Abu Dhabi and the United States. In both countries, there were further convictions in the context of the investigation.
In 2002, Denis Robert and Ernest Backes , the former number three of Clearstream's clearing company , often referred to as the "bank of banks", found that the BCCI's activities, after its official closure, apparently, using the microfiches of Clearstream's illegal secret accounts, had been continued.
Former directors
- Chalid bin Mahfuz acted as director without portfolio. He held 20 percent of the institute's shares in his private ownership. Mahfuz has been tried on fraud by a New York State jury. The case was dropped after the defendant agreed to pay a sum of $ 225 million in lieu of possible fines.
- James R. Bath served as director of the BCCI. Bath was also jointly with George W. Bush a shareholder in Arbusto Energy , a petroleum company in which, in another context, he invested US $ 50,000 on behalf of Salim bin Laden and the Saudi Binladin Group . After the allegation repeatedly surfaced in media reports that Bath had been recruited to the CIA by George HW Bush in 1976 , this was explicitly denied by Bath in 1991 in an article published in Time Magazine.
- Alfred Hartmann (* 1923)
Others
The US artist Mark Lombardi , known for his graphic representation of conspiratorial webs of relationships , was to present his magnum opus, "BCCI" , in New York in March 2000 , in which he revealed the bank’s interconnections. However, the work was initially destroyed by a technical defect. Shortly afterwards he passed away.
See also
literature
- J. Beaty, SC Gwynne: The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI . Random House, 1993, ISBN 0-679-41384-7
- Nick Kochan, Bob Whittington: Bankrupt: The BCCI Fraud . London 1991
- James Ring Adams, Douglas Frantz: A Full Service Bank . London 1991
- Denis Robert, Ernest Backes: Révélations Arènes Editions, 2001, ISBN 2-912485-28-2
- Jean-Charles Brisard, Guillaume Dasquié, Ben Laden: La Vérité interdite . Gallimard, 2002, ISBN 2-07-042377-8 , pp. 166-168.
- "The BCCI Affair," Report to the Committee on Foreign Relations, United States Senate, Senator John Kerry and Senator Hank Brown, 1992, 102nd Congress 2nd Session Senate Print 102-140 (Rapport Kerry).
- Time Magazine, July 29, 1991, The world's sleaziest bank, online at Cover Story: The Dirtiest Bank of All
- Rachel Ehrenfeld, Evil Money. Encounters along the Money Trail, 1992, Harper Business, ISBN 0-88730-560-1 ).
- Peter Truell, Larry Gurwin, False Profits. The Inside Story of BCCI, the world's most corrupt financial Empire, 1992, Houghton, Mifflin Company, Boston, New York, ISBN 0-395-62339-1
- James Ring Adams and Douglas Frantz, A Full Service Bank. How BCCI stole billions around the world, Simon & Schuster Inc., New York ISBN 0-671-72911-X
- Jonathan Beaty & SC Gwynne, The Outlaw Bank. A wild ride into the secret heart of BCCI, 1993, Random House, New York, ISBN 0-679-41384-7
- Nick Kochan & Bob Whittington, bankrupt. The BCCI Fraud, 1991, Victor Gollancz Ltd., Londres, ISBN 0-575-05279-1
- John K. Cooley, Unholy Wars. Afghanistan, America and International Terrorism, 1999, Pluto Press, Londres, Sterling (Virginie), ISBN 0-7453-1328-0
Web links
- BCCI (In Liquidation) Homepage (English)
- 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)
- Washington Monthly report
- Erisk, June 2001, "Case study: Bank of Credit and Commerce International" ( Memento from February 11, 2006 in the Internet Archive )
- "Bank of Colombian Cocaine Industry": l'affaire BCCI, online at confidentiel.net (French)
Individual evidence
- ^ Dan Atkinson: Accountants in BCCI net , in The Guardian , January 8, 1999.
- ↑ "$ 20-billion-plus heist" cf. Beaty, J. & Gwynne, SC The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI. Random House, 1993
- ^ "Regardless of what might be shown in the missing material, the remainder is more than adequate to document BCCI's criminality, including fraud by BCCI and BCCI customers involving billions of dollars; money laundering in Europe, Africa, Asia, and the America; BCCI's bribery of officials in most of those locations; its support of terrorism, arms trafficking, and the sale of nuclear technologies; its management of prostitution; its commission and facilitation of income tax evasion, smuggling, and illegal immigration; its illicit purchases of banks and real estate; and a panoply of financial crimes limited only by the imagination of its officers and customers. " Chapter 4 by Kerry 1992
- ↑ David Sirota, Jonathan Baskin, Follow the Money How John Kerry busted the terrorists' favorite bank, September 2004, online at The Washington Monthly ( Memento of the original from September 11, 2004 in the Internet Archive ) Info: The archive link was automatically inserted and still Not checked. Please check the original and archive link according to the instructions and then remove this notice.
- ↑ Quotation: “ BCCI was not an ordinary bank. It was set up deliberately to avoid centralized regulatory review, and operated extensively in bank secrecy jurisdictions. Its affairs are extraordinarily complex. Its offers were sophisticated international bankers whose apparent objective was to keep their affairs secret, to commit fraud on a massive scale, and to avoid detection. " Chapter 4 of Kerry 1992
- ↑ Three Rivers vs. Bank of England The BCCI creditors sought £ 850m in damages, claiming that the Bank of England was guilty of misfeance in public office.
- ↑ BBC News Article
- ^ Dan Atkinson, in The Guardian , Jan. 8, 1999, "Online under Accountants in BCCI net "
- ^ Quote "Unfortunately, the relationship with Bank of America had become an obstacle to such a move for BCCI. Rather than see BCCI expand into its home base, Bank of America was increasingly uncomfortable with its partner. Despite its initial agreement to let BCCI be BCCI, Abedi's original US partner, Bank of America, had found itself bewildered by many BCCI practices from the beginning. ” Chapter 3 of the 1992 Kerry Report
- ↑ cf. Time Magazine, July 29, 1991, The world's sleaziest bank, online at Cover Story: The Dirtiest Bank of All
- ↑ cf. March 12, 1990, His Personal Piggy Bank, online at Time.com
- ↑ see The Death Of Vincent Foster, Chapter 4
- ↑ cf. Association for Accountancy and Business Affairs, Incomplete copy of Sandstorm report ( June 28, 2007 memento on Internet Archive ) (pdf), and Association of Accountancy and Business Affairs list of BCCI reports
- ^ Adams, James, Frantz, Douglas, A Full Service Bank, Simon and Schuster, 1992, p. 90.
- ^ House of Commons Paper, Inquiry into the Supervision of the Bank of Credit and Commerce International
- ^ Adams, James, Frantz, Douglas, A Full Service Bank, Simon and Schuster, 1992, p. 135; and The Observer , January 18, 2004, Walsh, Conal, "What spooks told Old Lady about BCCI" ( Memento of November 26, 2007 in the Internet Archive )
- ^ Adams, James, Frantz, Douglas, A Full Service Bank, Simon and Schuster, 1992, pp. 89-91, p. 136.
- ↑ See Denis Robert, Ernest Backes, Révélations, Arènes Editions, 2001, ISBN 2-912485-28-2 , (online, French) ( Memento from March 1, 2007 in the Internet Archive )
- ^ Forbes, Jan. March 2002, Sins of the Father?
- ^ Conspiratorial art: A film about the life and work of Mark Lombardi. 3sat, June 6, 2012, accessed August 24, 2012 .
