How BCCI Became a One-Stop Shopping Center for Criminals And

EXCLUSIVE: How B.C.C.I. became a one-stop shopping center for criminals and spies -and how the U.S. is trying to cover up its involvement 061O-£2lBO rli ;{Il a8 £80001d SIl.lltl :JSStl NHIS #£000 06! xoa :n:3d90n~ m~ I~l~ N313H .... -. I r:""I"'1 .•"''-' r T ,-,- HH"" l:.c.(..tlu::.... V1t IltoHt'n to ~ 00 I .,., tt i Ttl T ']_r· ... ······~·~·~··+·~·T·+·T··+··.. ·l"i007fi. ;'1 .J 1'· .:;,;.. +.J.J..+.,. .... ,.." .... ".".,. .._ "_' ...' .... ". FROM THE MANAGING EDITOR suading their sources to talk and finding ruses to communicate with safety. "Everybody we talked to was afraid of being killed," says Gwynne. In hotels from Washington to Abu Dhabi, Beaty of ten had to leave his room in the "Beaty?" early morning to return calls from "Yeah?" telephone booths. He persuaded "It's overseas-Pakistan. They several sources to meet him on say it's very important." neutral ground in Casablanca, and In the hours that led to last Fri learned more details there while day's closing of our cover story, dining on fish and rice in a Bedou correspondents Jonathan Beaty . in's tent. Beaty came right up and Sam Gwynne were holed up in against the sinister underside of an office, still tracing the weird the story when a man from the contours of one of the world's black network invited himself into most baroque financial schemes Beaty's hotel room in Abu Dhabi a Washington-to-Abu Dhabi in and threatened to kill him. trigue that matches John Ie Carre's Another challenge was "hav imagination for espionage, Freder ing to socialize with oil-rich Ar ick Forsyth's for terrorism and Oli abs in a style to which they had ver Stone's for greed. In this become accustomed," says Beaty. week's story, Jonathan and Sam Cracking B. C. c.J.: Jonathan Beaty and Sam Gwynne So there were late-night visits to have uncovered how the Bank of nightclubs in Casablanca and pur Credit & Commerce International "Almost all the wild things chases of exotic foods from Los used a "black network" of terror that were said back in February turned Angeles to London. Once, a de ists and self-appointed spies to out to be true." fector from the black network serve as a one-stop shopping cen who was being interviewed in New ter for criminals, corrupt leaders and official intelligence agencies York where he was in hiding turned to Beaty for a little spend around the world. "The story at the outset was a conspiratori ing money. "I gave him the last $100 out of my pocket," he says, alist's dream," says Gwynne. "Almost all the wild things that were "and he tipped the waitress $50." said back in February turned out to be true." Because the black network stops at nothing, not even murder, to further the bank's aims, a large part of the team's work was per- 1111111111111111111111111111111111111111111111- f------------Business---------I ,\\\"" """"" - ,\\' - \\~ - \'~ - ~ - ~ - ~ - COVER STORY ~ - ~ 1111111111111111111111111111111111111111111111111111111I11111111111111111111 ~ ~ - - :: - -= ........... -----~ ~ c=:::::::=--..==========:::::;") The Dirtiest ..f ","11111111111111111111111111 -= .... CIA - .. Maintained - .... accounts B.C.C.I . Staff of 1,500 . .. fo r cove rt Se rvices rendered : - operation s OVERSEAS The main arm s deals, bribery, - espionage, extortion , - ce nter, in Bank of All -- drug trafficking Sheik First . - .. .. ... .................. ....... How B.C.C.I. and its "black network" became a - Kamal American il Possible - Adham B.C.CJ. ll financial supermarket for crooks and spies - (Sa udi) Bankshares subsidiaries "'" clients: - "'" Argentina - $313 Washington and branches China and how the U.S. is trying to cover up its role - million ~ - in 70 countries ~ Czecho- functions as a global intell igence operation - Clark Clifford, By JONATHAN BEATY and S.C. GWYNNE - ~ slovakia and a Mafia-li ke enforcement sq uad. Op - Cha irm an NEW YORK - Robert Altman, ~ Guatemala erating primari ly out of the bank's offices - ~ Iran - President - ~ 11111 Israel "f could tell you what you want to know, in Karach i, Pakistan, the 1,500-employee - but f must WOrty about my wife and family black network has used sophisticated spy :111 11111111111 ; Ubya they could be killed. " equipment and techniques, along wi th - - .. = N. Korea -a former top B.C.C.1. officer bribery, extortion, kidnapping and even, by - - = Peru - Ghaith Independ .. P.L.O. some accounts, murder. The black net - = - Pharaon ence Bank ./ ....• /./ •.. / .... / Saudi "We better not talk about this over the work-so named by its own members - ••......... = - (Sa ud i) Encino, - Arabia phone. We've found some bugs in offices that stops at almost nothing to further the - $500 Calif. Syria haven't been put there by law enforcement. " bank's aims the world over. - million -a Manhattan investigator probing The more conventional departments of - B.C.C.I. B.C.C.I. handled such services as launder - ing money for the drug trade and helping - ank-fraud cases are usually dry, dictators loot their national treasuries. The - tedious affairs. Not this one. black network, which is stiU fu nctioning, - Nothing in the history of modern operates a lucrative arms-trade business - $8 million - given to financial scandals rivals the un and transports drugs and gold. Accord- - Gulf shipping co mpa ny owned by B - National Jimmy Mohamed bin fo lding saga of the Bank of Credit & Com ing to investigators and participants - - Carter's Gokal brothers (Pa ki stani) Rashid al Maktoum (Dubal) merce International, the $20 billion rogue in those operations, it often works --11111 Bank of Georgia Global $405 million $121 million empire that regulators in 62 countries sh ut with Western and Middle East- Purchased from Bert Lance 2000 down early this month in a stunning global ern intelligence agencies. The sweep. Never has a single scandal involved strange and still murky ties so much money, so many nations or so between B.C.C.1. and the in- many prominent people. telligence agencies of several - - Superlatives are quickly exhausted: it is countries are so pervasive - - --11111111111111 Saddam Hussein, that even the White House Ma~uel 111111111111111111111:: the largest corporate criminal enterprise Noriega Ferdinand Marcos ever, the biggest Ponzi scheme, the most has become entangled. As pervasive money-laundering operation TIME reported earli er this month, and financial supermarket ever created for the National Security Council used B.C.C.I. the likes of Manuel Noriega, Ferdinand to funnel money for the Iran-contra deals, Marcos, Sad dam Hussein and the Colom and the CIA maintained accounts in bian drug barons. B.C.C.I. even accom B.C.C.I. for covert operations. Moreover, plished a Stealth-like invasion of the U.S. investigators have told TIME that the De _ OWNERSHIP I 1111I1 secret) banking industry by secretly buying First fense Intelligence Agency has maintained a _ CUSTOMER 1111111 secret) American Bankshares, a Washington slush-fund account with B.C.C.I., apparent THE CONNECTIONS based holding company with offices ly to pay for clandestine activities. _ DUBIOUS LOANS stretching from Florida to New Yo rk, But the CIA may have used B.c.c.1. as CHARITY DONATIONS whose chairman is former U.S. Defense more than an un dercover banker: U.S. The bank's global web was designed to Secretary Clark Clifford. agents collaborated with the black network mystify. It consisted of dozens of shell But B.C.C.I. is more than just a crimi in several operations, according to a B.C.C.I.: nal bank. From interviews with sources B.C.C.I. black-network "officer" who is brainchild companies, branches and subsidiaries in 70 countries. The structure close to B.C.C.L, TIME has pieced together now a secret U.S. government witness. of founder allowed the bank to operate virtually without regulation all over the Agha a portrait of a clandestine division of the Sources have told investigators that Hasan world. As a result, most of the missing money may be lost for good. bank called the "black network," which B.C.C.I. worked closely with Israel's spy Abedi 42 TIME,JULY 29, J991 agencies and other Western intelligence prodigiously corrupt division was spawned. zation, and described its wealth and politi groups as well, especially in arms deals. The Soviet invasion of Afghanistan in cal power, but at first they never said exact The bank also maintained cozy relation 1979 and the resulting strategic impor ly what the organization did." ships with international terrorists, say in tance of neighboring Pakistan accelerated This operative-call him Mustafa-un vestigators who discovered suspected ter the growth of B.C.C.I.'s geopolitical power derwent a year of training that began with rorist accounts for Libya, Syria and the and its unbridled use of the black network. education in psychology and the principles Palestine Liberation Organization in Because the U.S. wanted to supply the mu of leadership and proceeded into spycraft, B.C.C.I.'s London offices. jahedin rebels in Afghanistan with Stinger with lessons in electronic surveillance, The bank's intelligence connections missiles and other military hardware, it breaking and entering, and interrogation and alleged bribery of public officials needed the full cooperation of Pakistan, techniques. "Then the nature of our advis around the world point to an explanation across whose border the weapons would be ers changed," says Mustafa. "The pleas for the most persistent mystery in the shipped. By the mid-1980s, the CIA'S Islam antness was gone, and we moved to Paki B.C.C.1. scandal: why banking and law abad operation was one of the largest U.S. stan, where we trained with firearms.

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