In a July 26 column about BCCI, I applied the code name "Tumbleweed" to a former Saudi spymaster; investigators say it refers to a banking operation.
THE UNDERWORLD BANK scandal is oozing out all over.
Conceived in Karachi, financed in Abu Dhabi, the conspiracy reached into the world's Western capitals and perhaps the U.N. under the protection of high-paid lobbyists and naive spooks. The BCCI scandal involves the laundering of drug money, the illicit financing of terrorism and of arms to Iraq, the easy purchase of respectability and the corruption of the world banking system.
For more than a decade, the biggest banking swindle in history worked beautifully. Between $5 billion and $15 billion was bilked from governments and individual depositors to be put to the most evil of purposes -- while lawmen and regulators slept.
FOR THE RECORD - CORRECTION
Now the fight among investigators is coming out into the open. Manhattan District Attorney Robert Morgenthau, who gave impetus to long-contained probes, told a Senate subcommittee headed by Sen. John Kerry that he is getting no cooperation from the Thornburgh Justice Department.
Justice's Criminal Division chief, Robert Mueller, tells me he will have a hatchet-burying session with the independent-minded D.A. next week, and vehemently denies having told British intelligence to stop cooperating with the Manhattan grand jury.
And what about the revelation last week by New York Times reporter Jeff Gerth that the CIA was using BCCI for payoffs abroad, which may have been used by the swindlers as a cover?
"At no time have we received a request from the intelligence community," insists Mueller, "to alter or suspend or in any way change the course of our investigation."
He may not know everything that is going on around him; one of the threats to Robert Gates's nomination to head the CIA is the question of what use he made of BCCI in the '80s; the agency is now preparing a report for Senate Intelligence.
When asked in 1981 by the Federal Reserve Board for the background of a key investor in BCCI, the CIA neglected to note that he was the chief of Saudi intelligence -- later code-named "Tumbleweed" -- a relevant fact of which the agency could hardly have been ignorant.
When asked about this dereliction, the top Fed enforcement officer, William Taylor, chirped: "Some people like that become president."
Interlocking banking directorates cry out for examination, as between BCCI and BAII, the Luxembourg-shrouded Banque Arabe et Internationale d'Investissement. (Maybe we should close our embassy in Luxembourg.)
I suspect a connection, too, between the BCCI conspiracy and Atlanta's Bank Lavoro scandal, in which $3 billion in hot cash was run past our befuddled Fed.
Of that, $600 million in "grain guarantees" was in effect snatched from the U.S. taxpayer and most likely used to finance nuclear arms and rockets for Saddam Hussein. Justice's Mueller and his overwhelmed Fraud Section chief, Larry Ergenson, think my suspicion is misplaced; we'll see.
A question investigators have been too timid to ask: Why did dirty-money sources give $8 million to Jimmy Carter's clean-air philanthropy? The former president, transported royally on BCCI aircraft, arranged for his friends to hire a former British prime minister as a lobbyist.
What else did Carter do in the Third World to lend respectability to these con men? Why didn't his CIA briefers warn him?
Congressional oversight, excluding Kerry, has been myopic. Joe Biden, chairman of Senate Judiciary, pleads preoccupation with crime bills and confirmations, but says: "Justice is beginning to awaken to the scope of this. If Justice doesn't move, we'll move on Justice."
Where are the media? Regardie's magazine took the lead with the news that a mysterious group controlled the Washington bank headed by Clark Clifford.
Time magazine devotes a cover to the scandal this week, following its excellent April 1 reporting, and the Wall Street Journal's coverage is must reading for scandalmongers. The networks have found the biggest heist in history all too complicated and un-visual; months from now, "60 Minutes" may come on the field to shoot the wounded.
But this is more than a good story. As we flip over this huge flat rock of corruption, we will see who scurries around with the pernicious profits of arms, drugs and fraud.