U.S. failed to act against BCCI, Senate panel told

August 02, 1991|By Gilbert A. Lewthwaite | Gilbert A. Lewthwaite,Washington Bureau of the Sun

WASHINGTON -- U.S. regulatory agencies ignored repeated efforts to engage them fully against the illegal operations of the Bank of Commerce and Credit International, two witnesses told a congressional hearing yesterday.

William von Raab, former Customs commissioner who tried to alert the authorities to BCCI's fraudulent activities as early as 1987, said that "a gray unit" of influence peddlers worked in Washington on behalf of the bank. "Let me tell you, whatever the Washington brokers got for their involvement in protecting BCCI against the federal government, they earned every million dollars they received," he added.

Jack Blum, a veteran Senate investigator who also tried in vain to energize U.S. prosecutors, said he had heard of a Federal Reserve Board audit of BCCI-owned First American Bankshares Inc., which listed "payoffs in Washington." Sen. Alan Cranston, D-Calif., said the panel would follow up his "lead."

Said Mr. Blum: "The problem that we're all having in dealing with this bank is that it had 3,000 criminal customers, and every one of those 3,000 criminal customers is a Page 1 story.

"So, if you pick up any one of those accounts, you could find financing for nuclear weapons, gun running, narcotics dealing, and you will find all manner and means of crime around the world in the records of this bank."

Opening the first congressional hearing into the BCCI global scandal, Sen. John Kerry, D-Mass., described it as "the most prominent and dramatic symbol of a way of doing business that challenges and diminishes people's faith in government -- our government and governments around the world."

Among the main points from yesterday's testimony to the Senate Subcommittee on Terrorism, Narcotics and International Operations were that:

* A BCCI executive told undercover agents he was being advised by one of his U.S. lawyers -- Robert K. Altman, a partner of former Defense Secretary Clark M. Clifford -- to flee the country to avoid a congressional subpoena.

Mr. Clifford and Mr. Altman acted for the buyers of First American Bankshares, now alleged to have represented BCCI. The two later became chairman and president, respectively, of the Washington-based banking company. Both have denied any knowledge of BCCI's involvement in the acquisition of First American and have volunteered to testify to the subcommittee in September.

* A joint U.S.-Anglo-French Customs investigation of BCCI's money laundering was established in 1987, but Mr. von Raab was "prohibited" in 1989 by the Treasury Department from receiving BCCI documents seized by British customs in London.

"At about this time the Treasury Department decided I should be removed from the BCCI case," said Mr. von Raab, whose Customs Service job came under Treasury jurisdiction. He said he was removed "for pushing the case too vigorously publicly."

* A January 1990 plea bargain, accepted by the Justice Department in a Florida money-laundering case, allowed BCCI to continue to operate here although its illegal acquisition of First American was known at the time.

Mr. von Raab described the plea bargain as "unbelievable" and "a tribute to the influence team that was marching up and down the Eastern Seaboard helping BCCI keep its neck off the block."

He suggested the Justice Department was "blinded" by the prospect of getting BCCI's cooperation in its drug case against Manuel Noriega, the former Panamanian dictator.

Justice Department officials said last night the plea bargain was approved by other Customs Service officials.

They pointed out that Justice and Treasury developed the first investigation of BCCI and obtained the first convictions of the bank's officials. They said that federal prosecutors were continuing "aggressive" investigations into alleged BCCI money-laundering and fraud in Washington, Miami, Tampa and Atlanta.

* U.S. attorneys in Florida failed to follow up on information supplied to them in 1988 by Mr. Blum about BCCI's international criminal clientele and activities.

Mr. Blum said he finally turned to Manhattan District Attorney Robert Morgenthau for action against BCCI.

* A box of BCCI documents, taken sealed to the U.S. Embassy in Panama for forwarding to Drug Enforcement Agency headquarters in Miami, had been opened and emptied by the time the DEA agent who shipped it went to reclaim it.

"To my knowledge the documents were never found, no one was ever prosecuted," Mr. Blum said.

"People are trying to destroy, hide and lose those records as we speak," he said.

* A U.S. law enforcement agent was refused permission by the State Department to travel abroad to obtain information about a BCCI executive, who this week was banned permanently from any involvement in U.S. banking.

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