WASHINGTON -- The Justice Department was told in 1982 that the Bank of Credit and Commerce International was involved in the takeover of First American Bank, according to a filing that apparently sat ignored in a public records room for years.
The information, contained in a filing by investment broker Kidder Peabody, is the earliest known documentation that BCCI had taken over the huge U.S. bank that year despite assurances to the contrary.
The filing was made four years before a secret CIA memo was circulated to Cabinet departments telling them that BCCI was the actual owner of First American Bank and eight years before the Federal Reserve Board said that it discovered who First American's owners really were.
There has been much finger-pointing in Washington this summer about which agencies did and didn't have the CIA document and why, if they had it, the agencies didn't act against BCCI.
None of the agencies, however, apparently knew about the Kidder Peabody document in the Justice Department's records.
The Federal Reserve Board last month fined BCCI $200 million for concealing its ownership of First American Bank. Earlier this month, Clark M. Clifford, one of Washington's elder statesmen and a former defense secretary, resigned as chairman of the Washington bank's parent company, First American Bankshares, amid the burgeoning BCCI scandal. His law partner, Robert A. Altman, resigned as president of a related company.
Joe Coyne, a spokesman for the Federal Reserve, said last weethat the Fed never would have approved BCCI's entry into the United States because, "They were a rogue bank. They didn't have any consolidated supervision. We were just very wary of them."
A New York grand jury last month indicted BCCI in what District Attorney Robert M. Morgenthau called "the biggest bank fraud in world financial history." BCCI has been tied to a variety of shady figures, including former Panamanian leader Manuel Antonio Noriega, the Abu Nidal terrorist organization and the leaders of Colombian drug cartels.
Mr. Coyne said that suspicion of BCCI led the Fed repeatedly to ask key government agencies, including the Justice Department and the CIA, whether they had any evidence that BCCI was a secret owner of First American. Fed officials said that they didn't begin to get confirmation of their suspicions until recently.
In June 1982, however, a statement saying BCCI was involved in the First American takeover was filed by Kidder Peabody with the Foreign Agents Registration Act Office of the Justice Department.
The statement was filed under the Foreign Agents Registration Act, which requires U.S. agents for foreigners to disclose some of their activities.
The Kidder Peabody statement said the firm was representing BCCI, its founder, Agha Hassan Abedi, and three other companies in the buyout of what became First American.
The statement said that Kidder Peabody, "on behalf of each" of the five foreign principals, "reviewed drafts of proposed documents relating to a proposed tender offer for" First American Bank stock, "discussed various aspects of such offer with representatives" of the five foreign principals, and handled the stock transaction in April 1982.
Helen Platt, a spokesman for Kidder Peabody, said that no one now at the firm recalls the BCCI deal and that the filing gives no indication of any wrongdoing by Kidder Peabody.
Nevertheless, banking regulators said the Kidder Peabody filing should have set off alarm bells.
"Why would Kidder Peabody be acting on behalf of BCCI in reviewing documents" in a bank takeover if BCCI wasn't part of the takeover? asked Sidney Bailey, Virginia's commissioner of financial institutions. "Of course, BCCI was interested because it did have or expected to have an investment" in First American.
Mr. Bailey was the only member of a group that met at the Federal Reserve in 1981 who recommended that the First American Bank takeover be prohibited.
Doug Tillett, a spokesman for the Justice Department, said last week that BCCI may have been acting as an investment adviser to some of the Arab investors who were supposedly buying First American. He said BCCI might have reviewed the Kidder Peabody documents solely in its capacity as an adviser.
Told of Mr. Tillett's scenario, Mr. Bailey said, "It's possible, but it's so farfetched as to be highly unlikely." He said the filing should have at least raised questions at the Justice Department.
Lawyers involved in the BCCI probe said that since the Justice Department's Foreign Agents Registration Act Office was not involved in the BCCI matter, it might have been simply unaware of the questions surrounding the takeover.