Young Says Bcci Forgave $150,000 Loan To His Firm

September 02, 1991|By Martin Tolchin | Martin Tolchin,New York Times News Service

ATLANTA -- Bank of Credit and Commerce International last year forgave a $150,000 loan to Andrew Young's dormant consulting firm, freeing him from a personal obligation to make $32,000 in annual payments on interest and principal, Mr. Young, the former mayor of Atlanta, congressman and United Nations ambassador, said in an interview.

The gesture was typical of the style of the bank, which spent millions around the world in efforts to influence public officials.

BCCI was seized in July by financial regulators in seven countries after the Bank of England uncovered evidence of widespread fraud, drug trafficking and money laundering.

Mr. Young said he regarded the debt forgiveness as belated payment of $50,000 in annual retainer fees that the bank had promised his consulting firm while he was Atlanta's mayor.

He was mayor from 1982 to 1990 and remains one of Georgia's most influential public figures.

Mr. Young said the oral agreement for the consulting fees was made by the founder of BCCI, Aga Hassan Abedi, a Pakistani financier who is now gravely ill in Karachi.

Federal investigators confirmed that the circumstances of the debt-forgiveness agreement are under investigation as part of the government inquiry into BCCI's Georgia connections.

The investigators say they have no evidence that Mr. Young did anything illegal, such as using his position as mayor to help the bank.

Mr. Young said that neither he nor his firm performed any services for the promised fees and had never received the retainer fees.

The forgiveness of the loan was compensation for BCCI's having had "the right to call on us if they wanted to or needed to," Mr. Young said. "They didn't."

Mr. Young said Mr. Abedi suggested in 1986 that the firm receive a retainer. "Then he had his heart attack so we never got it," Mr. Young said.

Mr. Abedi remained in command of BCCI in 1987. In early 1988, he had a heart attack, followed by a heart transplant. He has been in poor health since and has not played an active role in BCCI.

The loan to Andrew Young Associates initially came from a $175,000 line of credit obtained from the National Bank of Georgia in 1982, the year Mr. Young became mayor. He said it was secured by liens on his house and the house of Stoney Cooks, his longtime business and political associate.

The Georgia bank was acquired in 1987 by First American Bankshares, which regulators contend was secretly owned by BCCI.

The debt forgiveness took place after Mr. Young left the mayor's office in 1990, while he was running for governor of Georgia.

Mr. Young said Mr. Cooks initiated negotiations with BCCI that led to forgiveness of the debt, because Mr. Cooks sought to refinance his house and needed to remove the lien that had secured the debt.

Mr. Young also said that BCCI officials had suggested canceling the debt.

"It was their idea," Mr. Young said. "I signed off on it."

Mr. Cooks' recollection differs.

He said in an interview that the amount of the debt was $165,000, not $150,000. Mr. Cooks said the negotiations were not prompted by a desire to refinance his house but by a wish to be compensated for services that he said were, in fact, performed by the firm.

He went to BCCI in late 1989, Mr. Cooks said, and dealt with a Mr. Jamil, whose first name Mr. Cooks said he could not recall.

"There was a period of work with no compensation," Mr. Cooks said. "When I inquired, I was told that I should recapitulate all the hours and involvement and travel. I was asked whether or not it was OK for it to be applied to the outstanding debt.

"It certainly worked out well," he added.

Mr. Young said he had personally paid about $32,000 annually on the interest and principal from 1984 to 1989. Mr. Cooks paid nothing. Both men said they did not know how much had been paid on the principal.

Banking industry executives say banks rarely forgive loans.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.