Journalists explore the secretive criminal organization that was the BCCI

May 17, 1992|By Neal Lipschutz

A FULL SERVICE BANK: HOW BCCI STOLE BILLIONS AROUND THE WORLD.

James Ring Adams and Douglas Frantz.

Pocket Books.

381 pages. $22.

DIRTY MONEY -- BCCI: THE INSIDE STORY OF THE WORLD'S SLEAZIEST BANK.

Mark Potts, Nicholas Kochan and Robert Whittington.

National Press Books.

283 pages. $21.95. Both these thickish books start with complex organization and shareholder charts and lists of major characters, giving some hint of the tangled web that was the Bank of Credit and Commerce International. But the bottom line of its nearly two decades of nefarious doings is quite clear -- the acronym BCCI has come to stand for the worst in international banking.

BCCI's world was the arcane one of money laundering, wire transfers and secret share holdings, but there were plenty of well-known names connected to it. In a fairly short time it traveled a long way from Pakistani founder Agha Hasan Abedi's vision of a Third World bank that would rank among the big players in international finance.

Manuel Noriega allegedly ran mountains of drug money through BCCI's Panama branch. Terrorist Abu Nidal had a large account at the bank's London office. Well-known Washington power attorneys Clark Clifford and Robert Altman say they were unwitting dupes in BCCI's secret control of a big U.S. bank. The list goes on.

Once the bank came tumbling down, the victims included relatively small depositors, many of them members of Britain's Asian immigrant community, who innocently put their faith in the "Third World" bank. Latest negotiations mean they may get 30 to 40 cents on the dollar for their life savings.

Two teams of journalists have tried to make sense of this secretive criminal organization. The task is enormous. BCCI was investigated by the U.S. Customs Service out of Tampa, Fla., indicted by the New York District Attorney, shut down in a coordinated move led by regulators at the Bank of England. To their advantage, these chroniclers deal with a fresh trail (most of the bank's operations were closed in July 1991) and plenty of recent documents. Some investigations continue.

Many books about recent news suffer from their proximity to the events, since readers already know the basics of a subject. But the BCCI story has so many angles, and is so complicated by banks within banks and the like, that it's quite helpful to understanding the whole to have it written down in one place. The downside is that you can drown in the details.

The problem of too many facts is most notable in a "A Full Service Bank," by James Ring Adams and Douglas Frantz, the latter of the Los Angeles Times. A well-wrought "you are there" approach bogs down in sections that center on details of how banks transfer and launder money. The authors spend too much space recounting the undercover investigation of drug-money laundering by BCCI conducted by the U.S. Customs Service. Although fascinating in parts, the book would have benefited from a truncated telling of this part of the story.

In "Dirty Money," Mark Potts of the Washington Post and two British journalists, Nicholas Kochan and Robert Whittington, understandably place more emphasis on the British side of the story. Authors of this shorter book are too willing to speculate on the possibility of more evil doings at BCCI than those that have come to light, while admitting hard evidence is wanting to support theories that BCCI might have corrupted political figures. The authors admit: "Investigators have searched far and wide for proof of wide-scale, systematic bribery and political corruption by BCCI, but so far have found little evidence to support the conjecture."

The basic story of BCCI is the same in both books. Founded in 1972, the bank never seemed to be run in a prudent manner. Large loans were made to insiders and shareholders, and they often were never paid back. Big trading losses were sustained and a secret, illegal effort was made to establish a U.S. banking presence. Secret books were kept and a constant push to garner new deposits, whatever their source, seemed to be the strategy used to paper over problems.

The authors of "A Full Service Bank" write: "From its offices around the world, BCCI was becoming a cash conduit for drug traffickers, terrorists, despots, arms merchants and other scam artists and lawbreakers."

What took regulators so long to catch up with BCCI? Both books agree that a big reason was BCCI's unique structure. Based in Luxembourg and the Cayman Islands, BCCI stayed to some degree off-limits to major nations' bank regulators. "A Full Service Bank" says: "BCCI was a stealth bank, the institution that did not show up on the radar screen long enough for any regulator to get a fix on its position."

"Dirty Money" provides a quick recap of missed regulatory opportunities: "More aggressive sharing of leads by the CIA might have broken the bank scandal open in the mid-1980s. More skeptical questioning by the Federal Reserve might have prevented the secret takeover of First American. More detailed examination of BCCI's books by PriceWaterhouse might have revealed the bank's house of cards at any time in the 1980s . . . And so on."

The regulators' record was not all bleak. Robert Mazur, who went undercover for the U.S. Customs Service at substantial personal risk to help bring BCCI to justice for laundering drug money, is one hero. But even he grew frustrated at what he saw as a lack of diligent follow-up investigations, and eventually left the Customs Service.

Mr. Lipschutz is a writer living in New York.

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