| Subj: | Fwd: Carlyle and BCCI |
| Date: | 2/13/02 5:54:54 PM Pacific Standard Time |
| From: | |
| To: |
| Subj: | Fwd: BCCI still operating |
| Date: | 2/13/02 5:54:10 PM Pacific Standard Time |
| From: | |
| To: |
This is the same network that the Al Qeuda cells here in the U.S. are
using....remember that Asst. US Attorney that was murdered in Seattle in
Nov....well I think this was related to his discovery of BCCI still being
in operation....please read this and you will see how the same people and
nations are still players in this money game
THE BCCI AFFAIR
EXECUTIVE SUMMARY
1. BCCI CONSTITUTED INTERNATIONAL FINANCIAL CRIME ON A MASSIVE AND GLOBAL
SCALE.
BCCI's unique criminal structure -- an elaborate corporate spider-web with
BCCI's founder, Agha Hasan Abedi and his assistant, Swaleh Naqvi, in the
middle -- was an essential component of its spectacular growth, and a guarantee
of its eventual collapse. The structure was conceived by Abedi and managed
by Naqvi for the specific purpose of evading regulation or control by
governments. It functioned to frustrate the full understanding of BCCI's
operations by anyone.
Unlike any ordinary bank, BCCI was from its earliest days made up of multiplying
layers of entities, related to one another through an impenetrable series
of holding companies, affiliates, subsidiaries, banks-within-banks, insider
dealings and nominee relationships. By fracturing corporate structure, record
keeping, regulatory review, and audits, the complex BCCI family of entities
created by Abedi was able to evade ordinary legal restrictions on the movement
of capital and goods as a matter of daily practice and routine. In creating
BCCI as a vehicle fundamentally free of government control, Abedi developed
in BCCI an ideal mechanism for facilitating illicit activity by others, including
such activity by officials of many of the governments whose laws BCCI was
breaking.
BCCI's criminality included fraud by BCCI and BCCI customers involving billions
of dollars; money laundering in Europe, Africa, Asia, and the Americas; BCCI's
bribery of officials in most of those locations; support of terrorism, arms
trafficking, and the sale of nuclear technologies; management of prostitution;
the commission and facilitation of income tax evasion, smuggling, and illegal
immigration; illicit purchases of banks and real estate; and a panoply of
financial crimes limited only by the imagination of its officers and customers.
Among BCCI's principal mechanisms for committing crimes were its use of shell
corporations and bank confidentiality and secrecy havens; layering of its
corporate structure; its use of front-men and nominees, guarantees and buy-back
arrangements; back-to-back financial documentation among BCCI controlled
entities, kick-backs and bribes, the intimidation of witnesses, and the retention
of well-placed insiders to discourage governmental action.
2. BCCI SYSTEMATICALLY BRIBED WORLD LEADERS AND POLITICAL FIGURES THROUGHOUT
THE WORLD.
BCCI's systematically relied on relationships with, and as necessary, payments
to, prominent political figures in most of the 73 countries in which BCCI
operated. BCCI records and testimony from former BCCI officials together
document BCCI's systematic securing of Central Bank deposits of Third World
countries; its provision of favors to political figures; and its reliance
on those figures to provide BCCI itself with favors in times of need.
These relationships were systematically turned to BCCI's use to generate
cash needed to prop up its books. BCCI would obtain an important figure's
agreement to give BCCI deposits from a country's Central Bank, exclusive
handling of a country's use of U.S. commodity credits, preferential treatment
on the processing of money coming in and out of the country where monetary
controls were in place, the right to own a bank, secretly if necessary, in
countries where foreign banks were not legal, or other questionable means
of securing assets or profits. In return, BCCI would pay bribes to the figure,
or otherwise give him other things he wanted in a simple quid-pro-quo.
The result was that BCCI had relationships that ranged from the questionable,
to the improper, to the fully corrupt with officials from countries all over
the world, including Argentina, Bangladesh, Botswana, Brazil, Cameroon, China,
Colombia, the Congo, Ghana, Guatemala, the Ivory Coast, India, Jamaica, Kuwait,
Lebanon, Mauritius, Morocco, Nigeria, Pakistan, Panama, Peru, Saudi Arabia,
Senegal, Sri Lanka, Sudan, Suriname, Tunisia, the United Arab Emirates, the
United States, Zambia, and Zimbabwe.
3. BCCI DEVELOPED A STRATEGY TO INFILTRATE THE U.S. BANKING SYSTEM, WHICH
IT SUCCESSFULLY IMPLEMENTED, DESPITE REGULATORY BARRIERS THAT WERE DESIGNED
TO KEEP IT OUT.
In 1977, BCCI developed a plan to infiltrate the U.S. market through secretly
purchasing U.S. banks while opening branch offices of BCCI throughout the
U.S., and eventually merging the institutions. BCCI had significant difficulties
implementing this strategy due to regulatory barriers in the United States
designed to insure accountability. Despite these barriers, which delayed
BCCI's entry, BCCI was ultimately successful in acquiring four banks, operating
in seven states and the District of Colombia, with no jurisdiction successfully
preventing BCCI from infiltrating it.
The techniques used by BCCI in the United States had been previously perfected
by BCCI, and were used in BCCI's acquisitions of banks in a number of Third
World countries and in Europe. These included purchasing banks through nominees,
and arranging to have its activities shielded by prestigious lawyers,
accountants, and public relations firms on the one hand, and politically-well
connected agents on the other. These techniques were essential to BCCI's
success in the United States, because without them, BCCI would have been
stopped by regulators from gaining an interest in any U.S. bank. As it was,
regulatory suspicion towards BCCI required the bank to deceive regulators
in collusion with nominees including the heads of state of several foreign
emirates, key political and intelligence figures from the Middle East, and
entities controlled by the most important bank and banker in the Middle East.
Equally important to BCCI's successful secret acquisitions of U.S. banks
in the face of regulatory suspicion was its aggressive use of a series of
prominent Americans, beginning with Bert Lance, and continuing with former
Defense Secretary Clark Clifford, former U.S. Senator Stuart Symington,
well-connected former federal bank regulators, and former and current local,
state and federal legislators. Wittingly or not, these individuals provided
essential assistance to BCCI through lending their names and their reputations
to BCCI at critical moments. Thus, it was not merely BCCI's deceptions that
permitted it to infiltrate the United States and its banking system. Also
essential were BCCI's use of political influence peddling and the revolving
door in Washington.
4. THE JUSTICE DEPARTMENT MISHANDLED ITS INVESTIGATION AND PROSECUTION OF
BCCI, AND ITS RELATIONSHIPS WITH OTHER GOVERNMENT AGENCIES CONCERNING BCCI.
Federal prosecutors in Tampa handling the 1988 drug money laundering indictment
of BCCI failed to recognize the importance of information they received
concerning BCCI's other crimes, including its apparent secret ownership of
First American. As a result, they failed adequately to investigate these
allegations themselves, or to refer this portion of the case to the FBI and
other agencies at the Justice Department who could have properly investigated
the additional information.
The Justice Department, along with the U.S. Customs Service and Treasury
Departments, failed to provide adequate support and assistance to investigators
and prosecutors working on the case against BCCI in 1988 and 1989, contributing
to conditions that ultimately caused the chief undercover agent who handled
the sting against BCCI to quit Customs entirely.
The January 1990 plea agreement between BCCI and the U.S. Attorney in Tampa
kept BCCI alive, and had the effect of discouraging BCCI's officials from
telling the U.S. what they knew about BCCI's larger criminality, including
its ownership of First American and other U.S. banks.
The Justice Department essentially stopped investigating BCCI following the
plea agreement, until press accounts, Federal Reserve action, and the New
York District Attorney's investigation in New York forced them into action
in mid-1991.
Justice Department personnel in Washington lobbied state regulators to keep
BCCI open after the January 1990 plea agreement, following lobbying of them
by former Justice Department personnel now representing BCCI.
Relations between main Justice in Washington and the U.S. Attorney for Miami,
Dexter Lehtinen, broke down on BCCI-related prosecutions, and key actions
on BCCI-related cases in Miami were, as a result, delayed for months during
1991.
Justice Department personnel in Washington, Miami, and Tampa actively obstructed
and impeded Congressional attempts to investigate BCCI in 1990, and this
practice continued to some extent until William P. Barr became Attorney General
in late October, 1991.
Justice Department personnel in Washington, Miami and Tampa obstructed and
impeded attempts by New York District Attorney Robert Morgenthau to obtain
critical information concerning BCCI in 1989, 1990, and 1991, and in one
case, a federal prosecutor lied to Morgenthau's office concerning the existence
of such material. Important failures of cooperation continued to take place
until William P. Barr became Attorney General in late October, 1991.
Cooperation by the Justice Department with the Federal Reserve was very limited
until after BCCI's global closure on July 5, 1991.
Some public statements by the Justice Department concerning its handling
of matters pertaining to BCCI were more cleverly crafted than true.
5. NEW YORK DISTRICT ATTORNEY MORGENTHAU NOT ONLY BROKE THE CASE ON BCCI,
BUT INDIRECTLY BROUGHT ABOUT BCCI'S GLOBAL CLOSURE.
Acting on information provided him by the Subcommittee, New York District
Attorney Robert Morgenthau began an investigation in 1989 of BCCI which
materially contributed to the chain of events that resulted in BCCI's closure.
Questions asked by the District Attorney intensified the review of BCCI's
activities by its auditors, Price Waterhouse, in England, and gave life to
a moribund Federal Reserve investigation of BCCI's secret ownership of First
American.
The District Attorney's criminal investigation was critical to stopping an
intended reorganization of BCCI worked out through an agreement among the
Bank of England, the government of Abu Dhabi, BCCI's auditors, Price Waterhouse,
and BCCI itself, in which the nature and extent of BCCI's criminality would
be suppressed, while Abu Dhabi would commit its financial resources to keep
the bank going during a restructuring. By the late spring of 1991, the key
obstacle to a successful restructuring of BCCI bankrolled up Abu Dhabi was
the possibility that the District Attorney of New York would indict. Such
an indictment would have inevitably caused a swift and thoroughly justified
an international run on BCCI by depositors all over the world. Instead, it
was a substantial factor in the decision of the Bank of England to take the
information it had received from Price Waterhouse and rely on it to close
BCCI.
6. BCCI'S ACCOUNTANTS FAILED TO PROTECT BCCI'S INNOCENT DEPOSITORS AND CREDITORS
FROM THE CONSEQUENCES OF POOR PRACTICES AT THE BANK OF WHICH THE AUDITORS
WERE AWARE FOR YEARS.
BCCI's decision to divide its operations between two auditors, neither of
whom had the right to audit all BCCI operations, was a significant mechanism
by which BCCI was able to hide its frauds during its early years. For more
than a decade, neither of BCCI's auditors objected to this practice.
BCCI provided loans and financial benefits to some of its auditors, whose
acceptance of these benefits creates an appearance of impropriety, based
on the possibility that such benefits could in theory affect the independent
judgment of the auditors involved. These benefits included loans to two Price
Waterhouse partnerships in the Caribbean. In addition, there are serious
questions concerning the acceptance of payments and possibly housing from
BCCI or its affiliates by Price Waterhouse partners in the Grand Caymans,
and possible acceptance of sexual favors provided by BCCI officials to certain
persons affiliated with the firm.
Regardless of BCCI's attempts to hide its frauds from its outside auditors,
there were numerous warning bells visible to the auditors from the early
years of the bank's activities, and BCCI's auditors could have and should
have done more to respond to them.
By the end of 1987, given Price Waterhouse (UK)'s knowledge about the
inadequacies of BCCI's records, it had ample reason to recognize that there
could be no adequate basis for certifying that it had examined BCCI's books
and records and that its picture of those records were indeed a "true and
fair view" of BCCI's financial state of affairs.
The certifications by BCCI's auditors that its picture of BCCI's books were
"true and fair" from December 31, 1987 forward, had the consequence of assisting
BCCI in misleading depositors, regulators, investigators, and other financial
institutions as to BCCI's true financial condition.
Prior to 1990, Price Waterhouse (UK) knew of gross irregularities in BCCI's
handling of loans to CCAH/First American and was told of violations of U.S.
banking laws by BCCI and its borrowers in connection with CCAH/First American,
and failed to advise the partners of its U.S. affiliate or any U.S. regulator.
There is no evidence that Price Waterhouse (UK) has to this day notified
Price Waterhouse (US) of the extent of the problems it found at BCCI, or
of BCCI's secret ownership of CCAH/First American. Given the lack of information
provided Price Waterhouse (US) by its United Kingdom affiliate, the U.S.
firm performed its auditing of BCCI's U.S. branches in a manner that was
professional and diligent, albeit unilluminating concerning BCCI's true
activities in the United States.
Price Waterhouse's certification of BCCI's books and records in April, 1990
was explicitly conditioned by Price Waterhouse (UK) on the proposition that
Abu Dhabi would bail BCCI out of its financial losses, and that the Bank
of England, Abu Dhabi and BCCI would work with the auditors to restructure
the bank and avoid its collapse. Price Waterhouse would not have made the
certification but for the assurances it received from the Bank of England
that its continued certification of BCCI's books was appropriate, and indeed,
necessary for the bank's survival.
The April 1990 agreement among Price Waterhouse (UK), Abu Dhabi, BCCI, and
the Bank of England described above, resulted in Price Waterhouse (UK) certifying
the financial picture presented in its audit of BCCI as "true and fair,"
with a single footnote material to the huge losses still to be dealt with,
failed adequately to describe their serious nature. As a consequence, the
certification was materially misleading to anyone who relied on it ignorant
of the facts then mutually known to BCCI, Abu Dhabi, Price Waterhouse and
the Bank of England.
The decision by Abu Dhabi, Price Waterhouse (UK), BCCI and the Bank of England
to reorganize BCCI over the duration of 1990 and 1991, rather than to advise
the public of what they knew, caused substantial injury to innocent depositors
and customers of BCCI who continued to do business with an institution which
each of the above parties knew had engaged in fraud.
From at least April, 1990 through November, 1990, the Government of Abu Dhabi
had knowledge of BCCI's criminality and frauds which it apparently withheld
from BCCI's outside auditors, contributing to the delay in the ultimate closure
of the bank, and causing further injury to the bank's innocent depositors
and customers.
7. THE CIA DEVELOPED IMPORTANT INFORMATION ON BCCI, AND INADVERTENTLY FAILED
TO PROVIDE IT TO THOSE WHO COULD USE IT.
THE CIA AND FORMER CIA OFFICIALS HAD A FAR WIDER RANGE OF CONTACTS AND LINKS
TO BCCI AND BCCI SHAREHOLDERS, OFFICERS, AND CUSTOMERS, THAN HAS BEEN
ACKNOWLEDGED BY THE CIA.
By early 1985, the CIA knew more about BCCI's goals and intentions concerning
the U.S. banking system than anyone else in government, and provided that
information to the U.S. Treasury and the Office of the Comptroller of the
Currency, neither of whom had the responsibility for regulating the First
American Bank that BCCI had taken over. The CIA failed to provide the critical
information it had gathered to the correct users of the information -- the
Federal Reserve and the Justice Department.
After the CIA knew that BCCI was as an institution a fundamentally corrupt
criminal enterprise, it continued to use both BCCI and First American, BCCI's
secretly held U.S. subsidiary, for CIA operations.
While the reporting concerning BCCI by the CIA was in some respects impressive
-- especially in its assembling of the essentials of BCCI's criminality,
its secret purchase of First American by 1985, and its extensive involvement
in money laundering -- there were also remarkable gaps in the CIA's reported
knowledge about BCCI.
Former CIA officials, including former CIA director Richard Helms and the
late William Casey; former and current foreign intelligence officials, including
Kamal Adham and Abdul Raouf Khalil; and principal foreign agents of the U.S.,
such as Adnan Khashoggi and Manucher Ghorbanifar, float in and out of BCCI
at critical times in its history, and participate simultaneously in the making
of key episodes in U.S. foreign policy, ranging from the Camp David peace
talks to the arming of Iran as part of the Iran/Contra affair. Yet the CIA
has continued to maintain that it has no information regarding any involvement
of these people, raising questions about the quality of intelligence the
CIA is receiving generally, or its candor with the Subcommittee. The CIA's
professions of total ignorance about their respective roles in BCCI are out
of character with the Agency's early knowledge of many critical aspects of
the bank's operations, structure, personnel, and history.
The errors made by the CIA in connection with its handling of BCCI were
complicated by its handling of this Congressional investigation. Initial
information that was provided by the CIA was untrue; later information that
was provided was incomplete; and the Agency resisted providing a "full" account
about its knowledge of BCCI until almost a year after the initial requests
for the information. These experiences suggest caution in concluding that
the information provided to date is full and complete. The relationships
among former CIA personnel and BCCI front men and nominees, including Kamal
Adham, Abdul Khalil, and Mohammed Irvani, requires further investigation.
8. THE FLAWED DECISIONS MADE BY REGULATORS IN THE US WHICH ALLOWED BCCI TO
SECRETLY ACQUIRE US BANKS WERE CAUSED IN PART BY GAPS IN THE REGULATORY PROCESS
AND IN PART BY BCCI'S USE OF WELL-CONNECTED LAWYERS TO HELP THEM THROUGH
THE PROCESS.
When the Federal Reserve approved the take over of Financial General Bankshares
by CCAH in 1981, it had substantial circumstantial evidence before it to
suggest that BCCI was behind the bank's purchase. The Federal Reserve chose
not to act on that evidence because of the specific representations that
were made to it by CCAH's shareholders and lawyers, that BCCI was neither
financing nor directing the take over. These representations were untrue
and the Federal Reserve would not have approved the CCAH application but
for the false statements made to it.
In approving the CCAH application, the Federal Reserve relied upon
representations from the Central Intelligence Agency, State Department, and
other U.S. agencies that they had no objections to or concerns about the
Middle Eastern shareholders who were purporting to purchase shares in the
bank. The Federal Reserve also relied upon the reputation for integrity of
BCCI's lawyers, especially that of former Secretary of Defense Clark Clifford
and former Federal Reserve counsel Baldwin Tuttle. Assurances provided the
Federal Reserve by the CIA and State Department, and by both attorneys, had
a material impact on the Federal Reserve's willingness to approve the CCAH
application despite its concerns about BCCI's possible involvement.
In 1981, the Office of the Comptroller of the Currency had additional
information, from reports concerning BCCI's role in the Bank of America and
the National Bank of Georgia, concerning BCCI's possible use of nominee
arrangements and alter egos to purchase banks on its behalf in the United
States, which it failed to pass on to the Federal Reserve. This failure was
inadvertent, not intentional.
In approving the CCAH application, the Federal Reserve permitted BCCI and
its attorneys to carve out a seeming loophole in the commitment that BCCI
not be involved in financing or controlling CCAH's activities. This loophole
permitted BCCI to act as an investment advisor and information conduit to
CCAH's shareholders. The Federal Reserve's decision to accept this arrangement
allowed BCCI and its attorneys and agents to use these permitted activities
as a cover for the true nature of BCCI's ownership of CCAH and the First
American Banks.
After approving the CCAH application in 1981, the Federal Reserve received
few indicators about BCCI's possible improper involvement in CCAH/First American.
However, at several critical junctures, especially the purchase by First
American of the National Bank of Georgia from Ghaith Pharaon in 1986, there
were obvious warnings signs that could have been investigated and which were
not, until late 1990.
As a foreign bank whose branches were chartered by state banking authorities,
BCCI largely escaped the Federal Reserve's scrutiny regarding its criminal
activities in the United States unrelated to its interest in CCAH/First American.
This gap in regulatory oversight has since been closed by the passage of
the Foreign Bank Supervision Enhancement Act of 1991.
The U.S. Treasury Department failed to provide the Federal Reserve with
information it received concerning BCCI's ownership of First American in
1985 and 1986 from the CIA. However, IRS agents did provide important information
to the Federal Reserve on this issue in early 1989, which the Federal Reserve
failed adequately to investigate at the time.
The FDIC approved Ghaith Pharaon's purchase of the Independence Bank in 1985
knowing him to be a shareholder of BCCI and knowing that he was placing a
senior BCCI officer in charge of the bank, and failed to confer with the
Federal Reserve or the OCC regarding their previous experiences with Pharaon
and BCCI.
Once the Federal Reserve commenced a formal investigation of BCCI and First
American on January 3, 1991, its investigation of BCCI and First American
was aggressive and diligent. Its decisions to force BCCI out of the United
States and to divest itself of First American were prompt. The charges it
brought against the parties involved with BCCI in violating federal banking
standards were fully justified by the record. Its investigations have over
the past year contributed substantially to public understanding to date of
what took place.
Even after the Federal Reserve understood the nature and scope of BCCI's
frauds, it did not seek to have BCCI closed globally. This position was in
some measure the consequence of the Federal Reserve's need to secure the
cooperation of BCCI's majority shareholders, the government and royal family
of Abu Dhabi, in providing some $190 million to prop up First American Bank
and prevent an embarrassing collapse. However, Federal Reserve investigators
did actively work in the spring of 1991 to have BCCI's top management removed.
In investigating BCCI, the Federal Reserve's efforts were hampered by examples
of lack of cooperation by foreign governments, including most significantly
the Serious Fraud Office in the United Kingdom and, since the closure of
BCCI on July 5, 1991, the government of Abu Dhabi.
U.S. regulatory handling of the U.S. banks secretly owned by BCCI was hampered
by lack of coordination among the regulators, which included the Federal
Reserve, the FDIC, and the OCC, highlighting the need for further integration
of these separate banking regulatory agencies on supervision and enforcement.
9. THE BANK OF ENGLAND'S REGULATION OF BCCI WAS WHOLLY INADEQUATE TO PROTECT
BCCI'S DEPOSITORS AND CREDITORS, AND THE BANK OF ENGLAND WITHHELD INFORMATION
ABOUT BCCI'S FRAUDS FROM PUBLIC KNOWLEDGE FOR FIFTEEN MONTHS BEFORE CLOSING
THE BANK.
The Bank of England had deep concerns about BCCI from the late 1970s on,
and undertook several steps to slow BCCI's expansion in the United Kingdom.
In 1988 and 1989, the Bank of England learned of BCCI's involvement in the
financing of terrorism and in drug money laundering, and undertook additional,
but limited supervision of BCCI in response to receiving this information.
In the spring of 1990, Price Waterhouse advised the Bank of England that
there were substantial loan losses at BCCI, numerous poor banking practices,
and evidence of fraud, which together had created a massive hole in BCCI's
books. The Bank of England's response to the information was not to close
BCCI down, but to find ways to prop up BCCI and prevent its collapse. This
meant, among other things, keeping secret the very serious nature of BCCI's
problems from its creditors and one million depositors.
In April, 1990, the Bank of England reached an agreement with BCCI, Abu Dhabi,
and Price Waterhouse to keep BCCI from collapsing. Under the agreement, Abu
Dhabi agreed to guarantee BCCI's losses and Price Waterhouse agreed to certify
BCCI's books. As a consequence, innocent depositors and creditors who did
business with BCCI following that date were deceived into believing that
BCCI's financial problems were not as serious as each of these parties already
knew them to be.
From April, 1990, the Bank of England relied on British bank secrecy and
confidentiality laws to reduce the risk of BCCI's collapse if word of its
improprieties leaked out. As a consequence, innocent depositors and creditors
who did business with BCCI following that date were denied vital information,
in the possession of the regulators, auditors, officers, and shareholders
of BCCI, that could have protected them against their losses.
In order to prevent risk to its restructuring plan for BCCI and a possible
run on BCCI, the Bank of England withheld important information from the
Federal Reserve in the spring of 1990 about the size and scope of BCCI's
lending on CCAH/First American shares, despite the Federal Reserve's requests
for such information. This action by the Bank of England delayed the opening
of a full investigation by the Federal Reserve for approximately eight months.
Despite its knowledge of some of BCCI's past frauds, and its own understanding
that consolidation into a single entity is essential for regulating a bank,
in late 1990 and early 1991 the Bank of England tentatively agreed with BCCI
and its Abu Dhabi owners to permit BCCI to restructure as three "separate"
institutions, based in London, Abu Dhabi and Hong Kong. This tentative decision
demonstrated extraordinarily poor judgment on the part of the Bank of England.
This decision was reversed abruptly when the Bank of England suddenly decided
to close BCCI instead in late June, 1991.
The decision by the Bank of England in April 1990 to permit BCCI to move
its headquarters, officers, and records out of British jurisdiction to Abu
Dhabi has had profound negative consequences for investigations of BCCI around
the world. As a result of this decision, essential records and witnesses
regarding what took place were removed from the control of the British
government, and placed under the control of the government of Abu Dhabi,
which has to date withheld them from criminal investigators in the U.S. and
U.K. This decision constituted a costly, and likely irretrievable, error
on the part of the Bank of England.
10. CLARK CLIFFORD AND ROBERT ALTMAN PARTICIPATED IN IMPROPRIETIES WITH BCCI
IN THE UNITED STATES.
Regardless of whether Clifford and Altman were deceived by BCCI in some respects,
both men participated in some BCCI's deceptions in the United States.
Beginning in late 1977, Clifford and Altman assisted BCCI in purchasing a
U.S. bank, Financial General Bankshares, with the participation of nominees,
and understood BCCI's central involvement in directing and controlling the
transaction.
In the years that followed, they made business decisions regarding acquisitions
for First American that were motivated by BCCI's goals, rather than by the
business needs of First American itself; and represented as their own to
regulators decisions that had been made by Abedi and BCCI on fundamental
matters concerning First American, including the purchase by First American
of the National Bank of Georgia and First American's decision to purchase
branches in New York City.
Clifford and Altman concealed their own financing of shares of First American
by BCCI from First American's other directors and from U.S. regulators, withheld
critical information that they possessed from regulators in an effort to
keep the truth about BCCI's ownership of First American secret, and deceived
regulators and the Congress concerning their own knowledge of and personal
involvement in BCCI's illegalities in the United States.
11. ABU DHABI'S INVOLVEMENT IN BCCI'S AFFAIRS WAS FAR MORE CENTRAL THAN IT
HAS ACKNOWLEDGED, INVOLVING IN SOME CASES NOMINEE RELATIONS AND NO-RISK
TRANSACTIONS THAT ABU DHABI IS TODAY COVERING-UP THROUGH HIDING WITNESSES
AND DOCUMENTS FROM U.S. INVESTIGATORS.
Members of Abu Dhabi's ruling family appear to have contributed no more than
$500,000 to BCCI's capitalization prior to April 1990, despite being the
record owner of almost one-quarter of the bank's total shares. An unknown
but substantial percentage of the shares acquired by Abu Dhabi overall in
BCCI appear to have been acquired on a risk-free basis -- either with guaranteed
rates of return, buy-back arrangements, or both.
The interest held in BCCI by the Abu Dhabi ruling family, like the interests
held by the rulers of the three other gulf sheikdoms in the United Arab Emirates
who owned shares of BCCI, materially aided and abetted Abedi and BCCI in
projecting the illusion that BCCI was backed by, and capitalized by, Abu
Dhabi's wealth. Investments made in BCCI by the Abu Dhabi Investment Authority
appear to have been genuine, although possibly guaranteed by BCCI with buy-back
or other no-risk arrangements.
Shares in Financial General Bankshares held by members of the Abu Dhabi royal
family in late 1977 and early 1978 appear to have been nominee arrangements,
adopted by Abu Dhabi as a convenience to BCCI and Abedi, under arrangements
in which Abu Dhabi was to be without risk, and BCCI was to guarantee the
purchase through a commitment to buy-back the stock at an agreed upon price.
Abu Dhabi's representative to BCCI's board of directors, Ghanim al Mazrui,
received unorthodox financial benefits from BCCI in no-risk stock deals which
may have compromised his ability to exercise independent judgment concerning
BCCI's actions; confirmed at least one fraudulent transaction involving Abu
Dhabi; and engaged in other improprieties pertaining to BCCI; but remains
today in place at the apex of Abu Dhabi's committee designated to respond
to BCCI's collapse.
In April, 1990, Abu Dhabi was told in detail about BCCI's fraud by top BCCI
officials, and failed to advise BCCI's external auditors of what it had learned.
Between April, 1990 and November, 1990, Abu Dhabi and BCCI together kept
some information concerning BCCI's frauds hidden from the auditors.
From April, 1990 through July 5, 1991, Abu Dhabi tried to save BCCI through
a massive restructuring. As part of the restructuring process, Abu Dhabi
agreed to take responsibility for BCCI's losses, Price Waterhouse agreed
to certify BCCI's books for another year, and Abu Dhabi, Price Waterhouse,
the Bank of England, and BCCI agreed to keep all information concerning BCCI's
frauds and other problems secret from BCCI's one million depositors, as well
as from U.S. regulators and law enforcement, to prevent a run on the bank.
After the Federal Reserve was advised by the New York District Attorney of
possible nominee arrangements involving BCCI and First American, Abu Dhabi,
in an apparent effort to gain the Federal Reserve's acquiescence in BCCI's
proposed restructuring, provided limited cooperation to the Federal Reserve,
including access to selected documents. The cooperation did not extend to
permitting the Federal Reserve open access to all BCCI documents, or substantive
communication with key BCCI officials held in Abu Dhabi, such as BCCI's former
president, Swaleh Naqvi. That access ended with the closure of BCCI July
5, 1991.
From November, 1990 through the present, Abu Dhabi has failed to provide
documents and witnesses to U.S. law enforcement authorities and to the Congress,
despite repeated commitments to do so. Instead, it has actively prevented
U.S. investigators from having access to vital information necessary to
investigate BCCI's global wrongdoing.
The proposed agreement between Abu Dhabi and BCCI's liquidators to settle
their claims against one another contains provisions which could have the
consequence of permitting Abu Dhabi to cover up any wrongdoing it may have
had in connection with BCCI.
There is some evidence that the Sheikh Zayed may have had a political agenda
in agreeing to the involvement of members of the Abu Dhabi royal family and
its investment authority in purchasing shares of Financial General Bankshares,
then of CCAH/First American. This evidence is offset, in part, by testimony
that Abu Dhabi share purchases in the U.S. bank were done at Abedi's request
and did not represent an actual investment by Abu Dhabi until much later.
12. BCCI MADE EXTENSIVE USE OF THE REVOLVING DOOR AND POLITICAL INFLUENCE
PEDDLING IN THE UNITED STATES TO ACCOMPLISH ITS GOALS.
BCCI's political connections in Washington had a material impact on its ability
to accomplish its goals in the United States. In hiring lawyers, lobbyists
and public relations firms in the United States to help it deal with its
problems vis a vis the government, BCCI pursued a strategy that it had practiced
successfully around the world: the hiring of former government officials.
BCCI's and its shareholders' cadre of professional help in Washington D.C.
included, at various times, a former Secretary of Defense (Clark Clifford),
former Senators and Congressmen (John Culver, Mike Barnes), former federal
prosecutors (Larry Wechsler, Raymond Banoun, and Larry Barcella, a former
State Department Official (William Rogers), a former White House aide (Ed
Rogers), a current Presidential campaign deputy director (James Lake), and
former Federal Reserve Attorneys (Baldwin Tuttle, Jerry Hawke, and Michael
Bradfield). In addition, BCCI solicited the help of Henry Kissinger, who
chose not to do business with BCCI but made a referral of BCCI to his own
lawyers.
At several key points in BCCI's activities in the U.S., the political influence
and personal contacts of those it hired had an impact in helping BCCI accomplish
its goals, including in connection with the 1981 CCAH acquisition of FGB
and the handling and aftermath of BCCI's plea agreement in Tampa in 1990.
The political connections of BCCI's U.S. lawyers and lobbyists were critical
to impeding Congressional and law enforcement investigations from 1988 through
1991, through a variety of techniques that included impugning the motives
and integrity of investigators and journalists, withholding subpoenaed documents,
and lobbying on capital hill to protect BCCI's reputation and discourage
efforts to close the bank down in the United States.
13. BCCI'S PUBLIC RELATIONS FIRM SMEARED PEOPLE WHO WERE TELLING THE TRUTH
AS PART OF ITS WORK FOR BCCI.
When Hill and Knowlton accepted BCCI's account in October, 1988, its partners
knew of BCCI's reputation as a "sleazy" bank, but took the account anyway.
In 1988 and 1989, Hill and Knowlton assisted BCCI with an aggressive public
relations campaign designed to demonstrate that BCCI was not a criminal
enterprise, and to put the best face possible on the Tampa drug money laundering
indictments. In so doing, it disseminated materials unjustifiably and unfairly
discrediting persons and publications who were telling the truth about BCCI's
criminality.
Important information provided by Hill and Knowlton to Capitol Hill and provided
by First American to regulators concerning the relationship between BCCI
and First American in April, 1990 was false. The misleading material represented
the position of BCCI, First American, Clifford and Altman concerning the
relationship, and was contrary to the truth known by BCCI, Clifford and Altman.
Hill and Knowlton's representation of BCCI was within the norms and standards
of the public relations industry, but raises larger questions as to the
relationship of those norms and standards to the public interest.
14. BCCI ACTIVELY SOLICITED THE FRIENDSHIPS OF MAJOR U.S. POLITICAL FIGURES,
AND MADE PAYMENTS TO THESE POLITICAL FIGURES, WHICH IN SOME CASES MAY HAVE
BEEN IMPROPER.
Beginning with Bert Lance in 1977, whose debts BCCI paid off with a $3.5
million loan, BCCI, BCCI nominees, and top officials of BCCI systematically
developed friendships and relationships with important U.S political figures.
While those which are publicly known include former president Jimmy Carter,
Jesse Jackson, and Andrew Young, the Subcommittee has received information
suggesting that BCCI's network extended to other U.S. political figures.
The payments made by BCCI to Andrew Young while he was a public official
were at best unusual, and by all appearances, improper.
15. BCCI'S COMMODITIES AFFILIATE, CAPCOM, ENGAGED IN BILLIONS OF DOLLARS
OF LARGELY ANONYMOUS TRADING IN THE US WHICH INCLUDED A VERY SUBSTANTIAL
LEVEL OF MONEY LAUNDERING, WHILE CAPCOM SIMULTANEOUSLY DEVELOPED SIGNIFICANT
TIES TO IMPORTANT U.S. TELECOMMUNICATIONS INDUSTRY EXECUTIVES AND FOREIGN
INTELLIGENCE FIGURES.
BCCI's commodities affiliate, Capcom, based in Chicago, London and Cairo,
was principally staffed by former BCCI bankers, capitalized by BCCI and BCCI
customers, and owned by BCCI, BCCI shareholders, and front-men. Capcom employed
many of the same practices as BCCI, especially the use of nominees and front
companies to disguise ownership and the movement of money. Four U.S. citizens
-- none of whom had any experience or expertise in the commodities markets
-- played important and varied roles as Capcom front men in the United States.
While investigation information concerning Capcom is incomplete, its activities
appear to have included misappropriation of BCCI assets; the laundering of
billions of dollars from the Middle East to the US and other parts of the
world; and the siphoning of assets from BCCI to create a safe haven for them
outside of the official BCCI empire.
Capcom's majority shareholders, Kamal Adham and A.R. Khalil, were both former
senior Saudi government officials and successively acted as Saudi Arabia's
principal liaisons to the Central Intelligence Agency during the 1970's and
1980's.
Its U.S. front men included Robert Magness, the CEO of the largest U.S. cable
telecommunications company, TCI; a vice-President of TCI, Larry Romrell;
and two other Americans, Kerry Fox and Robert Powell, with long-standing
business interests in the Middle East. Magness, Romrell and Fox received
loans from BCCI for real estate ventures in the U.S., and Magness and Romrell
discussed numerous business ventures between BCCI and TCI, some of which
involved the possible purchase of U.S. telecommunications stock and substantial
lending by BCCI.
Commodities regulators with the responsibility for investigating Capcom showed
little interest in conducting a thorough investigation of its activities,
and in 1989 allowed Capcom to avoid such an investigation through agreeing
to cease doing business in the United States.
The Subcommittee could not determine whether BCCI, Capcom, or their shareholders
or agents actually acquired equity interests in the U.S. cable industry and
believes further investigation of matters pertaining to Capcom is essential.
16. INVESTIGATIONS OF BCCI TO DATE REMAIN INCOMPLETE, AND MANY LEADS CANNOT
BE FOLLOWED UP, AS THE RESULT OF DOCUMENTS BEING WITHHELD FROM US INVESTIGATORS
BY THE BRITISH GOVERNMENT, AND DOCUMENTS AND WITNESSES BEING WITHHELD FROM
US INVESTIGATORS BY THE GOVERNMENT OF ABU DHABI.
Many of the specific criminal transactions engaged in by BCCI's customers
remain hidden from investigation as the result of bank secrecy laws in many
jurisdictions, British national security laws, and the holding of key witnesses
and documents by the Government of Abu Dhabi. Documents pertaining to BCCI's
use to finance terrorism, to assist the builders of a Pakistani nuclear bomb,
to finance Iranian arms deals, and related matters have been sealed in the
United Kingdom by British intelligence and remain unavailable to U.S.
investigators. Many other basic matters pertaining to BCCI's criminality,
including any list that may exist of BCCI's political payoffs and bribes,
remain sequestered in Abu Dhabi and unavailable to U.S. investigators.
Many investigative leads remain to be explored, but cannot be answered with
devoting substantial additional sources that to date no agency of government
has been in a position to provide.
Unanswered questions include, but are not limited to, the relationship between
BCCI and the Banco Nazionale del Lavoro; the alleged relationship between
the late CIA director William Casey and BCCI; the extent of BCCI's involvement
in Pakistan's nuclear program; BCCI's manipulation of commodities and securities
markets in Europe and Canada; BCCI's activities in India, including its
relationship with the business empire of the Hinduja family; BCCI's relationships
with convicted Iraqi arms dealer Sarkis Sarkenalian, Syrian drug trafficker,
terrorist, and arms trafficker Monzer Al-Kassar, and other major arms dealers;
the use of BCCI by central figures in the alleged "October Surprise," BCCI's
activities with the Central Bank of Syria and with the Foreign Trade Mission
of the Soviet Union in London; its involvement with foreign intelligence
agencies; the financial dealingst of BCCI directors with Charles Keating
and several Keating affiliates and front-companies, including the possibility
that BCCI related entities may have laundered funds for Keating to move them
outside the United States; BCCI's financing of commodities and other business
dealings of international criminal financier Marc Rich; the nature, extent
and meaning of the ownership of other major U.S. financial institutions by
Middle Eastern political figures; the nature, extent, and meaning of real
estate and financial investments in the United States by major shareholders
of BCCI; the sale of BCCI affiliate Banque de Commerce et Placement in Geneva,
to the Cukorova Group of Turkey, which owned an entity involved in the BNL
Iraqi arms sales, among others.
The withholding of documents and witnesses from U.S. investigators by the
Government of Abu Dhabi threatens vital U.S. foreign policy, anti-narcotics
and money laundering, and law enforcement interests, and should not be tolerated.
SUMMARY OF LEGISLATIVE RECOMMENDATIONS
1. THE SUBCOMMITTEE RECOMMENDS THAT THE UNITED STATES DEVELOP A MORE AGGRESSIVE
AND COORDINATED APPROACH TO INTERNATIONAL FINANCIAL CRIME, AND TO MOVE FURTHER
AGAINST FOREIGN PRIVACY AND CONFIDENTIAL LAWS THAT PROTECT CRIMINALS.
2. THE SUBCOMMITTEE RECOMMENDS THAT THE JUSTICE DEPARTMENT RECONSIDER THE
POLICIES AND PRACTICES THAT LED TO ITS INEFFECTIVENESS IN INVESTIGATING AND
PROSECUTING BCCI, AND IMPAIRED ITS ABILITY TO COOPERATE WITH OTHER INVESTIGATIONS
OF BCCI BEING CONDUCTED BY THE FEDERAL RESERVE, NEW YORK DISTRICT ATTORNEY,
AND THE SENATE.
3. THE SUBCOMMITTEE RECOMMENDS THAT THE CENTRAL INTELLIGENCE AGENCY AND STATE
DEPARTMENT UPGRADE THE TRACKING OF FOREIGN FINANCIAL INSTITUTIONS AND ACTIVITIES,
AND THE DISSEMINATION OF INFORMATION CONCERNING SUCH INSTITUTIONS.
4. THE SUBCOMMITTEE RECOMMENDS THAT THE CONGRESS CONSIDER WHETHER ADDITIONAL
OVERSIGHT MECHANISMS ARE NECESSARY TO ENSURE THE CIA'S ACCOUNTABILITY ON
THE PROVISION OF INFORMATION.
5. THE SUBCOMMITTEE RECOMMENDS THAT FEDERAL AGENCIES IMPOSE NEW REQUIREMENTS
ON FOREIGN AUDITORS TO PROTECT U.S. INTERESTS IN ANY CASE IN WHICH ANY SUCH
AGENCY IS RELYING ON AN AUDIT CERTIFIED BY A FOREIGN AUDITOR. AT MINIMUM,
THIS SHOULD REQUIRE FOREIGN AUDITORS WHOSE CERTIFICATIONS ARE USED BY
INSTITUTIONS DOING BUSINESS IN THE U.S. AGREE TO SUBMIT THEMSELVES TO U.S.
LAWS.
6. THE SUBCOMMITTEE RECOMMENDS THAT THE PRESIDENT AND THE SECRETARY OF STATE
ADVISE THE GOVERNMENT OF ABU DHABI THAT ITS WITHHOLDING OF DOCUMENTS AND
WITNESSES PERTAINING TO BCCI FROM U.S. FEDERAL LAW ENFORCEMENT INVESTIGATORS,
THE FEDERAL RESERVE, THE NEW YORK DISTRICT ATTORNEY AND THE CONGRESS THREATENS
VITAL U.S. INTERESTS AND WILL NOT BE TOLERATED.
7. FURTHER ATTENTION NEEDS TO BE GIVEN TO THE PROBLEM OF THE REVOLVING DOOR
IN WASHINGTON, AND THE IMPACT ON THE REGULATORY PROCESS AND ON LAW ENFORCEMENT
OF POLITICAL INFLUENCE IN WASHINGTON. THE SUBCOMMITTEE RECOMMENDS THE
CONSIDERATION OF LEGISLATING A FEDERAL STATUTORY CODE OF CONDUCT FOR ATTORNEYS
WHO PRACTICE BEFORE FEDERAL AGENCIES.
8. THE SELF-REGULATION OF THE U.S COMMODITIES MARKETS BY THE COMMODITIES
FUTURES TRADING COMMISSION, THE CHICAGO BOARD OF TRADE, AND THE CHICAGO
MERCANTILE EXCHANGE IS INADEQUATE TO PROTECT THOSE MARKETS AGAINST MONEY
LAUNDERING INVOLVING TRADES
FROM ABROAD. THE SUBCOMMITTEE RECOMMENDS THAT THE EXCHANGES MAKE MONEY LAUNDERING
ILLEGAL, AND DEMAND THAT THIS REQUIREMENT BE ACCEPTED BY FOREIGN COMMODITIES
EXCHANGES WITH WHOM THEY DO BUSINESS, AS A CONDITION OF ACCESS TO US EXCHANGES.
9. THE SUBCOMMITTEE RECOMMENDS THAT FURTHER STEPS BE TAKEN TO INSURE ADEQUATE
ACCOUNTABILITY OF FOREIGN FINANCIAL INSTITUTIONS DOING BUSINESS IN THE UNITED
STATES, INCLUDING REQUIRING FOREIGN BANKS FORM SEPARATELY CAPITALIZED HOLDING
COMPANIES IN THE UNITED STATES AS A CONDITION OF LICENSE AND THE CONSIDERATION
BY THE FEDERAL RESERVE OF ESTABLISHMENT A MINIMUM STANDARD FOR CONSOLIDATED
REGULATION THAT EXCLUDES BANK REGULATORY HAVENS.
10. THE SUBCOMMITTEE RECOMMENDS THAT FOREIGN INVESTORS WHO PURCHASE SUBSTANTIAL
SHARES OF U.S. BUSINESSES BE REQUIRED TO APPEAR PERSONALLY IN THE UNITED
STATES AS INSURANCE THAT THE FOREIGN INVESTOR IS NOT ACTING AS A NOMINEE
FOR SOMEONE ELSE.
11. TURF WARS CONTINUE TO SEVERELY DAMAGE THE ABILITY OF LAW-ENFORCEMENT
AGENCIES IN THE UNITED STATES TO DO THEIR JOB. THE SUBCOMMITTEE RECOMMENDS
THE ESTABLISHMENT OF A COMMITTEE OF LAW ENFORCEMENT OFFICIALS WHOSE JOB IT
IS TO CONDUCT OVERSIGHT OF, PREVENT, AND RESPOND TO FAILURES OF COOPERATION
IN LAW ENFORCEMENT.
12. THE SUBCOMMITTEE RECOMMENDS THAT A STATUTORY MECHANISM FOR THE RECEIPT
BY CONGRESS OF FOREIGN FINANCIAL INFORMATION BE ESTABLISHED.
The ties that bind: Barclays, a bin Laden relative, Carlyle and the BCCI
boys
By Kevin Dowling
November 3, 2001
Barclays plc is a "core investor" in a merchant bank set up by Osama bin
Laden's brother-in-law on Bergerac's beat Guernsey in the Channel Islands.
Yemeni tycoon Khalid bin Mahfouz established the Middle East Capital Group
(MECG) on the tax-haven island in 1996, only to be placed under house arrest
in Saudi Arabia three years later.
In the wake of the US Embassy bombings in Nairobi and Dar-es-Salaam, Secretary
of State Madeleine Albright told Saudi defence minister Prince Sultan that
Mahfouz had channelled tens of millions into terrorist accounts in London
and New York.
The maverick financier was no stranger to intrigue he was the principal
shareholder in BCCI ("the Bank of Criminals and Cocaine International") when
it perpetrated the biggest fraud in financial history.
Mahfouz had escaped unscathed in London and managed to plea-bargain his way
out of civil and criminal liabilities amounting to more than $10 billion
by agreeing to a $225 million settlement with prosecutors in New York.
But when a Saudi government audit found another $2 billion missing from the
treasury of the world's largest private bank the $21 billion National Commercial
Bank (NCB), which Mahfouz owned Khalid was forced to sell his shares and
take early retirement.
U.S. intelligence services want to know how much of that missing money went
to front groups secretly funneling money to Osama bin Laden's al-Qaeda
organization.
These are alleged to include:
The London-based Advice and Reformation Committee.
An Africa aid group called Blessed Relief, whose directors included Mr. Mahfouz's
son;
A Kenya branch of Help Africa People, run by several men later convicted
or indicted for the U.S. embassy bombings in Kenya and Tanzania;
The International Islamic Relief Organization, linked to terrorist bomb plots
in the Philippines and India;
The Kenya branch of war and famine relief group Mercy International, where
key evidence used to convict the embassy bombers was found;
A host of other Islamic aid groups working from Afghanistan to Kosovo, some
of which have already been named by U.S. President George W. Bush as terrorist
fronts.
Unable to travel abroad the Irish Government said last month that the passport
he bought from them for £20 million in 1994 has expired, and he won't
be getting another Khalid is living in luxury at a military hospital in the
northern city of Taef, where he is allegedly undergoing treatment for a "drug
problem."
The Saudis have allowed control of the NCB to pass to another family member,
the current CEO Mohammed bin Mahfouz.
Two NCB directors, Sami M. Baarama and Omar Bajamal, represent the Mahfouz
family interests on the Guernsey company's board.
Baarama was director of the NCB's International Division and its Investment
Services Division when the money disappeared.
He now sits on the Saudi bank's Executive Management Committee and is advisor
to Mohammed bin Mahfouz.
Baarama his name is often spelled "Baarma" in English is also chairman of
Pakistan's Prime Commercial Bank, which Khalid bin Mahfouz owns, and a director
of Lebanon's Credit Libanaise, which the family controls.
Intelligence sources state that he is a member of one of the $12.5 billion
Carlyle Group's international advisory boards.
John Major, who was premier when BCCI's collapse rocked the City in 1991,
is Carlyle's European chairman. Lord Geoffrey Howe, John Major's former Home
Secretary and Deputy PM, sits on its European board.
Former members of the Reagan and Bush administrations who have been publicly
associated with key BCCI players including ex-President George Bush himself
have built Carlyle into the world's biggest private equity company and one
of America's largest defence contractors.
Baarama's alleged role as a fixer for Carlyle and the level of the Mahfouz
family's investments in the US company. if any, cannot be independently verified
as the privately-held company is not required to provide the information
to the Securities and Exchange Commission.
Carlyle closed down its web site on October 4, denying public access to what
little information that contained.
This followed articles on 27 and 28 September in The Wall Street Journal
reporting that the Saudi BinLadin Group (SBG) does have investments in Carlyle,
and has been earning 40 per cent per annum from them since 1995.
Henry M. Sarkissian, an Executive Board Member of SBG, sits on the Middle
East Capital Group's British offshore board alongside Baarama and Barclays
appointee Elie Khouri.
So what have the Bin Ladin-Mafouz clan been up to on Jim Bergerac's beat?
US and British forensic accountants are likely to run into a brick wall if
they try to find out.
William P. Simpson, a partner in Guernsey's oldest law company, Ozannes,
is a director of the Middle East Capital Group.
Mr. Simpson is a shareholder in the Legis Group of Guernsey and the British
Virgin Islands he has also worked in the Cayman Islands and has spent his
professional lifetime concealing the affairs of the wealthy from the Bank
of England, the Inland Revenue and international authorities.
A 400-page French parliamentary report published on Wednesday, 10 October,
contains a blistering attack on the financial centres that have thrived off
Britain's shores, including the Isle of Man, Jersey and Guernsey, and
Gibraltar.
"It is high time that Europe got worried about sheltering in its midst these
veritable machines that launder criminal money," it said.
Bin Laden's terrorist financial network bears a striking similarity to that
of the collapsed BCCI bank, according to the report.
Khalid bin Mahfouz, with whom Barclays went into business five years after
the Bank of England shut BCCI, is directly linked to Osama Bin Laden through
banks, holding companies, foundations and charities, at least one of which,
the International Development Foundation, has its headquarters in London,
the parliamentarians say.
Their investigation is based on interviews with senior Metropolitan police
officers, leading City regulators and European judges.
"Those responsible for combating financial crime are depressed and discouraged
by an archaic and dysfunctional system," said the author, Arnaud Montebourg,
a Socialist MP.
"The British authorities must realise that they have fallen badly behind."
SBG's spindoctors have spent the past month trying to distance their companies
from the world's Most Wanted Man by denouncing Osama and the murderous jihad
he stands for.
In the light of recent events, their efforts seemed to be unravelling fast.
Swiss Federal investigators have subjected the terrorist's half-brother Yeslam
to several gruelling interrogations over the past two weeks.
Yeslam, a frequent visitor to Britain, runs the Geneva-based Saudi Investment
Company (SICO), an international holding company that manages SBG's affairs
in Europe.
He was granted a Swiss passport in May despite unprecedented advice by the
Government of the Canton of Geneva, which "after mature reflection and on
the basis of troublesome matters which have never been denied by anyone,"
advised against giving him one.
A "first secretary at the American mission in Geneva" reportedly offered
to help his successful appeal to the Canton's Grand Council against the local
government's decision.
The controversy was reignited, however, when Le Monde reported on 26 September
that one of Yeslam's companies, Avcon Business Jets SA, had offered training
courses for pilots at the same Florida flying school which several of the
9–11 kamikazes attended.
In a rare public statement, the business head of the Bin Ladin family explained
that he had only invested in business aviation "because I am passionately
fond of flying, tennis, skiing and the cinema."
Jürg Brand, one of Yeslam's lawyers and business partners, says that
Avcon "is on the point of being liquidated."
SICO, the Bin Ladin's European holding company, is also being put to sleep.
Its capital has been reduced by 90 per cent.
"The reduction is simply due to the fact that SICO, which was a financial
company, has become a services company," a company statement said.
What impact these seismic changes in the financial landscape will have on
MECG and Barclays shareholders and customers is still unclear.
A French intelligence report unearthed by PBS's investigative programme Frontline
and posted on the Internet indicates that Osama is not the first of the Bin
Ladin brothers to engage in terrorism
In 1979, Moslem Brotherhood fanatics stormed the Grand Mosque at Mecca, using
SBG trucks to smuggle in weapons.
Hundreds of innocent pilgrims were killed in a ten-day battle for control
of Islam's holiest site before French anti-terrorist troops put down the
insurrection.
"One of the bin Laden sons, Mahrous, was actually arrested on account of
his ties with the Islamists, but was later freed," says the after-battle
report.
"He is currently manager of the group's Medina branch.
"The reason is as follows: after studies in England, where he had kept company
with Fadli (son of the ex-sultan of the Abdin region in South Yemen, now
leader of a Yemeni fundamentalist group and arrested in Aden last January),
Mahrous struck up friendships with a group of Syrian Moslem Brothers in exile
in Saudi Arabia.
"The episode demonstrated the strength of the ties between the royal family
and the bin Laden Group.
"Had it been some other group, there is no doubt that Mahrous whether accomplice
or patsy would have been thrown into prison and the group barred from further
economic activity in the kingdom, the sentence serving as a warning to others.
This was not the case."