Bank of Crooks and Criminals International?
by Josh Rodin
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THE BANK OF CROOKS AND CRIMINALS INTERNATIONAL?
By JOSH RODIN
New York Times columist William Safire calls it the
``megascandal of the underworld bank.'' Time magazine describes it as ``the
largest corporate criminal enterprise ever, the biggest Ponzi
scheme, the most pervasive money-laundering operation and
financial supermarket ever created.'' And New York District Attorney Robert
Morganthau called it simply ``the largest bank fraud in world
financial history.''
With no end to the superlatives, the B.C.C.I. story just keeps
growing. The latest installment in the ever-widening scandal
involves reports that the Justice Department failed to investigate
and prosecute the bank's officials despite strong evidence of
wrongdoing. Sources claim that the Justice Department did not
follow up on leads, including eyewitness accounts that the bank
was involved in widespread corrupt activities, including money
laundering, drug trafficking, illegal arms deals, fraud,
embezzlement, extortion and bribery.
The Senate Foreign Relations Subcommittee on Terrorism,
Narcotics, and International Operations reopened hearings on the scandal
Aug. 1. Witnesses included former United States Customs
Commissioner William von Raab and former Senate Special Counsel Jack A.
Blum, both of whom have extensive experience investigating the bank.
Chaired by Sen. John Kerry of Massachusetts, the subcommittee's
interest in the bank's shady dealings with covert operations and
the drug trade dates back to 1986.
Von Raab, a Republican, was customs commissioner from 1982 to
1989. He criticized the Justice Department's handling of the B.C.C.I.
drug money-laundering case in Tampa, Fla., which ended in
January 1990 with a plea bargain described by von Raab as a ``shameless
agreement.'' The deal resulted in a $15-million fine against the
bank, but the penalty ``less than the bank had made from its
money-laundering activitees,'' Von Raab said.
Von Raab was dismissed from his duties because his superiors
considered him ``overzealous'' and wanted him ``cut out'' of the
B.C.C.I. investigation, he said.
Blum testified about his own efforts to expose the bank, including
risking his life to interview dangerous informants while secretly
recording the conversations. ``I had taken considerable risk and
gone to great lengths to put serious evidence in front of the
Department of Justice,'' he said. But his efforts were not strong
enough to counteract the ``high-priced anesthesia'' of B.C.C.I.
lobbyists which effectively paralyzed the investigation. Blum
called the Justice Department's handling of the case ``worse than
abysmal.''
Frustrated with the lack of response from Justice, Blum took his
evidence to Manhattan District Attorney Robert Morganthau, who
metwith further resistance. Says Morganthau: ``We have had no
cooperation from the Justice Department. . . . In fact, they are
impeding our investigation, and Justice Department representatives
are asking witnesses not to cooperate with us.''
Following the plea bargain in Tampa, Gerald Lewis, the Florida
state comptroller of the department of banking and finance, decided
to close B.C.C.I. operations in the state by letting its license
expire. One month before the expiration, he received a letter from
the Justice Department asking him to back off. ``We are . . .
requesting that B.C.C.I. be permitted to operate in your
jurisdiction with the understanding that certain accounts may be
maintained by the bank at the request of the Department of Justice
which otherwise would be closed to avoid legal and regulatory
violations,'' the letter said.
Investigators believe the lack of action by Justice may be
attributed to the clandestine relationship between the bank and
United States intelligence agencies. In addition to the C.I.A., the
Defense Intelligence Agency and the National Security Council had
secret accounts at B.C.C.I. to fund covert operations.
Further investigations revealed that over $18 million in arms money
flowed through B.C.C.I. to the Nicaraguan contras. The United
States Attorney in Tampa who negotiated the $15-million-dollar
slap on the wrist for B.C.C.I. was Robert Genzman, formerly
Republican counsel for the Congressional Iran-Contra investigating
committees.
In addition to its involvement in C.I.A. operations, the bank may
have been running covert actions of its own. Time magazine
repported the existence of a clandestine ``black network'' within B.C.C.I.
which ``used sophisticated spy equipment and techniques, along
with bribery, extortion, kidnapping and even, by some accounts,
murder.''
According to Time, ``the C.I.A. may have used B.C.C.I. as more
than an undercover banker: U.S. agents collaborated with the black
network in several operations, according to a B.C.C... black-
network `officer' who is now a secret government witness. Sources
have told investigators that B.C.C.I. worked closely with Israel's
spy agencies and other Western intelligence groups as well,
especially in arms deals. The bank also maintained cozy
relationships with international terrorists, say investigators who
discovered suspected terrorist accounts for Libya, Syria and the
Palestine Liberation Organization in B.C.C.I.'s London offices.''
Perhaps the most mysterious aspect of the investigation involved
B.C.C.I. bank records from Panama City relating to General
Noriega which simply ``disappeared'' in transit to Washington while under
heavy guard by the Drug Enforcement Administration. After an
internal investigation, the D.E.A. said it had no idea what
happened to the documents.
Continuing investigations by the C.I.A., Justice Department,
Federal Reserve and various Congressional committees promise to
reveal many more oordid details of the bank's illicit dealings, but
some questions about ``the world's sleaziest bank'' may forever
remain unanswered.
Christic Institute, 1991
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