It has been suggested that Clark_Clifford#Bank_of_Credit_and_Commerce_International be merged into this article or section. (Discuss)

The Bank of Credit and Commerce International (BCCI) was a major international bank founded in Pakistan^{[citation needed]} in 1972. At its peak, it operated in 78 countries, had over 400 branches, and claimed assets of $25 billion. Image File history File links Mergefrom. ... Clark McAdams Clifford (December 25, 1906 – October 10, 1998) was a highly influential American lawyer who served Presidents Truman, Kennedy, Johnson and Carter, serving as Secretary of Defense for Johnson. ... For other uses, see Bank (disambiguation). ...

BCCI became the focus in 1991 of the world's worst financial scandal and what was called a "$20-billion-plus heist".^[1] It was found by regulators in the United States and the United Kingdom to be involved in money laundering, bribery, support of terrorism,^[2] arms trafficking, the sale of nuclear technologies, the commission and facilitation of tax evasion, smuggling, illegal immigration, and the illicit purchases of banks and real estate. The bank was found to have at least $13 billion unaccounted for. Money laundering is the practice of engaging in financial transactions in order to conceal the identity, source and destination of the money in question. ... Bribery is a crime implying a sum or gift given alters the behaviour of the person in ways not consistent with the duties of that person. ... Terrorist redirects here. ... To meet Wikipedias quality standards, this article or section may require cleanup. ... This article contrasts tax evasion, tax avoidance, tax resistance and tax mitigation. ... This article does not cite any references or sources. ... This article is about illegal immigration. ... Real estate is a legal term that encompasses land along with anything permanently affixed to the land, such as buildings. ...

Investigators in the U.S. and the UK revealed that BCCI had been "set up deliberately to avoid centralized regulatory review, and operated extensively in bank secrecy jurisdictions. Its affairs are extraordinarily complex. Its officers were sophisticated international bankers whose apparent objective was to keep their affairs secret, to commit fraud on a massive scale, and to avoid detection";^[2] BCCI organized its own intelligence network, diplomatic corps, and shipping & trading companies.

The liquidators, Deloitte & Touche, filed a lawsuit against Price Waterhouse and Ernst & Young, the bank's auditors, which was settled for $175 million in 1998. A further lawsuit against the emir of Abu Dhabi, a major shareholder, was launched in 1999 for around $400 million. BCCI creditors also instituted a $1 billion suit against the Bank of England as a regulatory body. After a nine-year struggle due to the Bank's statutory immunity, the case went to trial in January 2004. However in November 2005 liquidators Deloitte dropped any action against the Bank of England as it was no longer considered in the best interests of the creditors after a High Court ruling. In law, a liquidator is the officer appointed when a company goes into winding-up or liquidation who has responsibility for collecting in all of the assets of the company and settling all claims against the company before putting the company into dissolution. ... Deloitte Touche Tohmatsu is one of the Big Four auditors. ... ... Ernst & Young is one of the largest professional services firms in the world, and one of the Big Four auditors, along with PricewaterhouseCoopers (PwC), Deloitte Touche Tohmatsu (Deloitte) and KPMG. Ernst & Young is a global organization consisting of many member firms. ... Abu Dhabi or Abu Zaby (Arabic language: أبوظبي) is the largest of the seven emirates that comprise the United Arab Emirates and was also the largest of the former Trucial States. ... Headquarters Coordinates , , Governor Mervyn King Central Bank of United Kingdom Currency Pound sterling ISO 4217 Code GBP Base borrowing rate 5. ...

History

BCCI's founder, Agha Hasan Abedi, started the bank in Pakistan in 1972. Abedi had previously set up the United Bank of Pakistan in 1959. Following the nationalization of United Bank in 1971 he sought to create a new supranational banking entity. BCCI was created with capital from Sheikh Zayed bin Sultan Al Nahayan, emir of Abu Dhabi in the United Arab Emirates, Bank of America (25%) and, allegedly, the CIA^[3]. It is claimed that the CIA were seeking a funding route for the Afghan Mujahideen, similar to the Investors Overseas Service and the Nugan Hand Bank in the 1970s^{[citation needed]}. However, the vast majority of BCCI's assets were initially from Abu Dhabi. Agha Hasan Abedi (May 14, 1922, Lucknow - Aug 5, 1995, Karachi) was a leading banker in Pakistan. ... Sheikh Zayed Sheikh Zayed bin Sultan Al Nahyan (Arabic:الشيخ زايد بن سلطان أل نهيان)‎, (1918 — 2 November 2004), the principal architect of the seven United Arab Emirates, was the moderate... Abu Dhabi or Abu Zaby (Arabic language: أبوظبي) is the largest of the seven emirates that comprise the United Arab Emirates and was also the largest of the former Trucial States. ... Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. ... The CIA Seal The Central Intelligence Agency (CIA) is an American intelligence agency, responsible for obtaining and analyzing information about foreign governments, corporations, and individuals, and reporting such information to the various branches of the U.S. Government. ... Mujahideen (Arabic: , ; Turkish: , literally strugglers) is a term for Muslims fighting in a war or involved in any other struggle. ... Investors Overseas Services (IOS) was founded in 1955 by financier Bernard Cornfeld. ... Nugan Hand Bank was an Australian merchant bank that collapsed in 1980 in sensational circumstances amongst rumors of CIA involvement. ...

BCCI expanded rapidly in the 1970s, pursuing asset growth over profits, seeking high net-worth individuals and regular large deposits. The company itself divided into BCCI Holdings with the bank under that split into BCCI S.A (Luxembourg) and BCCI Overseas (Grand Cayman). BCCI also acquired parallel banks through acquisitions: buying the Banque de Commerce et Placements (BCP) of Geneva in 1976, and creating KIFCO (Kuwait International Finance Company), Credit & Finance Corporation Ltd, and a series of Cayman-based companies held together as ICIC (International Credit and Investment Company Overseas, International Credit and Commerce [Overseas], etc.). Overall, BCCI expanded from 19 branches in five countries in 1973 to 27 branches in 1974, to 108 branches in 1976, with assets growing from $200 million to $1.6 billion. This growth caused extensive underlying capital problems. By 1977, BCCI was in sufficiently dire financial straits that the Guardian later wrote that at this time "BCCI, founded in 1975, was almost certainly insolvent by 1977"^[4] - it was using cash from deposits to fund operating expenses, rather than making investments, taking on the attributes of a Ponzi scheme. Nevertheless BCCI continued to expand, moving into the African markets in 1979, and Asia in the early 1980s. They were among the first foreign banks awarded a license to operate in the Chinese Special Economic Zone Shenzhen. Some of China's largest state banks were depositors in BCCI's Shenzhen branch. Grand Cayman from space, April 1994 Grand Cayman is the largest of the three Cayman Islands at about 196 km² and contains the capital George Town. ... Geneva (pronunciation //; French: Genève //, German:   //, Italian: Ginevra //, Romansh: Genevra) is the second most populous city in Switzerland (after Zürich), and is the most populous city of Romandy (the French-speaking part of Switzerland). ... The Guardian is a British newspaper owned by the Guardian Media Group. ... A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns (profits) to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business. ... This article does not cite any references or sources. ... Shenzhen is a sub-provincial city of Guangdong province in southern China. ...

By 1980, BCCI was reported to have assets of over $4 billion with over 150 branches in 46 countries. Bank of America was "bewildered"^[5] with BCCI and reduced its holding in 1980, and the company came to be held by a number of groups, with ICIC owning 70%. By 1989, ICIC's shareholding was reduced to 11% with Abu Dhabi groups holding almost 40%, however large numbers of shares were held by BCCI nominees. The internal structure of the bank was unusual. There was rigid compartmentalization and there were 248 managers and general managers and only two people above them, Abedi and the CEO Swaleh Naqvi, F Lee Bailey, and Florida state prosecutor Richard Gerstein were the directors of CenTrust Federal Savings Bank, a failed satellite of the BCCI. Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. ... Bailey made the cover of Time in the late 70s for defending Patty Hearst Francis Lee Bailey, best known as F. Lee Bailey (born 1933), is a American lawyer. ...

BCCI had an uncommon annual auditing system: Price Waterhouse were the accountants for BCCI Overseas, while Ernst & Young audited BCCI and BCCI Holdings (London and Luxembourg). Other companies such as KIFCO and ICIC were audited by neither. In October 1985, the Bank of England and the Central Bank of Luxembourg ordered BCCI to change to a single accountant, alarmed at reported BCCI losses on the commodities and financial markets. Price Waterhouse became the sole accountants in 1987.

In 1988, BCCI was implicated in a drug-money-laundering scheme based in Tampa, Florida: the C-Chase case. The BCCI was called the CIA’s money-laundering facility. BCCI pleaded guilty in 1990, but only on the grounds of respondeat superior. Respondeat superior, Latin for let the master answer, is a legal doctrine which states that an employer is responsible for employee actions performed within the course of the employment. ...

In 1990, a Price Waterhouse audit of BCCI revealed an unaccountable loss of hundreds of millions of dollars. The bank approached Sheikh Zayed, who made good the loss in exchange for an increased shareholding of 78%. Much of BCCI's documentation was then also transferred to Abu Dhabi. Sheikh Zayed Sheikh Zayed bin Sultan Al Nahyan (Arabic:الشيخ زايد بن سلطان أل نهيان)‎, (1918 — 2 November 2004), the principal architect of the seven United Arab Emirates, was the moderate...

Philanthropic contributions

The bank established the Third World Foundation in London, which published the widely circulated Third World Quarterly and paid special attention to the promotion of the Urdu language and literature through the Urdu Markaz located in London. Urdu ( , , trans. ...

Sandstorm report

In March 1991, the Bank of England asked Price Waterhouse to carry out an inquiry. On June 24, 1991, using the codename "Sandstorm" for BCCI, Price Waterhouse submitted the Sandstorm report showing that BCCI had engaged in "widespread fraud and manipulation". ... is the 175th day of the year (176th in leap years) in the Gregorian calendar. ... Year 1991 (MCMXCI) was a common year starting on Tuesday (link will display the 1991 Gregorian calendar). ... The Sandstorm report was the name of the secret report submitted on June 22, 1991 by financial consultants Price Waterhouse to the Bank of England, showing that the Bank of Credit and Commerce International (BCCI) had engaged in widespread fraud, and that organizations regarded as terrorist groups had maintained several...

Support of terrorism

Abu Nidal held accounts at BCCI's Sloane Street branch in London.

Lord Justice Bingham's report showed that MI5 had known as early as 1987 that Abu Nidal was banking with BCCI in London.

The Sandstorm report, parts of which were leaked to The Sunday Times, included details of how the Abu Nidal terrorist group had held accounts at BCCI's Sloane Street branch, near Harrods in London. Britain's internal security service, MI5, had signed up two sources inside the branch to hand over copies of all documents relating to Abu Nidal's accounts. One source was the Syrian-born branch manager, Ghassan Qassem, the second a young British employee. Image File history File links AbuNidal. ... Image File history File links AbuNidal. ... Abu Nidal in 1976 in a photograph released by the Israeli Defense Forces, one of only a handful of photographs of him known to exist. ... Sloane Street is a street in London which connects Knightsbridge to Sloane Square and forms the boundary between the exclusive districts of Belgravia and Chelsea. ... This article is about the capital of England and the United Kingdom. ... Image File history File links Metadata No higher resolution available. ... Image File history File links Metadata No higher resolution available. ... The Right Honourable Thomas Henry Bingham, Baron Bingham of Cornhill, KG, PC (born 13 October 1933), is one of the most senior judges in the United Kingdom. ... The Sunday Times is a Sunday broadsheet newspaper distributed in the United Kingdom and Republic of Ireland, published by Times Newspapers Ltd, a subsidiary of News International which is in turn owned by News Corporation. ... Abu Nidal in 1976 in a photograph released by the Israeli Defense Forces, one of only a handful of photographs of him known to exist. ... Sloane Street is a street in London which connects Knightsbridge to Sloane Square and forms the boundary between the exclusive districts of Belgravia and Chelsea. ... This article does not cite any references or sources. ... This article is about the capital of England and the United Kingdom. ... MI5 Logo. ...

The Abu Nidal link man for the BCCI accounts was an Arab based in Iraq named Samir Najmeddin or Najmedeen. Throughout the 80s, BCCI had set up millions of dollars worth of letters of credit for Najmeddin, largely for arms deals with Iraq. Qassem later swore in an affidavit that Najmeddin was often accompanied by an American, whom Qassem subsequently identified as the financier Marc Rich. Rich was later indicted in the U.S. for tax evasion and racketeering in an apparently unrelated case, fled the country, and received a controversial pardon from Bill Clinton on January 20, 2001. An affidavit is a formal sworn statement of fact, signed by the declarant (who is called the affiant), and witnessed (as to the veracity of the affiants signature) by a taker of oaths, such as a notary public. ... Marc Rich (born Marc David Reich on December 18, 1934) is an international commodities trader. ... This article contrasts tax evasion, tax avoidance, tax resistance and tax mitigation. ... Organized crime is crime carried out systematically by formal criminal organizations. ... William Jefferson Bill Clinton (born William Jefferson Blythe III[1] on August 19, 1946) was the 42nd President of the United States, serving from 1993 to 2001. ... January 20 is the 20th day of the year in the Gregorian calendar. ... Year 2001 (MMI) was a common year starting on Monday (link displays the 2001 Gregorian calendar). ...

Qassem also told reporters that he had once escorted Abu Nidal, who was allegedly using the name Shakir Farhan, around town to buy a tie, without realizing who he was. This revelation led in 1991 to one of the London Evening Standard's best-known front-page headlines: "I Took Abu Nidal Shopping." The Evening Standard is a newspaper published in London. ...

Closure of the bank?

On July 5, 1991, the Bank of England closed down BCCI. Around a million investors were affected. Amongst the customers of the bank at this time was Garrards and Mappin & Webb, the jewellers responsible for maintaining the crown jewels and makers of the trophy for the America's Cup. is the 186th day of the year (187th in leap years) in the Gregorian calendar. ... Year 1991 (MCMXCI) was a common year starting on Tuesday (link will display the 1991 Gregorian calendar). ... Headquarters Coordinates , , Governor Mervyn King Central Bank of United Kingdom Currency Pound sterling ISO 4217 Code GBP Base borrowing rate 5. ... Garrard & Co is a luxury jewellery and silver company founded by George Wickes in London in 1735. ... This article or section does not cite any references or sources. ... This article is about the yachting competition. ...

In 1992, United States Senators John Kerry and Hank Brown co-authored a report on BCCI, which was delivered to the Committee on Foreign Relations. The BCCI scandal was one of a number of crimes and disasters that influenced thinking leading to the Public Interest Disclosure Act of 1998. The report found that former Defense Secretary Clark Clifford and his business partner Robert A. Altman had been closely involved with the bank from 1978, when they were introduced to BCCI by Bert Lance, to 1991. Clifford and Altman testified to the committee that they had never observed any suspicious activity. The federal government brought indictments against Clifford and Altman and proposed barring them from banking for life, but did not pursue Clifford due to his age and deteriorating health. Altman, however, was indicted and ultimately tried in New York by the office of District Attorney Robert Morgenthau. Despite a failure to convict in the New York trial, Altman nevertheless agreed to be banned from banking under threat of prosecution by the Securities and Exchange Commission. John Forbes Kerry (born December 11, 1943) is the junior United States Senator from Massachusetts, in his fourth term of office. ... George Hanks (Hank) Brown (1940-) was a Republican politician and Senator from Colorado. ... U.S. Senate Committee on Foreign Relations is a standing committee of the United States Senate. ... The UKs Public Interest Disclosure Act provides a framework of legal protection for individuals who disclose information so as to expose malpractice and matters of similar concern. ... The United States Secretary of Defense (SECDEF) is the head of the U.S. Department of Defense (DoD), concerned with the armed services and military matters. ... Clark McAdams Clifford (December 25, 1906 – October 10, 1998) was a highly influential American lawyer who served Presidents Truman, Kennedy, Johnson and Carter, serving as Secretary of Defense for Johnson. ... Robert A. Altman is Chairman and CEO of ZeniMax Media, parent company of Bethesda Softworks, LLC. He is married to actress Lynda Carter. ... Thomas Bertram Lance, known as Bert Lance, was director of the Office of Management and the Budget (OMB) during the presidency of Jimmy Carter. ... Robert M. Morgenthau Robert Morris Morgenthau (born July 31, 1919 in New York City) is currently the District Attorney for New York County. ...

The British government also set up an independent inquiry, chaired by Lord Justice Bingham, in 1992. Its House of Commons Paper, Inquiry into the Supervision of the Bank of Credit and Commerce International, was published in October of that year. Following the report, the bank's liquidators launched the Three Rivers vs. Bank of England case, on behalf of thousands of BCCI creditors who are suing the Bank of England for its failure to properly oversee the bank. The BCCI creditors sought £850m in damages, claiming that the Bank of England was guilty of misfeasance in public office. The case collapsed in November 2005, with the Bank of England seeking to re-claim legal bills. The cost of the case to the creditors could be as high as £100m.^[6] The Right Honourable Thomas Henry Bingham, Baron Bingham of Cornhill, KG, PC (born October 13, 1933), is one of the most senior judges in the United Kingdom. ...

However, in 2002, Denis Robert and Ernest Backes, former number three of Clearstream, described as a "bank of banks" which practices "financial clearing", discovered that the BCCI had continued to maintain its activities after its official closure, with "microfiches" of Clearstream's illegal unpublished accounts.^[7] Denis Robert is a French journalist, author of Revelation$ with Ernest Backes, former #3 of Clearstream. ... Ernest Backes (1946, Trier, Germany) was #3 of compensation chamber Clearstream (formerly Cedel), in charge of relations with clients, and was fired in May 1983. ... Clearstream Banking S.A. (CB) is the clearing division of Deutsche Börse, based in Luxembourg. ... In banking and finance, clearing denotes all activities from the time a transaction is made until it is finally settled (see settlement). ...

Further information: Clearstream

Clearstream Banking S.A. (CB) is the clearing division of Deutsche Börse, based in Luxembourg. ...

Former directors

• Alfred Hartman
• James R. Bath

James Reynolds Bath was a former director of Bank of Credit and Commerce International (BCCI), and part owner of Arbusto Energy with George W. Bush, with whom Bath served as a member of the Texas Air National Guard. ...

See also

• Bert Lance
• List of notable business failures

Thomas Bertram Lance, known as Bert Lance, was director of the Office of Management and the Budget (OMB) during the presidency of Jimmy Carter. ... The following is a list of notable business failures, known either for marking the end of a well-known brand, for criminal proceedings associated with their demise (often fraud or other corporate crime), or for causing significant financial problems (or suffering from them). ...

Further reading

• J. Beaty, S.C. Gwynne: The Outlaw Bank : A Wild Ride into the Secret Heart of BCCI. Random House, 1993, ISBN 0-679-41384-7
• Nick Kochan, Bob Whittington: Bankrupt: The BCCI Fraud. London 1991
• James Ring Adams, Douglas Frantz: A Full Service Bank. London 1991
• Denis Robert, Ernest Backes: Révélations Arènes Editions, 2001, ISBN-10 2912485282
• Jean-Charles Brisard, Guillaume Dasquié, Ben Laden: La Vérité interdite. Gallimard, 2002, ISBN 2070423778, S.166-168.
• "The BCCI Affair", Report to the Committee on Foreign Relations, United States Senate, Senator John Kerry and Senator Hank Brown, 1992, 102nd Congress 2nd Session Senate Print 102-140 (Kerry Report).
• Time Magazine, 29.July 1991, The world's sleaziest bank, online unter Cover Story: The Dirtiest Bank of All
• Rachel Ehrenfeld, Evil Money. Encounters along the Money Trail, 1992, Harper Business, ISBN 0-88730-560-1).
• Peter Truell, Larry Gurwin, False Profits. The Inside Story of BCCI, the world’s most corrupt financial Empire, 1992, Houghton, Mifflin Company, Boston, New York, ISBN 0-395-62339-1
• James Ring Adams and Douglas Frantz, A Full Service Bank. How BCCI stole billions around the world, Simon & Schuster Inc., New York ISBN 0-671-72911-X
• Jonathan Beaty & S. C. Gwynne, The Outlaw Bank. A wild ride into the secret heart of BCCI, 1993, Random House, New York, ISBN 0-679-41384-7
• Nick Kochan & Bob Whittington, Bankrupt. The BCCI Fraud, 1991, Victor Gollancz Ltd., Londres, ISBN 0-575-05279-1
• John K. Cooley, Unholy Wars. Afghanistan, America and International Terrorism, 1999, Pluto Press, Londres, Sterling (Virginie), ISBN 0-7453-1328-0
• Lucy Komisar, "BCCI's Double Game: Banking on America, Banking on Jihad," in A Game As Old As Empire, 2007, Berrett-Koehler, San Francisco, ISBN 978-1-57675-395-8

References

1. ^ Beatty, Jonathan; S.C. Gwynne (1993-01-01). The Outlaw Bank: A Wild Ride Into the Secret Heart of BCCI. Beard Books, US. ISBN 978-1587981463. 
2. ^ ^{a b} Senator John, Kerry; Senator Hank Brown (December 1992). "BCCI's Criminality". The BCCI Affair: A Report to the Committee on Foreign Relations, United States Senate: Chapter 4, 102d Congress 2d Session Senate Print 102-140. Retrieved on 2007-09-28. 
3. ^ Henley, John. "When banks go bad: A short history of banking crisis", The Guardian, Guardian News and Media Ltd., 2007-09-19. Retrieved on 2007-09-08. (English) 
4. ^ Atkinson, Dan. "Accountants in BCCI net", The Guardian, Guardian News and Media Ltd., 1999-01-08. Retrieved on 2007-09-28. (English) 
5. ^ Senator John, Kerry; Senator Hank Brown (December 1992). "The Origin and Early Years of BCCI". The BCCI Affair: A Report to the Committee on Foreign Relations, United States Senate: Chapter 3, 102d Congress 2d Session Senate Print 102-140. Retrieved on 2007-09-28. 
6. ^ Cellan-Jones, Rory. "The end of an epic", BBC News Online, BBC, 2005-11-02. Retrieved on 2007-09-28. (English) 
7. ^ L'affaire BCCI (HTML (French)).

Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st Century. ... is the 271st day of the year (272nd in leap years) in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st Century. ... is the 251st day of the year (252nd in leap years) in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st Century. ... is the 271st day of the year (272nd in leap years) in the Gregorian calendar. ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st Century. ... is the 271st day of the year (272nd in leap years) in the Gregorian calendar. ... For other uses, see BBC (disambiguation). ... Year 2007 (MMVII) is the current year, a common year starting on Monday of the Gregorian calendar and the AD/CE era in the 21st Century. ... is the 271st day of the year (272nd in leap years) in the Gregorian calendar. ... HTML, short for Hypertext Markup Language, is the predominant markup language for web pages. ...

External links

• BCCI (in liquidation) homepage
• The BCCI Affair, Report to the Committee on Foreign Relations States Senate; held at FAS -(A Report to the Committee on Foreign Relations United States Senate by Senator John Kerry and Senator Hank Brown; December 1992; 102d Congress 2d Session Senate Print 102-140)
• Report in the Washington Monthly
• Erisk, Juni 2001, "Case study: Bank of Credit and Commerce International"
• (French) "Bank of Colombian Cocaine Industry":l'affaire BCCI, online confidentiel.net
• From BCCI to ISI: The Saga of Entrapment Continues