Rogue Bank Cast Its Net Worldwide

THREE years ago, just days before the Bank of Credit and Commerce International (BCCI) was indicted on federal charges of laundering drug money, Alan Stoga, a partner at the prestigious international consulting firm, Kissinger Associates Inc., discussed prospects for business ties with a BCCI contact over lunch.Sometime after the bank was indicted, Mr. Stoga says, he told BCCI that "no relationship" was possible. But the interplay between the two firms offers a glimpse of how the international bank worked to penetrate the Washington establishment. Internal BCCI memos, obtained by the Monitor, document the bank's effort to hire Kissinger Associates and note BCCI's interest in Kissinger consultants bound for senior posts in the forming Bush administration. "Dear Abol," Mr. Stoga wrote in an Oct. 7, 1988, letter to Abol Fazl Helmy, a BCCI official. "I enjoyed lunch yesterday and, even more, your suggestion that BCCI might be interested in developing a relationship with Kissinger Associates." Mentioning an enclosure of information about the firm and its principals, Stoga wrote, "I am not sure the former really does us justice, but I am reluctant to be more specific, at least on paper, about the kinds of consulting projects we undertake for clients." Since BCCI's indictment on Oct. 11, 1988, its two top officers, founder Agha Hassan Abedi and CEO Swaleh Naqvi have been indicted for fraud. Further international probes into the bank's activities have led to allegations that BCCI ran an elaborate network of illegal drug and arms sales, bribery, and theft.

Probe continues United States investigators - including three congressional committees, the Federal Reserve Board, the Justice Department, and the Manhattan District Attorney's Office - are exploring just how much official Washington might have known about BCCI's illegal schemes and the bank's efforts to buy influence and favorable treatment. Kissinger Associates, founded by former US Secretary of State Henry Kissinger, has included many high-ranking US administration officials, including national security adviser Brent Scowcroft (who joined Kissinger after serving as Gerald Ford's national security adviser in the 1970s and then left the firm to become President Bush's current national security adviser); Deputy Secretary of State Lawrence Eagleburger, and a host of well-placed international consultants. It was a particularly attractive connection for BCCI - just one of a vast field of relationships the bank tried to cultivate during its almost 20 years of operations in some 70 countries. BCCI has been well-known to US intelligence for at least five years. In 1988 then-Deputy CIA Director Robert Gates reportedly dubbed BCCI "the Bank of Crooks and Criminals." That was before he supplied an inquiring investigator with a five-page 1986 CIA report on BCCI's criminality. Mr. Helmy, a close aid to BCCI's chief executive officer, Swaleh Naqvi, recently told US law enforcement officials through his lawyer that he was acting on behalf of his boss, Mr. Naqvi, in seeking help from Kissinger's orga nization. On Oct. 11, 1988, just four days after Stoga's letter, BCCI was indicted in Tampa, Fla., on the money-laundering charges. The bank later pleaded guilty on Jan. 16, 1990, and was fined $15 million, the amount it was to make on the criminal transaction. BCCI was found to have provided money-laundering services for profits of Colombian drug dealers and Panama's ousted leader, Gen. Manuel Antonio Noriega. Veteran Democratic adviser Clark Clifford represented BCCI and later coordinated a multi-firm legal defense team for the bank, whose expenses ran into tens of millions of dollars. Mr. Clifford's role as adviser and counsel to BCCI, in addition to his chairmanship of First American Bankshares, the Washington bank illegally acquired by BCCI, is now under civil and criminal investigation. "When the whole Tampa issue began coming out in public, we decided that we didn't feel comfortable doing business with a bank engaged in such activities," Stoga said in a telephone interview from his New York office last Friday.

Bank kept trying But BCCI apparently didn't give up. An Oct. 12 internal BCCI memo from Helmy to BCCI chief Swaleh Naqvi says: "Further to our recent conversation in London, I met with Mr. Alan Stoga, who is one of three partners of Kissinger Associates Inc. Subsequently, the developments in the United States [the Tampa indictment] took place. Judging by the high level of adverse publicity that is being generated by the media, it is imperative that a firm response be made." Helmy continues: "I received a call today from Mr. Stoga, who informed me that Dr. Kissinger recommends that a public relations offensive be made by us and in that context has suggested using Burson-Marstellar, a highly reputable public relations firm...." Stoga says the contents of Helmy's memo "sound pretty creative to me.... I have no recollection of discussing Burson-Marstellar." He denies making the phone call and says BCCI's attempts to hire Kissinger Associates were aborted. "Did BCCI try to hire us? Yes. Did BCCI hire Kissinger Associates? No. We never had a relationship." But many deals between the bank and other firms were actually consummated, and they are believed to have helped grease the wheels for the bank's activities (see accompanying article) US Sen. John Kerry (D) of Massachusetts, chairman of the Senate Foreign Relations Subcommittee on Terrorism, Narcotics, and International Operations, has conducted 10 separate hearings into BCCI activities. He describes the bank's network as "this enormous undergovernment that's out there." Testifying before Mr. Kerry's committee, William von Raab, US customs commissioner during the 1988 BCCI Tampa case, said that strong evidence he collected during that period - showing BCCI was the center of an underworld network - was cast aside by federal authorities. He said a mixture of Washington lawyers, lobbyists, and public relations firms derailed US federal authorities from exploring and exposing BCCI's criminal activities. A lawyer for Lloyds of London, James Dougherty, says he also produced evidence to the Justice Department that proves BCCI was involved in a criminal conspiracy - including money laundering, kickbacks, extortion attempts, and obstruction of justice. He testified that his offers of cooperation with federal authorities - and the evidence - were ignored. Asked why federal authorities did not aggressively prosecute top BCCI officials, Mr. von Raab replied: "It was a combination of a general softening of resolve in the senior US officials by the incredible pounding they were taking by the influence peddlers in Washington.... The result is that senior US policy-level officials were constantly under the impression that BCCI was probably not that bad because all these good guys that they play golf with all the time were representing them." Von Raab told the S enate panel he was pulled off the BCCI case because "they [federal authorities] felt I was pushing the case too hard publicly." One congressional investigator who says BCCI was "anxious to cement ties with the Republican administration during a time of need," thinks the bank was successful.

Meeting scheduled "I will be meeting Mr. Stoga in the first week of January 1989," Helmy wrote to his boss, BCCI chief executive officer Naqvi. "It would be of interest for you to know that Mr. Scowcroft is now the National Security Adviser Designate in the Bush administration and another Partner of Kissinger Associates [presumably Deputy Secretary of State Lawrence Eagleburger] is being tapped for Assistant Secretary of State in the Bush administration.... You may agree that this association with Kissinger Associates Inc . needs time to be cultivated. I am working in that direction." Helmy's Jan. 11, 1989, memo to Naqvi regarding Kissinger Associates is far more circumspect than the earlier two. "I had a lunch meeting with the gentleman on Jan. 5, 1989, and a follow-up telephone conversation on Jan. 19, 1989. It was established that it is in our best interests for both parties to continue with the conversations. "As such," writes a hopeful Helmy, "the door for an eventual relationship remains open."