I found an interesting case on a bank laundering money, involved in the drugs trade etc. Bank of Credit&Commerce International (BCCI). Here are some
excerpts from a journal article about the scandal that BCCI was involved in.
BCCI was established in 1972 with capital from the ruler of Abu Dhabi, Sheikh Zayed, and the Bank of America
The bank was a mess, financially and lawfully from very early on.
Yet, the bank was insolvent from the 1970s and its top managers had been manipulating the accounts concealing losses, keeping deposits off the
books, hiding illegal BCCI investments in United States financial institutions, and generating false profits. Loans to the Gulf Group of shipping
companies,3 which were larger than BCCI's capital base, were not serviced causing unsustainable costs of over $1 billion in the 1980s. An additional
$1 billion losses were incurred in BCCI's treasury department.
As the liquidators suggested that several billion dollars were unaccounted for and investigations into BCCI's practices intensified and multiplied, an
unparalleled international scandal was fuelled by press reports about BCCI's banking services to money launderers, drug traffickers, arms dealers,
coffee smugglers, tax evaders, political offenders, dictators, and intelligence agencies around the globe.4
However BCCI had influential customers and backers.
It provided banking services, held accounts for, or was publicly associated with, heads or former heads of governments (James Callaghan,7 Willy
Brandt, Alan Garcia of Peru, Jimmy Carter, among many others), intelligence agencies and agents (for example, the CIA, Kamal Adham,8 Richard Helms,
William Casey)9 international organizations (such as the United Nations) and public relations firms (Hill and Knowlton), ambassadors (for example,
Andrew Young, Sergio da Costa of Brazil), highlevel politicians (for example, United States Senator Orrin Hatch, former Senator John Culver - five
British Tories, including Sir Julian Ridsdale, were BCCI consultants),10 and influential business people and bankers (including Larry Romrell, Bob
Magness - founder of TCI, the largest United States cable company - David Paul, Jackson Stephens, Alfred Hartmann, Yves Lamarche).
The lawyers and lobbyists that represented BCCI in the United States of America included former Federal Reserve officials, federal prosecutors, and
former high-level military officers, senators or government officials, including Clark Clifford, the counsel to Democratic Presidents from Truman to
In reference to the Iran-Contra scandal, BCCI and Noriega were found to be in business together.
The Kerry investigation into the Noriega-BCCI relationship, did not proceed smoothly. M. Pillsbury, an aid to Republican Senator Hatch was
advising BCCI on lobbying strategya nd on how to deal with Kerry.31A s irdicated by BCCI lawyers' notes, Kerry's interest was not in BCCI by itself:
[According to Pillsbury] Senator Kerry wants to be praised for what he has done on money laundering; especially by conservative Republicans. His only
interest in BCCI is to get info re: Noriega and get credit for his work.
In the face of opposition from various parties including within Kerry's own Committee on Foreign Relations, the section on BCCI was left out of the
final report with only a recommendation of further investigation
BCCI found itself vunerable as many of its shadier customers found themsels overthrown or out of favour.
The Iran-Contra transactions were over and so was the Iran-Iraq war (both sides were secretly, illegally, or against overt foreign policy assisted
by the United States of America, partly through BCCI). In addition, clients of BCCI such as Noriega, Duvalier, Somosa, Saddam Hussein were now
overthrown or demonized by the West and the United States in particular. Ironically, such clients, who would have provided clout and enhanced BCCI's
power in the past because they were allies and friends of the United States, increasingly became sources of weakness and vulnerability.
It seems that BCCI was known for its corrupt practices for some time before anything was done.
Evidence available to the Bank of England and other regulatory agencies could have justified the closure of BCCI much earlier than they did. Yet,
BCCI could not be attacked before the end of the Gulf War. By 1991, however, Iraq was defeated by an alliance that depended heavily on the Arab
support. It would be unlikely for regulatory agencies to engage in actions that could jeopardiset he alliance by embarrassing or antagonizing the
owners of BCCI, the authorities of Abu Dhabi.42 Action that risked damaging the relations with the ruling elites in Abu Dhabi or Saudi Arabia43 -
wealthy and eager backers of anti-communist activities- would have been blocked by foreign policy makers during the Cold or the Gulf Wars. The
Financial Times argued that earlier action against BCCI' would scarcely have pleased the Foreign Office
You may not be able to access the journal which is why I have block quoted.
edit on 3-6-2012 by Peruvianmonk because: Added annotation