Spitfire List Web site and blog of anti-fascist researcher and radio personality Dave Emory.

For The Record  

FTR #589 Interview with Lucy Komisar About the BCCI

Recorded March 11, 2007
MP3 Side 1 | Side 2

Introduction: Highlighting information about the Bank of Credit and Commerce International (“BCCI”), this interview sets forth investigative journalist Lucy Komisar’s chapter on the bank in a new book “A Game as Old as Empire.” A major vehicle for covert operations in the 1970’s, and 1980’s, the institution was known to insiders as “The Bank of Crooks and Criminals International.” With strong connections to both the elder and younger George Bush, the Saudi elite, Saddam Hussein, the Iranian mullahs, the Iran-Contra scandal, drug trafficking, terrorism and the milieu of Osama bin Laden and al-Qaeda, the bank’s closets held many skeletons. This broadcast details some of those skeletons, and reviews key aspects of the cover-up. Be sure to visit Lucy’s website, where the book can be ordered at a discount. In addition to the programs noted below, be sure to listen to check out Dave’s other interviews with Lucy, such as FTR#’s 463, 485, 531.

Program Highlights Include: The BCCI’s links through Saudi intelligence to the elder George Bush; the BCCI’s links through its investors to the capitalization of the younger George Bush’s energy ventures; the cover-up of the BCCI investigation by the administration of Bush the Elder; the disappearance of the money that was stolen; the role of the BCCI in the arming of Iran as part of the Iran-Contra scandal; the BCCI’s role in the arming of Saddam Hussein; the role of the BCCI in arming the Afghan mujahedeen; the role of the BCCI and its investors in financing the activities of Osama bin Laden, both during the war against the Soviets in Afghanistan and subsequently; the role of the Clearstream network in the BCCI affair; the role of FBI director Robert Mueller in covering up the BCCI case.

1. Financed by wealthy investors from Pakistan and the Persian Gulf (mostly Saudi Arabia), the BCCI served as a major vehicle for U.S. covert operations around the world, the Middle East in particular. Eventually, the institution’s role in financing illicit weapons deals, drug trafficking operations and international terrorism led to an investigation. New York D.A. Robert Morgenthau returned indictments. The administration of George W. Bush was less than vigorous in its pursuit of the case, perhaps due to the fact that the BCCI and its major players were very, very close to both the elder and the younger George Bush. The monies that vanished have never been located. The Bank of Credit and Commerce International was founded in 1972 by a Pakistani banker, Agha Hasan Abedi, with the support of Sheik Zayed bin Sultan al Nahyan, the ruler of the oil-rich state of Abu Dhabi and head of the United Arab Emirates. The Arabs’ interest in the bank was more than financial. A classified CIA memo on BCCI in the mid-80s said that ‘its principal shareholders are among the power elite of the Middle East, including the rulers of Dubai and the United Arab Emirates, and several influential Saudi Arabians. They are less interested in profitability than in promoting the Muslim cause.’ BCCI enriched the entourage of the Bushes and other Washington influentials. Its biggest shareholders were Saudi and United Arab Emirates sheiks. The money it stole—somewhere between $9.5 billion and $15 billion—made its 20-year heist the biggest bank fraud in history. Most of it was never recovered. The George H.W. Bush administration, in power when the mega-fraud was discovered, went after the bank half-heartedly and only after indictments by New York District Attorney Robert Morgenthau. It never touched the Persian Gulf money-men who ran the BCCI criminal enterprise. The Bush family and its allies used and then protected the world’s most criminal bank.”
(A Game as Old as Empire; edited by Stephen Hiatt with an introduction by Jonathan Perkins; Berrett-Kohler; Copyright 2007, Berrett-Koehler; Excerpts are from Chapter Four by Lucy Komisar.)

2. Bush family ally bin Mahfouz never went to jail as a result of his wrongdoing in the BCCI affair. “As a result of Morgenthau’s investigation, in July 1992 a New York grand jury indicted [Saudi businessman and head of the National Commercial Bank] Khalid bin Mahfouz and an aide for defrauding BCCI and its depositors of as much as $300 million, using depositors’ money to buy his bank shares. The U.S. Federal Reserve alleged that he breached banking regulations. But bin Mahfouz alleged that he could not be touched by American criminal law in Saudi Arabia, and Morgenthau dropped the charges in 1993 after bin Mahfouz agreed to settle for $225 million. He and the National Commercial Bank also made a $253 million deal with BCCI’s creditors to resolve their claims. Kamal Adham, the former Saudi intelligence chief, agreed to pay a $105 million fine. The fines in the end toped $1.5 billion, a fraction of the amount that had disappeared, and nobody went to jail. The Justice Department didn’t go after Bush family friend and money source bin Mahfouz at all.” (Idem.)

3. The elder George Bush’s tenure as directors of the CIA brought him into contact with many of the key players in the BCCI. Many BCCI players, including Osama bin Laden’s brother, helped the younger Bush to get his energy ventures off the ground. “Sheik Kamal Adham, brother-in-law of the late Saudi King Faisal, head of Saudi intelligence from 1963 to 1979, and the CIA’s liaison in the area, became one of BCCI’s largest shareholders. George Bush Sr. knew Adham from his time running the CIA in 1975. Another investor was Prince Turki bin Faisal al-Saud, who succeeded Adham as Saudi intelligence chief. The Bushes’ links to the bank passed through Texas businessman James R. Bath to bin Mahfouz. Bath invested money in the United States on behalf of bin Mahfouz and with a third partner, Ghaith Pharaon (a Saudi Harvard MBA), shared ownership of Houston’s Main Bank. In 1976, when Bush was the head of the CIA, the agency sold some of the planes of Air America, a secret ‘proprietary’ it used during the Vietnam War, to Skyway, a company owned by Bath and bin Mahfouz. Bath then helped finance George W. Bush’s oil company, Arbusto Energy Inc., in 1979 and 1980.” (Idem.)

4. George W. Bush’s energy ventures continued to prosper as a result of the backing of BCCI investors. “When Harken Energy Corp., which had absorbed Arbusto (by then merged with Spectrum 7 Energy), got into financial trouble in 1987, Stephens helped it secure $25 million financing from the Union Bank of Switzerland (UBS). As part of that deal, a place on the board, was given to Harken shareholder Sheik Abdullah Taha Bakhsh, whose chief banker was BCCI shareholder bin Mahfouz. Then, in 1988, George Bush Sr. was elected president. Harken benefited by getting some new investors, including Salem bin Laden, Osama bin Laden’s brother, and Khalid bin Mahfouz. Osama bin Laden himself was busy elsewhere at the time—organizing al-Qaeda.” (Idem.)

5. During the first Afghan War (against the former Soviet Union), the BCCI was used to fund the Afghan Mujaheddin. In order to do so, the bank worked with the Bank al-Taqwa, which was used to finance al-Qaeda’s activities. (For more about Bank al-Taqwa, see—among other programs—FTR#’s 343, 454, 455, 456, 462, 464, 467, 513, 537.) “The CIA used Islamabad and other BCCI branches in Pakistan to funnel some of the $2 billion that Washington sent to Osama bin Laden’s Mujaheddin to help fight the Soviets in Afghanistan. It moved the cash the Pakistani military and government officials skimmed from U.S. aid to the Mujaheddin. It also moved money as required by the Saudi intelligence services. The CIA money passed from the U.S. to the al-Taqwa Bank in Nassau to Barbados to Karachi to BCCI in Islamabad. Al-Taqwa—the name means ‘fear of God’—was not a real bank with bricks and mortar and depositors and services. It was a shell bank set up to finance the jihad. The BCCI operation gave Osama bin Laden an education in offshore black finance that he would put to use when he organized the jihad against America. And the CIA was well aware of its student’s capabilities. After 9/11, U.S. agents headed straight for al-Taqwa’s operations in Switzerland, Liechtenstein and Nassau and shut them down. Swiss police questioned al-Taqwa’s president, Youssef Mustafa Nada, who was part of the Egyptian Muslim Brotherhood, a radical Islamist organization, and they searched his home in Campione d’Italia, an Italian tax haven on Lake Lugano.” (Idem.)

6. During the Iran-Iraq War, the BCCI helped to finance the Reagan/Bush administrations’ arming of Saddam Hussein. “BCCI also helped Saddam Hussein, again with the complicity of his Washington friends. The bank funneled millions of dollars to the Atlanta branch of the Italian government–owned Banca Nazionale del Lavoro, which was Baghdad’s American banker, so that from 1985 to 1989 it could make $4 billion in secret loans to Iraq to help it buy arms. Congressman Henry Gonzalez held a hearing on BNL in 1992 during which he quoted from a confidential CIA document that said the agency had long been aware that the bank’s headquarters was involved in the American branch’s Iraqi loans. Kickbacks from 15 percent commissions on BNL-sponsored loans were channeled into bank accounts held for Iraqi leaders via BCCI offices in the Caymans as well as in offshore Luxembourg and Switzerland. BNL was a client of Kissinger Associates, and Henry Kissinger was on the bank’s international advisory board, along with Brent Scowcroft, who would become George Bush Sr.’s national security advisor. That connection makes Bush administration officials’ indignation at the Iraq’s ‘oil for food’ payoffs rather disingenuous. Bush and his friends of course knew that Saddam was making payoffs on their watch: their favorite criminal bank was moving the money! And in another pre-9/11 incident of blowback, the weapons bought by Saddam with BNL funds were used during the Gulf War against Americans and their allies.” (Idem.)

7. In addition to arming Saddam Hussein, the BCCI was also involved in arming Iraq’s erstwhile enemy Iran, through the machinations of the Iran-Contra scandal. Lucy reviews Oliver North’s use of the bank for many of the Iran/Contra deals. “Not content with aiding Saddam Hussein, the Reaganites decided to arm Iran as well. A Pakistani arms dealer, Arif Durrani, said that during the Reagan and Bush administrations the CIA used BCCI to finance shipments of Hawk missiles to Iran to promote stalemate in the Iran-Iraq War. BCCI’s largest borrower was the Gulf Group, the family company of Mustapha Gokal, financial advisor to radical Islamist Ayatollah Khomeini. BCCI gave the Gulf Group unsecured loans of $800 million—more than two-thirds its total capital—and the Gokal company provided Iran with war material, food and drugs.” (Idem.)

8. Depositors have never been reimbursed. The major investors, such as bin Mahfouz, are doing quite well, however. “What happened to the billions of dollars sucked out of BCCI and never repaid to depositors? International banks’ complicity in the offshore secrecy system has effectively covered up the money trail. But in the years after the collapse of BCCI, Khalid bin Mahfouz was still flush with cash, and the former financier of George W. Bush became a financier of Osama bin Laden. In 1992, bin Mahfouz had established the Muwafaq (“blessed relief”) foundation in the offshore Channel Islands, providing it with as much as $30 million. The U.S. Treasury Department called it ‘an Al-Qaeda front that receives funding from wealthy Saudi businessmen.’” (Idem.)

9. More about the proximity of bin Mahfouz’s National Commercial Bank to the milieu of the bin Laden family: “His $21 billion National Commercial Bank was the world’s largest private bank. NCB was affiliated with Inter-Maritime Management SA, a subsidiary of the Bank of New York-Inter Maritime Bank in Geneva. By coincidence [!], another Inter-Maritime subsidiary, Unimags Trading, had shared a Geneva address with SICO, the Saudi Investment Company run by Yeslam Binladen. SICO is the holding company of the Saudi Binladen Group (SBG), the largest Middle East construction company, which operates through a web of offshore companies and is owned by the extended bin Laden family. Yeslam is the half-brother of Osama bin Laden.” (Idem.)

10. BCCI player bin Mahfouz’s National Commercial Bank was deeply involved with the DMI, which in turn, is profoundly connected to the milieu of Osama bin Laden and others of his family. “In 1998, the U.S. complained to Saudi Arabia that the National Commercial Bank was funding Osama bin Laden’s activities in Afghanistan and Chechnya, and the Abu Sayyaf guerillas in the Philippines. Bin Mahfouz was a board member of the Dar al-Mal al-Islami (DMI), the House of Finance of Islam, a Geneva-based bank charged with distributing subsidies of the royal family in the Muslim world. DMI, founded in 1981 and with assets of an estimated $3.5 billion, also had connections to the bin Laden family: its 12-member board of directors included Haydar Mohamed bin Laden, Osama bin Laden’s half-brother. The connections are interesting. The bank’s president, Mohammed al-Faisal, was also an investor and board member of al-Shamal Bank, which held al-Qaeda members’ accounts. In testimony during U.S. trials of suspects in the 1998 attacks on American embassies in Kenya and Tanzania, an al-Qaeda collaborator Essam al-Ridi, recounted how bin Laden transferred $230,000 from al-Shamal Bank to a bank in Arizona to buy a plane to fly Stinger missiles from Pakistan to Sudan. Coming full circle, al-Faisal’s DMI was a major shareholder of al-Taqwa. In 1999, U.S. investigators looking into the attacks on the U.S. embassies in Africa, found suspicious transfers of tens of millions of dollars from NCB to ‘charities’ believed to funnel money to Osama bin Laden. Some of the ‘charities’ believed to funnel money to Osama bin Laden. Some of the ‘charities’ believed to funnel money to Osama bin Laden. Some of the ‘charities’ were run by the bin Mahfouz family the Saudis ordered an audit and confirmed the transfers. Altogether, $2 billion was missing from the National Commercial Bank. The Saudis put bin Mahfouz under house arrest and forced to sell his shares. . . .But the money he ran still flowed to bin Laden.” (Idem.)

11. Next, Lucy and Dave review the links between the Clearstream network and BCCI. (For more about this, see—among other programs—FTR#’s 356, 387, 458.)

12. The tepid, reluctant investigation into BCCI that was described in paragraph #1 was overseen by Robert Mueller, now head of the FBI. When Mueller was appointed, Mr. Emory noted that his investigation of BCCI was less than vigorous and noted as well that many of the players in the BCCI scandal also figured in the investigation into al-Qaeda. In FTR#310, Mr. Emory speculated that the proximity of the elder and younger George Bush, as well as Osama bin Laden to the milieu of the BCCI might well have dictated Mueller’s appointment to be head of the FBI, as he could re relied on to “let sleeping dogs lie.”


One comment for “FTR #589 Interview with Lucy Komisar About the BCCI”

  1. NJ Gov Thomas Kean did a land deal through BMI to some Saudi man in the 1980s, right around the time BCCI deals were going down.

    Given BMI was later tied to 911 this would seem unfortunate, were it not for Kean getting a plum position as a 911 investigator.

    I have a hunch someone should ask Kean about BCCI. And wasn’t he a partner with Khalid bin Mafouz in Amerada Hess Delta Oil in the 1990s?

    An example of a BMI type deal is here http://www.apnewsarchive.com/1991/Scandal-ridden-BCCI-Reportedly-Linked-To-Atlantic-City-Real-Estate-Deal/id-80e110daee77a53c46898443b93d30cc

    It shows that organized crime, like the DeCavalcantes, were involved in BCCI.

    Here’s some news for you. Soliman Biheiri ran BMI. HIs family lived next door to Phil Gurian’s family on a cul-de-sac in Plantation, Florida, for I don’t know how long in the 1990s.

    Phil Gurian has absolutely no ties to the DeCavalcantes, of course.

    Posted by adam | May 2, 2016, 1:55 pm

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