- Spitfire List - http://spitfirelist.com -

Bush, al-Qaeda and Saddam

by Lucy Komis­ar

From A Game as Old as Empire [1]
Sum­ma­ry high­lights from Chap­ter 4: “The BCCI Game: Bank­ing on Amer­i­ca, Bank­ing on Jihad”

BCCI: How the Rea­gan-Bush-CIA team used an off­shore bank to run guns, finance Islam­ic jihadists, and laun­der mon­ey.

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.

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 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.

One day in 2002 I took the fer­ry from Lugano, on the Swiss side, to Cam­pi­one. Nada, a man who appeared to be in his 60s, met me at the dock and drove me up the wind­ing road to his hill­top man­sion, where lux­u­ri­ous liv­ing rooms dec­o­rat­ed with ornate carv­ings and inlaid fur­ni­ture remind­ed me of the Blue Mosque in Istan­bul. An intel­li­gence source had sent me the con­fi­den­tial Nas­sau share­hold­er list of the al-Taqwa Bank that list­ed mem­bers of the bin Laden fam­i­ly. I con­front­ed Nada with the list, and he acknowl­edged imme­di­ate­ly that it was gen­uine. “The sis­ters of Bin­laden? The FBI knows it, Trea­sury knows it. They wrote and brought the pho­to of the list.”

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 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.

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.

BCCI’s major investors were pow­er­ful sheiks and fam­i­lies in the Mid­dle East. Abu Dhabi Sheik Zayed and his fam­i­ly paid no more than $500,000, but they were the own­ers of record of almost one-quar­ter of the bank’s shares. A large part of the invest­ment was risk-free—with guar­an­teed rates of return and buy-back arrange­ments. 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 fam­i­ly of Khalid Salem bin Mah­fouz, own­er of the Nation­al Com­mer­cial Bank, the largest bank in Sau­di Ara­bia, banker to King Fahd and oth­er mem­bers of the rul­ing fam­i­ly, bought 20 to 30 per­cent of the stock for near­ly $1 bil­lion. Khalid was put on the board of direc­tors. The fam­i­ly got $176 mil­lion in loans from BCCI.

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.”

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.

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 father, and Khalid Bin Mah­fouz. Osama bin Laden him­self was busy else­where at the time—organizing al-Qae­da.

As a result of Morgenthau’s inves­ti­ga­tion, in July 1992 a New York grand jury indict­ed 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 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 topped $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.

What hap­pen 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.”

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 though a web of off­shore com­pa­nies and is owned by the extend­ed bin Laden fam­i­ly. Yeslam is the half-broth­er of Osama bin Laden.

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 guer­ril­las 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” 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 him to sell his shares.

But the mon­ey he ran still flowed to Osama bin Laden.