Furor Over BCCI Scandal Draws in More Agencies

AS Congress holds center-stage in Washington's investigation of the $20 billion Bank of Credit and Commerce International - the largest bank fraud in history - the United States Justice Department is grudgingly coming out from behind the curtain.Investigators and witnesses on Capitol Hill charge that the Justice Department has protected the Central Intelligence Agency, which has admitted to using BCCI to make deposits for covert operations. CIA Deputy Director Richard Kerr revealed on Friday that during these operations - since the early 1980s - the CIA knew about and informed other US government agencies of BCCI's work in money laundering, drug trafficking, and terrorism. Kerry takes lead Sen. John Kerry (D) of Massachusetts has taken the lead in investigating US government officials, companies, organizations and individuals allegedly linked to the BCCI web of wrongdoing. That web has ranged from financing parts of Pakistan's nuclear program to supporting Afgan rebels to moving Central Bank funds in Peru. It has also left bankrupt small depositors whose life savings were lost due to reckless management by rich Arab sheikhs. With 8,000 pages of documents to pore over and scant staff, the Massachusetts senator, who chairs the Senate Foreign Relations Subcommittee on Terrorism, Narcotics and International Operations, is left asking more questions than he can answer. Most glaring is why the Justice Department appears to have blocked his efforts to uncover the US involvement, and has since only reluctantly opened its own investigation. The department has not taken the opportunity to testify before Kerry's committee. "The target of our investigation," Senator Kerry said at a Monitor breakfast on Friday, is "this enormous under-government that's out there - a mixture of various kinds of nefarious types of people within countries, who share no standards, who know no laws." The vast group involved in the BCCI network spans up to 71 countries. Kerry is also examining possible BCCI influence peddling, including allegations of cash payoffs to US officials who greased the wheels for BCCI's US-based activities, such as the control of First American Bankshares Inc., Washington's largest holding company.

No coverup proof At this point, there is no proof of a coverup by the Bush administration. All one can assert is the administration's lack of aggressiveness in investigating BCCI. Kerry said the administration may have a variety of motives for covering up its BCCI links. "This is a big network, he said. ... There are groups of people at large who make up a so-called second tier of government, ... people who float around between governments facilitating [illicit deals] and earning good dollars for it. They operate by their own rules, and that's why some of the witnesses in this case are scared of being killed; that's why some people associated with this have disappeared. "The motive would be that [the Bush administration doesn't] want that exposed. You have leaders of countries, central bank funds of nations that were dumped into [BCCI], military figures in certain countries using the bank to facilitate ripping off American aid. You can find lots of motives out there for people who don't want this full story to come out." William von Raab, a key witness before Kerry's committee, is the former US Customs Bureau head who says he was removed from a BCCI investigation in 1989 by US Treasury and Justice officials who were troubled by Mr. von Raab's efforts to go public. Kerry says the Justice Department also blocked his own efforts to hold hearings. "The reason we were given was it would interfere with their investigation. Obviously we were left asking 'what investigation?' ." He claims Justice neither talked to his would-be witnesses nor requested any relevant documents. Robert Gates, Bush's national security adviser and former deputy CIA director, knew of BCCI's illicit actions, says Kerry. "The CIA was aware that this bank was nefarious ... and that was five years ago. And that was known by Bob Gates, because Bob Gates [had a] particular memo [detailing BCCI's criminal activities] and showed it to Von Raab."

Indictments issued The New York district attorney handed down BCCI indictments last week; the General Accounting Office, the FBI, and the Federal Reserve Board are all conducting investigations. And the Justice Department has also thrown its hat into the ring. Although he says there's enough blame to go around for Democrats and Republicans alike, Kerry is under attack from Republican leadership for turning the BCCI affair into a partisan issue. And Kerry says he's already incurred the wrath of the Bush administration. "Yesterday [Thursday] I got a call from a friend of mine in Washington: 'Word's out on the street, the White House is trying to find out all the dirt on you they can. Confirmation hearings by the Senate Select Intelligence Committee on Bush's nomination of Gates as CIA director, are scheduled to begin begin Sept. 16. By then the congressional investigations into BCCI, which Mr. Gates reportedly referred years ago as the Bank of Crooks and Criminals, will be well underway, and Gates's possible BCCI role will be scrutinized.