Prominent figures with ties to the bank included former president
Jimmy Carter's budget director, Bert Lance, and a bevy of powerful
Washington lobbyists with close ties to President George H.W. Bush, a
web of influence that may have helped the bank evade previous
investigations.
The current president's career as an oilman was always marked by the
kind of insider cronyism that Kerry resisted.
Even more startling, as a director of Texas-based Harken Energy, Bush
himself did business with BCCI-connected institutions almost at the
same time Kerry was fighting the bank.
As The Wall Street Journal reported in 1991, there was a "mosaic of
BCCI connections surrounding [Harken] since George W. Bush came on
board."
In 1987, Bush secured a critical $25 million-loan from a bank the
Kerry Commission would later reveal to be a BCCI joint venture.
Certainly, Bush did not suspect BCCI had such questionable connections
at the time.
But still, the president's history suggests his attacks on Kerry's
national-security credentials come from a position of little
authority.
As the presidential campaign enters its final stretch, Kerry's BCCI
experience is important for two reasons.
First, it reveals Kerry's foresight in fighting terrorism that is
critical for any president in this age of asymmetrical threats.
As The Washington Post noted, "years before money laundering became a
centerpiece of antiterrorist efforts... Kerry crusaded for controls on
global money laundering in the name of national security."
Make no mistake about it, BCCI would have been a player.
A decade after Kerry helped shut the bank down, the CIA discovered
Osama bin Laden was among those with accounts at the bank.
A French intelligence report obtained by The Washington Post in 2002
identified dozens of companies and individuals who were involved with
BCCI and were found to be dealing with bin Laden after the bank
collapsed, and that the financial network operated by bin Laden today
"is similar to the network put in place in the 1980s by BCCI."
As one senior U.S. investigator said in 2002, "BCCI was the mother and
father of terrorist financing operations."
Second, the BCCI affair showed Kerry to be a politician driven by a
sense of mission, rather than expediency -- even when it meant
ruffling feathers.
Perhaps Sen. Hank Brown, the ranking Republican on Kerry's
subcommittee, put it best. "John Kerry was willing to spearhead this
difficult investigation," Brown said.
"Because many important members of his own party were involved in this
scandal, it was a distasteful subject for other committee and
subcommittee chairmen to investigate. They did not. John Kerry did."
http://www.alternet.org/election04/19608
Ahead of His Time
By David J. Sirota and Jonathan Baskin, Washington Monthly. Posted
August 19, 2004.
John Kerry understood before most in Washington the important links
between illegal banking and terrorism.
Two decades ago, the Bank of Credit and Commerce International (BCCI)
was a highly respected financial titan.
In 1987, when its subsidiary helped finance a deal involving Texas
oilman George W. Bush, the bank appeared to be a reputable
institution, with attractive branch offices, a traveler's check
business, and a solid reputation for financing international trade.
It had high-powered allies in Washington and boasted relationships
with respected figures around the world.
All that changed in early 1988, when John Kerry, then a young senator
from Massachusetts, decided to probe the finances of Latin American
drug cartels.
Over the next three years, Kerry fought against intense opposition
from vested interests at home and abroad, from senior members of his
own party; and from the Reagan and Bush administrations, none of whom
were eager to see him succeed.
By the end, Kerry had helped dismantle a massive criminal enterprise
and exposed the infrastructure of BCCI and its affiliated
institutions, a web that law enforcement officials today acknowledge
would become a model for international terrorist financing.
As Kerry's investigation revealed in the late 1980s and early 1990s,
BCCI was interested in more than just enriching its clients -- it had
a fundamentally anti-Western mission.
Among the stated goals of its Pakistani founder were to "fight the
evil influence of the West," and finance Muslim terrorist
organizations.
In retrospect, Kerry's investigation had uncovered an institution at
the fulcrum of America's first great post-Cold War security challenge.
More than a decade later, Kerry is his party's nominee for president,
and terrorist financing is anything but a back-burner issue.
The Bush campaign has settled on a new strategy for attacking Kerry:
Portray him as a do-nothing senator who's weak on fighting terrorism.
"After 19 years in the Senate, he's had thousands of votes, but few
signature achievements," President Bush charged recently at a campaign
rally in Pittsburgh; spin that's been echoed by Bush's surrogates,
conservative pundits, and mainstream reporters alike, and by a steady
barrage of campaign ads suggesting that the one thing Kerry did do in
Congress was prove he knew nothing about terrorism.
Ridiculing the senator for not mentioning al Qaeda in his 1997 book on
terrorism, one ad asks: "How can John Kerry win a war [on terror] if
he doesn't know the enemy?"
If that line of attack has been effective, it's partly because Kerry
does not have a record like the chamber's dealmakers such as Sens. Joe
Lieberman (D-Conn.) or Orrin Hatch (R-Utah).
Though Kerry has been a key backer of bills on housing reform,
immigration, and the environment, there are indeed few pieces of
landmark legislation that owe their passage to Kerry.
But legislation is only one facet of a senator's record.
As the BCCI investigation shows, Kerry developed a very different
record of accomplishment -- one often as vital, if not more so, than
passage of bills.
Kerry's probe didn't create any popular new governmental programs,
reform the tax code, or eliminate bureaucratic waste and fraud.
Instead, he shrewdly used the Senate's oversight powers to address the
threat of terrorism well before it was in vogue, and dismantled a key
terrorist weapon.
In the process, observers saw a senator with tremendous fortitude, and
a willingness to put the public good ahead of his own career.
Those qualities might be hard to communicate to voters via one-line
sound bites, but they would surely aid Kerry as president in his
attempts to battle the threat of terrorism.
From Drug Lords to Lobbyists
Despite having helmed the initial probe which led to the Iran-Contra
investigation, Kerry was left off the elite Iran-Contra committee in
1987.
As a consolation prize, the Democratic leadership in Congress made
Kerry the chairman of the Subcommittee on Terrorism, Narcotics, and
International Operations and told him to dig into the Contra-drug
connection.
Kerry turned to BCCI early in the second year of the probe when his
investigators learned that Panamanian strongman Manuel Noriega was
laundering drug profits through the bank on behalf of the Medellin
cartel.
By March 1988, Kerry's subcommittee had obtained permission from the
Foreign Relations Committee to seek subpoenas for both BCCI and
individuals at the bank involved in handling Noriega's assets, as well
as those handling the accounts of others in Panama and Colombia.
Very quickly, though, Kerry faced a roadblock.
Citing concerns that the senator's requests would interfere with an
ongoing sting operation in Tampa, the Justice Department delayed the
subpoenas until 1988, at which point the subcommittee's mandate was
running out.
BCCI, meanwhile, had its own connections.
Prominent figures with ties to the bank included former president
Jimmy Carter's budget director, Bert Lance, and a bevy of powerful
Washington lobbyists with close ties to President George H.W. Bush, a
web of influence that may have helped the bank evade previous
investigations.
In 1985 and 1986, for instance, the Reagan administration launched no
investigation even after the CIA had sent reports to the Treasury,
Commerce, and State Departments bluntly describing the bank's role in
drug-money laundering and other illegal activities.
In the spring of 1989, Kerry hit another obstacle.
Foreign Relations Committee chairman Claiborne Pell (D-R.I.), under
pressure from both parties, formally asked Kerry to end his probe.
Worried the information he had collected would languish, Kerry quickly
dispatched investigator Jack Blum to present the information his
committee had found about BCCI's money-laundering operations to the
Justice Department.
But according to Blum, the Justice Department failed to follow up.
The young senator from Massachusetts, thus, faced a difficult choice.
Kerry could play ball with the establishment and back away from BCCI,
or he could stay focused on the public interest and gamble his
political reputation by pushing forward.
BCCI and the Bluebloods
Kerry opted in 1989 to take the same information that had been coldly
received at the Justice Department and bring it to New York District
Attorney Robert Morgenthau, who agreed to begin a criminal
investigation of BCCI, based on Kerry's leads.
Kerry also continued to keep up the public pressure.
In 1990, when the Bush administration gave the bank a minor slap on
the wrist for its money laundering practices, Kerry went on national
television to slam the decision.
"We send drug people to jail for the rest of their life," he said,
"and these guys who are bankers in the corporate world seem to just
walk away, and it's business as usual... When banks engage knowingly
in the laundering of money, they should be shut down. It's that
simple, it really is."
He would soon have a chance to turn his declarations into action.
In early 1991, the Justice Department concluded its Tampa probe with a
plea deal allowing BCCI officials to stay out of court.
At the same time, news reports indicated that Washington elder
statesman Clark Clifford might be indicted for defrauding bank
regulators and helping BCCI maintain a shell in the United States.
Kerry pounced, demanding (and winning) authorization from the Foreign
Relations Committee to open a broad investigation into the bank in May
1991.
Almost immediately, the senator faced a new round of pressure to
relent.
Jacqueline Kennedy Onassis and Democratic doyenne Pamela Harriman
personally called Kerry to object, as did his fellow senators.
"What are you doing to my friend Clark Clifford?," staffers recalled
them asking, according to The Washington Post.
BCCI itself hired an army of lawyers, PR specialists, and lobbyists,
including former members of Congress, to thwart the investigation.
But Kerry refused to back off, and his hearings began to expose the
ways in which international terrorism was financed.
As Kerry's subcommittee discovered, BCCI catered to many of the most
notorious tyrants and thugs of the late 20th century, including Iraqi
dictator Saddam Hussein, the heads of the Medellin cocaine cartel, and
Abu Nidal, the notorious Palestinian terrorist.
According to the CIA, it also did business with those who went on to
lead al Qaeda.
And BCCI went beyond merely offering financial assistance to dictators
and terrorists:
According to Time, the operation itself was an elaborate fraud,
replete with a "global intelligence operation and a Mafia-like
enforcement squad."
By July 1991, Kerry's work paid off.
That month, British and U.S. regulators finally responded to the
evidence provided by Kerry, Morgenthau, and a concurrent investigation
by the Federal Reserve.
BCCI was shut down in seven countries, restricted in dozens more, and
served indictments for grand larceny, bribery, and money laundering.
The actions effectively put it out of business what Morgenthau called,
"one of the biggest criminal enterprises in world history."
Bin Laden's Bankers
Kerry's record in the BCCI affair, of course, contrasts sharply with
Bush's.
The current president's career as an oilman was always marked by the
kind of insider cronyism that Kerry resisted.
Even more startling, as a director of Texas-based Harken Energy, Bush
himself did business with BCCI-connected institutions almost at the
same time Kerry was fighting the bank.
As The Wall Street Journal reported in 1991, there was a "mosaic of
BCCI connections surrounding [Harken] since George W. Bush came on
board."
In 1987, Bush secured a critical $25 million-loan from a bank the
Kerry Commission would later reveal to be a BCCI joint venture.
Certainly, Bush did not suspect BCCI had such questionable connections
at the time.
But still, the president's history suggests his attacks on Kerry's
national-security credentials come from a position of little
authority.
As the presidential campaign enters its final stretch, Kerry's BCCI
experience is important for two reasons.
First, it reveals Kerry's foresight in fighting terrorism that is
critical for any president in this age of asymmetrical threats.
As The Washington Post noted, "years before money laundering became a
centerpiece of antiterrorist efforts... Kerry crusaded for controls on
global money laundering in the name of national security."
Make no mistake about it, BCCI would have been a player.
A decade after Kerry helped shut the bank down, the CIA discovered
Osama bin Laden was among those with accounts at the bank.
A French intelligence report obtained by The Washington Post in 2002
identified dozens of companies and individuals who were involved with
BCCI and were found to be dealing with bin Laden after the bank
collapsed, and that the financial network operated by bin Laden today
"is similar to the network put in place in the 1980s by BCCI."
As one senior U.S. investigator said in 2002, "BCCI was the mother and
father of terrorist financing operations."
Second, the BCCI affair showed Kerry to be a politician driven by a
sense of mission, rather than expediency -- even when it meant
ruffling feathers.
Perhaps Sen. Hank Brown, the ranking Republican on Kerry's
subcommittee, put it best. "John Kerry was willing to spearhead this
difficult investigation," Brown said.
"Because many important members of his own party were involved in this
scandal, it was a distasteful subject for other committee and
subcommittee chairmen to investigate. They did not. John Kerry did."
_____________________________________________________________
Harry
.
|
