BCCI affair: subversion, intrigue and corruption


By Prakash Karat

The closure of the BCCI (Bank of Credit and Commerce International) head office and most of its branches worldwide was sparked off by a Bank of England announcement that it had uncovered large-scale fraud and embezzlement of funds.

The BCCI was founded in 1972 by Pakistani banker Agha Hasan Abedi. Its shares are owned primarily by residents of the Gulf states and Pakistan. It has grown to be a major international bank worth $20 billion, with branches in 70 countries.

The closure has been followed by investigations both in Britain and the US of the bank's illegal operations. The main charges include defrauding depositors, making dubious loans to selected customers, laundering drug money, acting as a conduit for terrorist activities and CIA operations and being a convenient bank for corrupt rulers to salt away their illegal wealth.

There is also a long list of accusations of bribery of central banks and political authorities in various countries.

The Western media and governments are seeking to project an image that corruption and scandal are typical in Third World banks and that Western banking and political personalities were only minor accessories. Such a view was put forward in Time magazine, which gleefully drew a picture a cesspool of corruption and malpractices that it claimed BCCI symbolised.

What the mainstream Western media did not emphasise is the deep involvement of the Western economic and political powers in the affairs of BCCI, especially the role of the CIA.

But the CIA role could not be ignored. Newsweek revealed, "the CIA's Directorate of Operations had its own informants working inside the bank ... The CIA had 'intimate knowledge' of BCCI's alleged dealings with terrorists, drug dealers and corrupt government officials all over the world. BCCI was 'aggressively' targeted as a goldmine of intelligence on a wide variety of illicit activities."

The CIA had knowledge of BCCI's illegal activities years before. In 1986, the CIA prepared a five-page memo on the bank's activities and in 1989 a more detailed 30-page dossier.

The CIA penetration had a dual purpose and benefit. One was to keep track of what was going on in the world of drugs, big-time crime and government corruption. This information was invaluable for its subversive activities in many countries, to suborn and blackmail key personnel.

Secondly, given BCCI's willingness to undertake shady deals, it was a useful vehicle for CIA operations. It has now been established that BCCI was used in Pakistan to secretly channel $2 billion to the mujahideen in Afghanistan. It is also alleged that much of this money ended up in the pockets of corrupt Pakistani government and military officials.

Two BCCI branches in London were used as conduits for payment to 500 Britons on the CIA payroll. According to British intelligence sources, of these 500, 124 were employed in government or engaged in politics, 53 were scientists, 124 in communications and 90 in the media.

The intertwining of the US and BCCI interests is also evident from the fact that earlier the Bank of America held a 25% share in BCCI. The CIA is known to have used the Bank of America for its activities abroad.

The drug business and laundering of its proceeds is nothing new for the CIA. One has only to recall the enterprises run by the CIA in Laos and the "Golden Triangle" to ferry drugs. The profits of this drug trade funded mercenary anticommunist groups in Indochina.

The BCCI was also involved in the Iran-Contra scandal and as a conduit for funds for the contras in Nicaragua. The BCCI, with its origins in Pakistan, was closely linked to the late President Zia, who was himself was a beneficiary of the CIA. In the '80s, Pakistan became one of the CIA's biggest bases for covert operations, with a special focus on its counter-revolutionary activities against Afghanistan and other areas in the Middle East.

Some progressive and left-wing circles have argued that imperialist capital and Western governments were out to destroy BCCI as a successful Third World financial institution independent of their control. While this was a motivation, the essence of the BCCI affair was the collusion of the CIA and a bank owned by the ruling circles of the Third World to further imperialist aims.
[Abridged from the Indian socialist weekly, People's Democracy.]

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