BCCI

The Bank of Credit and Commerce International (BCCI), founded by Pakistani financier Agha Hasan Abedi in 1972, became the 7th largest private bank in the world by assets with over 400 branches in 78 countries with $20 billion in assets, registered in Luxumbourg.

BCCI was created with capital from the Bank of America (25%) and from Sheikh Zayed bin Sultan Al Nahyan, the ruler of Abu Dhabi in the United Arab Emirates.

BCCI expanded rapidly in the 1970s. In 1973, BCCI had 19 branches in five countries and eight more were added in 1974. At the end of 1976 the bank had 108 branches and assets of $1.6 billion. The rapid growth caused major capital problems. Some banking insiders believed that BCCI was using cash deposits to fund daily operating expenses, rather than making solid investments. By 1980, BCCI had 150 branches in 46 countries and assets of over $4 billion. That was the year Bank of America decided to reduce its holdings in the bank, and a number of other groups invested in the bank.

In 1982, 15 Middle Eastern investors who were BCCI clients bought Financial General Bankshares, a large bank holding company headquartered in Washington, DC. The Federal Reserve Board received assurances that BCCI was not involved in the management of the company. Financial General was renamed First American Bankshares to quell some of the concerns, and Clark Clifford was named chairman. Clifford served as an adviser to five presidents. The bank's board was composed of several other distinguished American citizens. Even though the Fed was assured that BCCI was not involved in the purchase of FGB/First American, it was in fact involved from the beginning.

Abedi had wanted to buy FGB/First American in 1977, but BCCI's reputation in the US was not good so there was no hope of closing an American bank deal on its own. Abedi decided to use the First American Investors as nominees, and Clifford's law firm was retained as general counsel and handled almost all of BCCI's legal work. Once the bank was up and running BCCI was involved in all of First American's business matters. The rumors about BCCI and First American were so strong that there was little doubt that BCCI was the real owner of First American.

In 1988, young US Senator John Kerry from Massachusetts wanted to expose the finances of Latin American drug cartels, and for the next three years he faced strong opposition from vested interests abroad as well as at home. It seemed like members of his own party and the Reagan and Bush administrations didn't want him to succeed, either. But Kerry kept fighting and eventually helped take down a massive criminal enterprise. During that process he exposed the internal affairs of BCCI and its affiliated institutions. Law enforcement officials discovered that it was a model of international terrorist financing.

Kerry's investigation revealed that BCCI had an anti-Western mission. During the late 1980s and early 1990s, the stated goals of Abedi, the founder, were to "fight the evil influence of the West," and finance Muslim terrorists. Kerry's investigation uncovered America's first great post-Cold War security challenge, and BCCI was one of the main culprits.

In 1991, BCCI was the focus of a massive regulatory battle. Bank regulators and customs officials in seven countries raided the branches and locked down bank records. Abedi died in 1995 while under indictment in the UK and the United States for BCCI crimes. Pakistan refused to turn him over to authorities for extradition because Pakistani officials felt the charges were political and had no merit.