TIME: Almanac 1995

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<text id=93TT1409> <title> Apr. 12, 1993: BCCI: The Trial </title> <history> TIME--The Weekly Newsmagazine--1993 Apr. 12, 1993 The Info Highway </history> <article> <source>Time Magazine</source> <hdr> BUSINESS, Page 42 BCCI: The Trial </hdr> <body> With partner Clark Clifford ailing and absent, Robert Altman stands alone, accused of bribery and fraud By JONATHAN BEATY and S.C. GWYNNE--With reporting by John F. Dickerson/New York Beaty, a TIME senior correspondent, and Gwynne, TIME's business editor, are co-authors of The Outlaw Bank, to be published this month by Random House. For Clark McAdams Clifford, erstwhile dean of Washington powerbrokers and one of the preeminent political figures of the postwar era, what is happening now must seem a living nightmare. While his partner, protege and surrogate son, Robert Altman, began a showcase trial in Manhattan last week for crimes he and Clifford are accused of committing on behalf of the Bank of Credit & Commerce International, Clifford lay bedridden in a Washington hospital room, too weak even to speak on the telephone. He has been stripped of his title as chairman of the First American Bank. His once powerful Washington law firm, Clifford & Warnke, has been dissolved. Though Clifford, who was Harry Truman's political counselor and Lyndon Johnson's Defense Secretary, was one of the richest lawyers in the U.S., his wealth has now been frozen pending possible seizure, leaving him virtually without resources and at the mercy of a state court. The thing he says he values most, his good name, has been forever tarnished by its intimate association with a $20 billion fraud. To add to his manifold miseries, the frail 86-year-old recently underwent heart-bypass surgery. Some 20 months after B.C.C.I. was seized around the world, the celebrated case has finally come to trial. And though Clifford is not being tried--he has been granted an indefinite reprieve because of his poor health--there is little doubt in anyone's mind that Altman's trial will also be a prosecution, in absentia, of the older man. If Altman is found guilty, history will probably find Clifford guilty too. For now, however, Altman stands alone in what is thus far the only real trial of B.C.C.I. ever to take place anywhere in the world. His fate will play out in a small, dingy courtroom in lower Manhattan in a trial likely to go on for six months and hear more than 125 witnesses. Opening arguments last week were spirited, degenerating at times into shouting matches and name-calling. For anyone who doubted Clifford's spectral presence, Altman's attorney Gustave Newman waved a huge placard containing photographs of Clifford with the various Presidents he served. The point was to show that Clifford and, by association Altman were convenient scapegoats and media targets because of Clifford's name. When prosecutor John Moscow concluded his opening remarks--which included a promise of at least one witness who will testify to being present when Clifford outlined a scheme to deceive U.S. banking regulators--Newman leaped from his chair before Moscow could turn from the jury. "What you just heard characterizes this whole prosecution," snapped Newman. "Cover up, leave out the key facts, don't tell them everything." Meanwhile, Altman's family had turned into something of a public relations juggernaut. His wife, the actress Lynda ("Wonder Woman") Carter, was featured in a lengthy story in the Washington Post, standing by her man. Altman's mother Sophie and sisters Nancy Altman and Janet Altman Spragens have been busily telephoning reporters and editors from most major news organizations, handing out packets of information challenging the prosecution's claims. Spragens has written two editorials for the Wall Street Journal, and appeared on ABC's Nightline to defend her brother. Before opening arguments were finished, the judge placed a gag order on both the Altman sisters and the prosecution. The case being brought against Altman is the fruit of a five-year investigation of B.C.C.I. by Manhattan District Attorney Robert Morgenthau, which has produced a series of indictments of the bank and its chief executives. Morgenthau's probe has focused on the role of Clifford and Altman in helping B.C.C.I. secretly acquire control of First American Bank, a Washington holding company with subsidiaries in New York and other states, and the National Bank of Georgia. They stand accused of, among other charges, accepting bribes in exchange for that help. It is sometimes difficult to remember why B.C.C.I. caused such a stir when the scandal first erupted in 1991, or why Altman now faces a possible 32 years in prison. The B.C.C.I. scandal was first distinguished by its sheer volume. Pakistani founder Agha Hasan Abedi had built his London-based Third World-consortium bank into a $23 billion powerhouse operating in 73 countries. But by the time the liquidators started sifting through the wreckage following B.C.C.I.'s global seizure in 1991, they found less than $3 billion remaining. That meant that $20 billion had been either stolen, misappropriated or lost in a host of shady financial transactions. Second, B.C.C.I., earlier convicted of drug-money laundering in Florida, drew attention because it acquired First American, the largest bank in Washington. Finally, B.C.C.I. was involved in international terrorism, large-scale money laundering for the likes of Colombia's Medellin cartel, illegal-weapons dealing, and as a middleman in such scandals as the Iran-contra affair. All that put B.C.C.I. squarely in the headlines, but what kept it there was revelations that agencies of the U.S. government had known for many years how bad this bank was and even that it had secretly acquired Clifford's bank. Detailed information about the bank's criminal activities reached the State Department, Justice, Treasury, the CIA and even the White House's National Security Council by the mid-1980s, six years before the bank was seized in the U.S. Some of this information--such as a now famous 1985 CIA memo describing B.C.C.I.'s criminal activities and its takeover of American banks that landed on Treasury Secretary Donald Regan's desk--simply disappeared from the CIA's records, never to resurface. For a decade criminal complaints against the bank were ignored or derailed by the Justice Department and other agencies. In effect, that failure to act meant that B.C.C.I. was actually being aided and abetted by the very government agencies that later "investigated" the bank. The question that continues to haunt the B.C.C.I. story is why B.C.C.I. remained immune for so long. The lengthy investigations of B.C.C.I. provide an answer: B.C.C.I. was a de facto arm of U.S. covert foreign policy in the 1980s, particularly the rough-riding version of that policy embodied by former CIA chief William Casey. B.C.C.I. was deeply involved with the U.S. intelligence community; it was involved in moving money and weapons to Iran and the Nicaraguan contras; it was employed in the covert U.S. effort, coordinated through Pakistan, to supply the Afghan rebels with weapons and resources during their 10-year war against Soviet occupation. This accounts for early efforts to block attempts to curb B.C.C.I.; the later cover-up was partly to conceal the government's failure to act upon its early knowledge of the bank's criminality. For such a large scandal, affecting so many depositors in so many countries, remarkably few of the perpetrators have been brought to justice. In the U.S. a mere five B.C.C.I. employees are serving time for money laundering. In Abu Dhabi, ruler Zayed bin Sultan al Nahayan--the former owner of the bank who personally lost billions in its collapse--continues to hold 13 high-ranking officers under house arrest. Though founder Abedi has been indicted, Pakistani officials say he will probably not be extradited to the U.S., and he has not been charged in Pakistan. Key front man Kamal Adham, former head of Saudi intelligence, has pleaded guilty in New York and agreed to pay a $105 million fine; another of Abedi's main fronts, Saudi tycoon Ghaith Pharaon, remains at large. That leaves Altman to stand against Morgenthau's prodigious investigation. If he is convicted, Altman is likely not to have the option, as Michael Milken and Ivan Boesky had, of serving light time at a minimum-security federal prison. The State of New York has only a limited number of minimum-security jails and none for those with sentences longer than two years, which means Altman could end up in Attica. If he is acquitted, he and Clifford still must face federal charges in Washington, though the case there is far less lengthy and detailed than Morgenthau's. Whatever the verdict, the prosecution of Robert Altman is likely to be the only time the world will ever see a full-scale examination of the rogue bank. </body> </article> </text>