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Text File | 1994-05-02 | 6KB | 140 lines

<text> <title> BCCI Reportedly Aided Looting of Country </title> <article> <hdr> Joint Publications Research Service, September 23, 1991 Economic: BCCI Reportedly Aided Looting of Country </hdr> <body> [Bombay, The Times of India in English, 3 Aug 91, pp. 1, 11] A U.S. Senate committee, investigating the Bank of Commerce and Credit International (BCCI) is also inquiring into the allegation that the Pakistan-established bank had cheated the Indian government, reports UNI. The NBC News, which gave this information here last night, said the committee investigators were looking into the new charges that America's internal revenue service (IRS) had ignored evidence that the BCCI in the U.S. was also involved in huge money laundering operations that allegedly ripped off the Indian government. It interviewed the Washington-based private investigator Mr. Michael Hershman, who had worked for the Government of India. He told the NBC News that top IRS officials had refused to investigate massive money-laundering and tax-evasion charges involving the BCCI back in 1986. The NBC News said the investigation involved the illegal diversion of tens of millions of dollars from India's poor economy into accounts at the BCCI. The money was allegedly being diverted by top industrialists and key aides to the late prime minister, Mr. Rajiv Gandhi, it alleged. Mr. Hershman claimed that he had brought the IRS ample evidence from his own investigation, revealing formulation of the front companies and the taking of money out of India. The NBC News said it had obtained from the finance ministry letters asking the IRS to enter a joint investigation into the diversion and tax evasion by frontmen working in both India and the U.S. The NBC said Hershman's investigation had uncovered slush funds. Millions moved through holding companies and schemes designed to evade taxes both in India and the U.S. Mr. Hershman said even after he had laid out the BCCI scheme for the IRS, the latter showed no interest. "If the IRS had investigated in 1986, the entire BCCI scandal would have been unravelled," he added. The NBC News said the IRS declined to comment on its report arguing that the confidentiality law precluded the organization from talking about its investigations. Meanwhile, the Senate panel, during its day-long hearing yesterday, was told about how the BCCI had helped some Pakistani officials in stealing U.S. funds meant for the Afghan rebels. It was also told that many of the Pakistani military officials, who were responsible for assisting and supporting the Afghan rebel movement, were stealing the U.S. foreign assistance funds, and using the BCCI both for hiding the money they stole and to market and manage the funds that came from the sale of heroin. The committee is investigating the government's handling of the BCCI affair. Many other bombshell disclosures were made at the Senate committee hearing, including a charge that two of Washington's top lawyers who now head what was a BCCI subsidiary, advised a bank manager wanted in connection with drug money laundering to flee the country, adds PTI. The Senate committee chairman, Senator John Kerry, said he had a copy of a CIA letter to other agencies five years ago about the criminal connections of the bank. Washington-based lawyer, Mr. Jack Blum, testified under oath that Mr. Clark Clifford, now chairman of First American and leading Washington lawyer, former defense minister and Democratic party elder statesman, and Mr. Robert Altman, president of First American, Mr. Clifford's law partner, who represented Arab interests in the purchase of First American, advised the man who controlled former Panamanian president Mr. Manuel Noriega's multimillion dollar bank account in Florida to flee the country to avoid a subpoena issued in 1988. The advice to flee the country and not to wait to have to respond to the subpoena was reportedly given to one Mr. Amjad Awan, who looked after the Noriega account. "Amjad Awan," said Mr. Blum, "says to a customs undercover he's being advised by BCCI lawyers--in this case Robert Altman--that he's going to leave the country for Paris, never to return, so that he doesn't have to answer the subpoena and talk to us. The people representing him at that time were Robert Altman and his partner (John) Kovin, and of course, the senior partner in the firm, Mr. Clifford." "Mr. Clifford and Mr. Altman are due to testify before the committee next month." Mr. Awan failed to heed the advice allegedly given by Mr. Clifford and Mr. Altman and was sentenced to 12 years in prison in December 1990 along with four other BCCI officials in a scheme to launder $32 million in cocaine profits for the criminal Medellin cocaine cartel of Colombia through BCCI outlets. He testified in secret before the Senate sub-committee on September 30, 1988 and admitted that he had helped General Noriega set up bank accounts of "40 to 50 million dollars" sometime in 1982. Mr. Blum disclosed that Mr. Awan's comments concerning the alleged advice to flee the United States were tape-recorded by undercover customs officers. Meanwhile, Reuter, quoting the Argentine economy minister, Mr. Domingo Cavallo, reports from Buenos Aires that Argentina's government never had funds deposited in the BCCI. The report said Mr. Cavallo vented his rage at media reports linking the Argentine President, Mr. Carlos Menem, with a controversial former BCCI stockholder, Saudi businessman Mr. Gaith Pharaon. "The government never had deposits nor any kind of fund transfers with the BCCI," Mr. Cavallo told a news conference. </body> </article> </text>