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1994-05-02
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<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>
<p>[Bombay, The Times of India in English, 3 Aug 91, pp. 1, 11]
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> The committee is investigating the government's handling of
the BCCI affair.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> "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."
</p>
<p> "Mr. Clifford and Mr. Altman are due to testify before the
committee next month."
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> Mr. Blum disclosed that Mr. Awan's comments concerning the
alleged advice to flee the United States were tape-recorded by
undercover customs officers.
</p>
<p> 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.
</p>
<p> 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.
</p>
<p> "The government never had deposits nor any kind of fund
transfers with the BCCI," Mr. Cavallo told a news conference.
</p>
</body>
</article>
</text>