A New York Times editorial (7/24/91) typified much of the coverage of the Bank of Credit and Commerce International (BCCI) scandal when it chastised "the sluggish reaction of Attorney General Dick Thornburgh and his Justice Department," which failed to respond to mounting evidence of corruption in "what may well constitute the biggest banking scandal in history." Mr. Thornburgh, said the Times, "owes the American public an explanation."
While the Times and other major media were pointing fingers at the Justice Department, they failed to acknowledge--much less explain--their own sluggish reaction to a scandal that had been years in the making. A groundbreaking article on BCCI by Larry Gurwin in Regardie's (5/90) documented much of the information that became "hot news" 15 months later, including BCCI's links to the CIA, Saudi intelligence and the Pakistani military, as well as its secret control of First American Bank in Washington. At the time, however, major U.S. media paid little heed to the Regardie's expose, thereby encouraging the Justice Department to cover-up.
Even after Murray Waas reported in the Village Voice (8/6/91) that First American president Robert Altman had told a senior BCCI official in the U.S. to leave the country (which he did) in order to evade a pending Senate subpoena, the New York Times continued to give credence to dubious denials by Robert Bennett, the attorney for Altman and First American chair Clark Clifford. Bennett insisted that his clients had done thing illegal and were ignorant of the fact that BCCI controlled their bank. The damaging disclosures in the Voice were ignored by the Times and most U.S. media.
Another underreported story involves Bank of America's role in setting up BCCI in 1972. Bank of America provided crucial seed money and was a major BCCI shareholder, owning over 30 percent of the bank's stock until 1982. According to New York District Attorney Robert Morgenthau, BCCI was corrupt since its inception. But thus far, U.S. journalists have shown little interest in the involvement of Bank of America, which through a recent merger has become the nation's second-largest bank.
One of the few journalists in the national media to break ground on BCCI was NBC's Brian Ross. Time magazine deserves some credit for its belated cover story, "The World's Sleaziest Bank" (7/29/91), which asserted that BCCI ran a network of spies who engaged in bribery, drug and gun-running and assassinations. This prompted a spate of articles in U.S. newspapers that reported and, in some cases, elaborated upon Time's findings. But the picture of BCCI conveyed by Time and other media was that of a cash register gone berserk, indiscriminately doling out funds to all manner of customers--the CIA, Mossad, Abu Nidal, Saddam Hussein and seemingly anyone else with a penchant for dirty money.
For the most part, major U.S. media have focused on what BCCI did wrong, rather than on the wrong-doing of those who availed themselves of the bank's services. The Times (7/13/91), for example, was quick to exculpate the CIA, asserting "there is no evidence that the CIA or [BCCI] acted improperly in any of the transactions for American intelligence operations." In fact, there is plenty of evidence, which the Times continues to overlook.
Newsweek (8/12/91) bent over backwards to polish the CIA's image in an article flagged by a front-page teaser: "A BCCI Exclusive: How the CIA Penetrated the Bank." This laughable attempt at damage control featured unnamed intelligence sources portrayed the CIA as heroically holding its nose while keeping tabs on BCCI's corrupt customers.
What's missing from Newsweek and other U.S. news outlets is BCCI's role as a principal financial conduit for the Reagan administration's illegal, off-the-shelf foreign policy. Most of the CIA's funding for the Afghan rebels--by 1987, $630 million annually, with Saudi Arabia matching the CIA's contribution--passed through BCCI, according to recent news reports in the British press (The Economist, 8/3/91), which has provided more thorough coverage of the scandal than mainstream U.S. media. Yet Afghan rebel leaders bitterly complained that they were not receiving enough assistance, suggested that much of the money officially earmarked for the "mujahideen" was being channeled into other projects.
In 1985, Jonathan Pollard, who was convicted of spying on the U.S. for Israel, charged that the CIA was diverting funds from the Afghan revels to illegally support the Nicaraguan contras. The CIA's leaky arms pipeline to the Afghan rebels was the subject of an excellent article in the Philadelphia Inquirer (2/28/88) by Tim Weiner, but it provoked little follow-up by national media in the U.S.
More recently, the Associated Press (7/28/91) reported that the CIA had used BCCI "to funnel secret aid to guerrillas in Afghanistan, Nicaragua, and other countries." There are strong indications that some profits from illegal arms sales to Iran were stashed in a BCCI account, along with money earmarked for Afghan guerrillas.
Emerging from these disparate news accounts is an astounding yet unarticulated story concerning a massive diversion of covert money--using BCCI as a gigantic stash fund--that makes the Iran weapons sales scam pale by comparison.
The transfer of money allegedly destined for the Afghan rebels to various CIA-backed counterrevolutionary groups is just one of the scandals lurking behind the BCCI scandal. This bank was also a major channel for drug money laundered by corrupt Pakistani military officers, who administered the CIA's arms pipeline to the Afghan rebels while supplying much of the heroin that inundated the U.S. and Europe during the 1980s, a scandel Time (7/29/91) briefly alluded to. Despite such revelations, U.S. news media continue to promote the Reagan/Bush administrations' so-called war on drugs.
Since its inception, the CIA has relied on funny-money banks like BCCI to facilitate its clandestine operations. (The only major U.S. newspapers to not the close parallels between BCCI and Australia's Nugan Hand Bank was the Los Angeles Times, in two op-ed pieces--by Alexander Cockburn, 8/1/91, and Burton Hersh, 8/4/91.) And the practice hasn't stopped now that BCCI's intelligence cover has been blown. There are other BCCIs currently laundering dirty cash for spooks, terrorists and gangsters, but don't expect to read much about this in the national press.