Bank of Credit and Commerce International
The Bank of Credit and Commerce International was at one time the 7th largest bank in the world. It came under investigation in numerous countries worldwide in the mid 1980s for money laundering for narcotics and weapons sellers. Time magazine called it the World's Sleaziest Bank.
The bank was called First American Bankshares and became the largest in Washington. Robert Morgenthau, the district attorney in New York City, disclosed that his office had found evidence that the parent company of Clifford's bank was secretly controlled by BCCI. The district attorney convened a grand jury to determine whether Clifford and his partner, Robert Altman, had deliberately misled federal regulators when the two men assured them that BCCI would have no control.
Jackson Stephens, a billionaire banker in Little Rock, Arkansas, and one of presidential candidate Bill Clinton's main supporters, played a key role in setting up the illegal purchase of the American branch of the BCCI of two American banks.
Both First American National Bank and Georgia National Bank, owned by Bert Lance, were purchased by BCCI front man and Stephens business associate Gaith Pharon. Stephens' family bank, the Worthern National Bank (later renamed Boatman's Bank), extended a two million dollar loan to the 1992 Clinton presidential campaign.
Stephens was named in the court records as having brought Pharon together with Stephens' close friend Bert Lance. Lance was a former OMB nominee under President Jimmy Carter who was denied confirmation due to a banking scandal.
BCCI founder Agha Hasan Abedi was introduced to Lance by Stephens. Stephens, Lance, and First American Bank director and longtime Democratic party power broker Clark Clifford all maintained that they did not know the group of Pakinstani and Saudi investors headed by Pharon, which they were dealing with, were actually fronting for BCCI.
Clifford's predicament worsened when it was disclosed he had made about $6 million in profits from bank stock that he bought with an unsecured loan from BCCI. A New York grand jury handed up indictments, as did the Justice Department. Clifford's assets in New York, where he kept most of his investments, were frozen.
The "Report to the Committee on Foreign Relations United States Senate" led by Senators John Kerry and Hank Brown noted that a key strategy of "BCCI's successful secret acquisitions of U.S. banks in the face of regulatory suspicion was its aggressive use of a series of prominent Americans," Clifford among them. Clifford, who prided himself on decades of meticulously ethical civic conduct, summed his predicament up when he told a reporter from the New York Times, "I have a choice of either seeming stupid or venal." Indictments against Clifford had been set aside because of his failing health.
- Summary of Charges, US Board of Governors of the Federal Reserve, No. 91-043, July 29, 1992, pp. 1-11.
- The BCCI Affair, A Report to the Committee on Foreign Relations, 102d Congress 2d Session Senate, December 1992.