Reply #12: Pakistan-BCCI-AQ Khan-Stephens

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http://www.orlingrabbe.com/part10.htm

In 1972 Pakistani banks were nationalized by President Bhutto. One of these banks was United Bank, whose president was Agha Hasan Abedi. Abedi subsequently joined with Sheik Zayad, ruler of Abu Dhabi and patron of the PLO, to found BCCI. To prevent nationalization, BCCI was chartered in Luxembourg. In 1975 it split into two entities, one remaining in Luxembourg and the other established in the Cayman Islands. The Cayman Islands part became a "bank within a bank." While the legal registration was in Luxembourg and the Cayman Islands, the actual operational head- quarters was moved to London.

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Abedi's attention was then brought to bear on Financial General, a Washington D.C.-based bank with headquarters a block from the White House. The bank had been acquired in April 1977 by an investor group led by William Middendorf II, who was Secretary of the Navy under Nixon and Ford. One member of the investor group was Jackson Stephens. Stephens then send salemen from his Little Rock firm Systematics to talk to Middendorf about providing banking software for Financial General, but they were firmly rejected. Stephens decided to wrest control of the bank from Middendorf. Jackson Stephens is a billionaire from Little Rock who owns the controlling interest in Worthen National Bank as well as in Stephens Inc., one of the largest privately owned investment banks outside Wall Street. In November 1977, he introduced BCCI-founder Abedi to Bert Lance, Carter's Director of the Office of Management and Budget, whom Stephens had met through Jimmy Carter, his old roommate from Naval Academy days. (Lance and Stephens, two Southern Baptists, had hit it off.) Lance also knew the people at Financial General, for it was Financial General that had sold to Lance controlling interest in the National Bank of Georgia in 1975.

Abedi in turn introduced Lance to Stanford-and-Harvard-(and Colorado School of Mines)-educated Ghaith Pharaon. Pharaon proceeded to acquire the stock of Bert Lance's National Bank of Georgia, a deal consummated on January 5, 1978, a day after Lance's $3.4 million loan from the First National Bank of Chicago was repaid by BCCI London. Pharaon was apparently acting on behalf of Abedi in the acquisition, at least in part. By then Lance had left the Carter administration, and he and Jackson Stephens joined together to help BCCI take over Financial General. A Financial General lawsuit filed on February 17 named "Bert Lance, Bank of Credit & Commerce International, Agha Hasan Abedi, Eugene J. Metzger, Jackson Stephens, Stephens Inc., Systematics Inc. and John Does numbers 1 through 25." Systematics was represented by C.J. Giroir, Webster Hubbell, and Hillary Rodham Clinton of the Rose Law Firm of Little Rock: "The suit was ultimately settled, but intriguingly, briefs for Systematics, a Stephens property, were submitted by a trio of lawyers including C.J. Giroir and Webster L. Hubbell and signed by Hillary Rodham" ("Who is Jack Ryan?" The Wall Street Journal, August 1, 1994). This BCCI-Lance-Stephens-Systematics-Hubbell-Clinton connection will continue to reappear in our story.


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The Federal Reserve finally approved the purchase in on April 19, 1982, and BCCI renamed the bank "First American" three months later. Clark Clifford was made chairman and Robert Altman president. The head of Bank Supervision at the Federal Reserve when BCCI's purchase was approved was Jack Ryan, who later became head of the Resolution Trust Corporation, in which role he denied Rep. Leach's requests for documents related to Madison Guaranty, the Whitewater thrift. What was the point of BCCI's takeover of First American? " 'They wanted an important stake across the street from the White House,' says one Washington banking executive, adding, 'Some people might think it is important to know about the outstanding loans and balances of Government officials'" (Time).

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In the meantime BCCI founder Abedi was committed to the development of an Islamic atomic bomb, even donating 500 million rupees for the creation of Pakistan's Gulam Ishaq Research Institute for nuclear development. BCCI was in some sense seen by Abedi as the financial competitor to the "committee of 30" that worked on behalf of Israel. (According to Israeli correspondents Tzadok Yehezkeli and Danny Sadeh: "Israel solicits money from wealthy Jews from all over the world for financing its nuclear weaponry programs. This fundraising drive is directed by a committee comprised of 30 Jewish millionaires" .) But while BCCI founder Abedi had intended BCCI to finance the development of a Pakistani nuclear bomb, this effort was compromised at the start by the presence of Kamal Adham, who through CCAH was the controlling power behind First American, and who had asked Clark Clifford to head up the bank. For Adham was both a CIA and a Mossad asset. Adham, in addition to being Faisal's most trusted advisor and the former head of Saudi intelligence, had attended CIA training school with the head of the Mossad. "Kamal Adham, who was the CIA's principal liason for the entire Middle East from the mid-1960's through 1979, was the lead frontman for BCCI in its takeover of First American, was an important nominee shareholder in BCCI, and remains one of the key players in the entire BCCI affair" (Senator John Kerry and Senator Hank Brown, The BCCI Affair: a Report to the Committee on Foreign Relations, United States Senate, December 1992). Perhaps that is why Pakistani's efforts to develop their own nuclear bomb met with repeated compromises, such as the following:


* "In 1983 a Dutch court convicted Dr. Abdul Qader Khan, head of Pakistan's nuclear program, on charges of stealing the blueprints for a uranium enrichment factory. . . . Kahn's lawyer was paid by BCCI. * "In 1984, three Pakistani nationals were indicted in Houston for attempting to buy and ship to Pakistan, high-speed switches designed to trigger nuclear weapons. The trio offered to pay in gold supplied by BCCI. * "In 1987 two Americans, Rita and Arnold Mandel, together with Hong Kong businessman Leung Yu Hung, were indicted by the U.S. Attorney in Sacramento, California, on charges of illegal importations of $1 billion worth of oscilloscopes and computer equipment for Pakistan's nuclear program. . . . BCCI facilitated " * "In 1987 in Philadelphia, Ashad Pervez, a Pakistani-born Canadian, was indicted for conspiring to export restricted specialty steel and metal used to enhance nuclear explosions. ... He . . . paid high prices with money delivered to the Toronto BCCI branch from BCCI London" (Rachel Ehrenfeld, Evil Money, HarperCollins, 1992). * BCCI became a important conduit for CIA intelligence, and also a ready target for the tenacles of the NSA. When Norman Bailey at the National Security Council urged NSA to "follow the money" as part of the "wars" on terrorism and drugs, the NSA had BCCI as one obvious banking target. The CIA was there also to assist in the monitoring of BCCI-related money flows of other intelligence and criminal enterprises. For BCCI had become a giant laundry machine, and the CIA made use of BCCI for their own covert money transfers.