Wednesday, June 4, 2008


ABC NEWS The US military has awarded an $80 million contract to a prominent Saudi financier who has been indicted by the US Justice Department. The contract to supply jet fuel to American bases in Afghanistan was awarded to the Attock Refinery Ltd, a Pakistani-based refinery owned by Gaith Pharaon. Pharaon is wanted in connection with his alleged role at the failed Bank of Credit and Commerce International, and the CenTrust savings and loan scandal, which cost US tax payers $1.7 billion.

The Saudi businessman was also named in a 2002 French parliamentary report as having links to informal money transfer networks called hawala, known to be used by traders and terrorists, including Al Qaeda.

Interestingly, Pharaon was also an investor in President George W. Bush's first business venture, Arbusto Energy.

A spokesman for the FBI said Pharaon was not wanted in connection with the French report, but confirmed he was still sought by the US Justice Department. "Ghaith Pharaon is an FBI fugitive indicted in both the BCCI and CENTRUST case," said Richard Kolko, a spokesman for the FBI. "If anyone has information on his location, they are requested to contact the FBI or the US Embassy."

PROGRESSIVE REVIEW, 1998 With the settlement of civil fraud charges against Clark Clifford and Robert Altman, the puny and often diverted investigation into the American branch of the BCCI scandal effectively comes to an end. Under the deal, the pair will have to surrender $5 million in stock in First American Bankshares, which had been illegally controlled by BCCI as part of the biggest banking scandal in world history. They will, however, get to keep $10-15 million in proceeds obtained during their tenure as First American attorneys.

Despite such sums, the Clifford/Altman aspect of the BCCI affair was only a minor part of the story. According to one journalist who investigated BCCI's American operations, up to 100 politicians and lawyers in Washington might be found criminally liable if the case were fully pursued. One reason it wasn't may have been the fact that trails in the case led to both Republicans and Democrats. For example, in 1988, a few days before the supposedly surprise arrest of five BCCI officials, some of the world's most powerful drug dealers quietly withdrew millions of dollars from the bank. Some government investigators believe the dealers were tipped off by sources within the Reagan administration. Again in 1991 the acting US Attorney in Miami found himself rebuffed by the Bush Justice Department in his efforts to indict BCCI and some its principal officers on tax fraud charges.

BCCI got its start in the US with the help of Jackson Stephens, then board chair of Worthen Bank in Arkansas, which would later keep Bill Clinton's 1992 primary campaign afloat with a multi-million dollar line of credit. He was described during that campaign by the New York Post as a man who was to "Clinton what Bert Lance was to candidate Jimmy Carter."

Stephens first got to know Mochtar Riady -- of Clinton fundraising fame -- in 1977 when Riady was considering buying Bert Lance's interest in the National Bank of Georgia. That year, according to journalist Alexander Cockburn, Stephens "brokered the arrival" of BCCI to this country, and steered BCCI's founder, Hassan Abedi, to Lance -- whose bank was eventually taken over by a BCCI front man -- Ghaith Pharaon. Pharaon later sold his bank to First American. Pharaon has been fined $37 million by the Federal Reserve Board and is still a fugitive. Later, Stephens joined Mochtar Riady in the purchase of a BCCI subsidiary in Hong Kong.

There are interesting ties wherever you turn in the BCCI matter. For example, former special prosecutor Robert Fiske worked with Robert Bennett, now Clinton's lawyer, on the Altman-Clifford case, as did later Deputy Attorney General Jamie Gorelick.

The BCCI scandal cheated depositors out of over $10 billion worldwide. Many of these were lower income people now being paid off at 15 and 25 cents on the dollar for damage done by a illegal operation willingly used not only by hundreds of drug dealers and other criminals from various countries but by the intelligence services of five nations (including the CIA) and at least one government, Pakistan, seeking to finance its nuclear weapons development.

Things always moved a little too smoothly in the BCCI investigation, leaving scores of unanswered questions and, so far as can be determined, hardly anyone to blame. The American media has studiously downplayed the story to the end. The New York Times, for example, put the Altman-Clifford settlement on its business page.


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