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60 - PLACES/COUNTRIES/Bahrain.md

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+---
+category: "Country"
+tags:
+  - Country
+  - Bahrain
+  - BCCI
+  - PersianGulf
+  - OffshoreFinance
+  - MiddleEast
+summary: "Persian Gulf island state, one of BCCI's earliest growth markets, whose ruling family was among the bank's ostensible owners and where Ghaith Pharaon's defaulted BCCI loans were booked."
+location: "Bahrain"
+created: 2026-09-23
+updated: 2026-09-23
+---
+
+Bahrain is an island state in the [[Persian Gulf]]. It was one of the markets in which the [[Bank of Credit and Commerce International]] (BCCI) grew fastest in its first years, its ruling family was among the Gulf families presented to the outside world as the bank's owners, and BCCI's offices there carried loans to the Saudi businessman [[Ghaith R. Pharaon]] and to the [[Saigol family]] that auditors later found to be in default or misrepresented.[^1][^2][^3]
+
+### The Federation Talks
+
+In 1968, after Britain announced its withdrawal from the Gulf, [[Zayed bin Sultan AL-Nahayan|Sheikh Zayed]] of [[Abu Dhabi]] and [[Rashid bin Saeed Al Maktoum|Sheikh Rashid]] of [[Dubai]] called for a federation that would include the seven Trucial States and also [[Qatar]] and Bahrain; the rulers of the nine states held a constitutional conference in Dubai from February 25 to 27, 1968. The federation formally established on December 2, 1971, as the [[United Arab Emirates]] was formed by six of the Trucial States, with the seventh joining the following year; Bahrain was not among them.[^4][^5]
+
+### BCCI
+
+"Fueled in part by infusions of petrodollar deposits from Gulf State rulers during the hey-day of the OPEC years," the Senate report of [[John Kerry]] and [[Hank Brown]] stated, "BCCI's early growth was exponential, especially in the United Arab Emirates, the Sultanate of Oman, Yemen, and Bahrain." It gave the bank's growth over its first five years:[^1]
+
+| Year | Branches | Countries | Assets | Growth |
+|---|---|---|---|---|
+| 1973 | 19 | 5 | $200 million | |
+| 1974 | 27 | 7 | $610 million | 204% |
+| 1975 | 64 | 13 | $1.2 billion | 98% |
+| 1976 | 108 | 21 | $1.6 billion | 37% |
+| 1977 | 146 | 43 | $2.2 billion | 33% |
+
+A 1977 record of BCCI's shareholders from [[Bank of America]] files showed, in the report's words, that "the Pakistanis actually owned BCCI at a time when to the outside world, the bank was ostensibly owned by oil-rich Middle Eastern Arabs, including the ruling families of Bahrain, Sharjah, Dubai, Saudi Arabia, and Iran, as well as that of Abu Dhabi."[^1]
+
+[[Nazir Chinoy]], manager of BCCI in [[Paris]], told the Senate that the "profits" Pharaon made on his interest in [[CenTrust Savings Bank|CenTrust]] of [[Miami]], a transaction financed through BCCI Paris, "were transferred to BCCI's offices in Bahrain as a means of reducing Pharaon's defaults to BCCI there, and demonstrating to auditors that Pharaon's loans from BCCI were being serviced."[^2] In its audit reports of 1990, [[Price Waterhouse]] found no evidence that the Saigol family, which owed BCCI 44 million dollars, was repaying loans or interest, and reported: "Representations previously given about the beneficial ownership of companies to which new loans were extended in Bahrain in 1989 have been false. The loans have been given, in part, to repay delinquent loans in other locations."[^3]
+
+### Ambassador Hostler
+
+[[Charles W. Hostler]], United States ambassador to Bahrain at the time of the Senate inquiry, had met the Lebanese businessman [[Mohammed Hammoud]] in [[Beirut]] in the 1960s as a young Air Force officer, when Hammoud's wife taught him Arabic; he later managed [[Douglas Aircraft Company|Douglas Aircraft]]'s office in [[Lebanon]] from 1965 to 1967 and worked for [[McDonnell Douglas]]. Hammoud, a front man for BCCI, bought the shares in [[First American Bank|First American]] held by [[Clark Clifford]] and [[Robert Altman]]. Hostler managed Hammoud's real estate investments in the [[United States]], and told the subcommittee he had advised Hammoud on three properties: "vacant land" in Sherman, Connecticut, an "old building" in Boston and a "tear-down" in [[New York City]].[^6]
+
+### Footnotes
+
+[^1]: Kerry, Senator John, and Senator Hank Brown. *The BCCI Affair: A Report to the Committee on Foreign Relations, United States Senate.* December 1992, ch. 3, "The Origin and Early Years of BCCI." https://irp.fas.org/congress/1992_rpt/bcci/03hist.htm
+[^2]: Kerry and Brown, *The BCCI Affair,* ch. 7, "BCCI in the United States, Part Two: Acquisition, Consolidation, and Consequences." https://irp.fas.org/congress/1992_rpt/bcci/07later.htm
+[^3]: Kerry and Brown, *The BCCI Affair,* ch. 10, "BCCI and Its Accountants." https://irp.fas.org/congress/1992_rpt/bcci/10accounta.htm
+[^4]: United Arab Emirates, Ministry of Foreign Affairs, "History," archived copy. https://web.archive.org/web/2024/https://www.mofa.gov.ae/en/the-uae/history
+[^5]: United Arab Emirates Government, "History," The Official Portal of the UAE Government, accessed September 23, 2026. https://u.ae/en/about-the-uae/history
+[^6]: Kerry and Brown, *The BCCI Affair,* ch. 15, "Mohammed Hammoud: BCCI's Flexible Front-Man." https://irp.fas.org/congress/1992_rpt/bcci/15hammoud.htm

60 - PLACES/COUNTRIES/United Arab Emirates.md

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+---
+category: "Country"
+tags:
+  - Country
+  - UAE
+  - BCCI
+  - PersianGulf
+  - AbuDhabi
+  - MiddleEast
+alias:
+  - UAE
+summary: "Gulf federation formed on December 2, 1971, whose president Sheikh Zayed and Abu Dhabi government held 77 percent of BCCI at its closure and kept its top officers out of foreign investigators' reach."
+start: 1971-12-02
+location: "United Arab Emirates"
+created: 2026-09-23
+updated: 2026-09-23
+---
+
+The United Arab Emirates (UAE) is a federation of seven emirates on the [[Persian Gulf]]: [[Abu Dhabi]], [[Dubai]], [[Sharjah]], Umm al-Quwain, Fujairah, Ajman and Ras al-Khaimah. It was formally established on December 2, 1971, under the leadership of [[Zayed bin Sultan AL-Nahayan|Sheikh Zayed bin Sultan Al Nahyan]], ruler of Abu Dhabi, who became its president. Abu Dhabi's government and ruling family were among the founding providers of capital to the [[Bank of Credit and Commerce International]] (BCCI) and, when the bank was closed in July 1991, its majority owners.[^1][^2][^3]
+
+### The Trucial States
+
+The Portuguese reached the Gulf in 1498 and were driven from Julfar, Dibba, Sohar and Muscat between 1633 and 1650; the Dutch entered Gulf trade after the Portuguese lost Hormuz in 1622. After defeating the Qawasim in 1820, the British signed a series of agreements with the sheikhs of the individual emirates from 1820 to 1853, under which the sheikhs undertook to keep the peace at sea and not to build large ships or fortify the coast. In 1892 the Exclusive Agreements bound the Trucial States not to dispose of any territory except to the [[United Kingdom]] and not to enter into relations with any foreign government without British consent, in return for British defense.[^2]
+
+Pearling provided income through the 19th and early 20th centuries, until the depression of the late 1920s and early 1930s and the Japanese cultured pearl destroyed the industry. Oil company teams began geological surveys in the early 1930s, and in 1962 the first cargo of crude oil was exported from Abu Dhabi. Zayed became ruler of Abu Dhabi on August 6, 1966, and increased Abu Dhabi's contributions to the Trucial States Development Fund, of which it became the largest donor. [[Rashid bin Saeed Al Maktoum]], de facto ruler of Dubai since 1939, turned to shipping, and Dubai began exporting oil in 1969.[^1][^2]
+
+### Federation
+
+In early 1968 Britain announced that it would withdraw from the Gulf by the end of 1971. Zayed and Rashid met on February 18, 1968, at Al Samha, and called for a federation that would include the seven Trucial States as well as [[Qatar]] and [[Bahrain]]; the rulers of the nine states held a constitutional conference in Dubai from February 25 to 27, 1968, agreeing eleven points as the basis for a "Federation of the Arab Emirates." On July 18, 1971, the rulers of six of the Trucial States, all but Ras al-Khaimah, decided to form a union and declared "the United Arab Emirates as an independent sovereign state being a part of the Arab World." The federation was formally established on December 2, 1971, and Ras al-Khaimah joined it the following year.[^1][^2]
+
+### BCCI
+
+The Senate report of [[John Kerry]] and [[Hank Brown]] stated that "Abu Dhabi was present at BCCI's creation as one of two providers of BCCI's capital. It was BCCI's largest depositor, and its largest borrower, and for most of BCCI's existence, its largest shareholder." BCCI's early growth was fastest "in the United Arab Emirates, the Sultanate of Oman, Yemen, and Bahrain." A 1977 record of BCCI's shareholders listed "Majid Al-Futaim of Dubai in the United Arab Emirates at just 4 percent" as its largest Arab owner.[^3][^4] In 1990, after auditors and regulators in Britain found fraud at the bank, the Abu Dhabi ruling family and government agreed "to formally buy the bank, assert control, guarantee its losses, replace BCCI's head with the head of its own BCCI affiliate, the Bank of Credit and Commerce Emirates (BCCE), move BCCI's operations and records from London to Abu Dhabi." When BCCI was closed on July 5, 1991, the government of Abu Dhabi, its ruling family and their investment company owned 77 percent of the bank, and "since the remaining 23 percent was actually held by nominees and by BCCI's alter-ego ICIC, Abu Dhabi was in fact BCCI's sole owner."[^3]
+
+After the closure, "it was in Abu Dhabi that most of BCCI's top officials remained, where they remain under the control of the Abu Dhabi government, under conditions said to be luxurious, which the Abu Dhabi government refuses to discuss," the report stated, adding that they had "remained incommunicado, and out of the reach of foreign investigators." Abu Dhabi presented itself as the bank's largest victim, having lost "some $6 billion in all," and maintained that it had never known that most of BCCI's shareholders were nominees, "including the heads of state of several of the smaller sheikhdoms of the United Arab Emirates of which Sheikh Zayed is president," or that [[Kamal Adham]] and [[A. R. (Abdul Raouf) Khalil|A. R. Khalil]], "two successive heads of Saudi intelligence," were also nominees. Its witness before the Senate subcommittee, [[Ahmed Al Sayegh]], testified: "We didn't know anything about the bank [BCCI] because of our passive role in the past."[^3]
+
+The report also recorded that the Washington law firm [[Patton, Boggs & Blow]] had "served as headquarters for a billion-dollar enterprise called Real Estate Operations, Inc., owned by Sheikh Zayed's Abu Dhabi government," as described in *[[The Wall Street Journal]]* of May 20, 1992. A pro forma invoice of November 1985 for 1,250 TOW missiles bound for [[Iran]], backed by BCCI letters of credit, was "channeled through the Arabian Gate General Trading Co. of Dubai, United Arab Emirates."[^3][^5]
+
+### Footnotes
+
+[^1]: United Arab Emirates, Ministry of Foreign Affairs, "History," archived copy. https://web.archive.org/web/2024/https://www.mofa.gov.ae/en/the-uae/history
+[^2]: United Arab Emirates Government, "History," The Official Portal of the UAE Government, accessed September 23, 2026. https://u.ae/en/about-the-uae/history
+[^3]: Kerry, Senator John, and Senator Hank Brown. *The BCCI Affair: A Report to the Committee on Foreign Relations, United States Senate.* December 1992, ch. 14, "Abu Dhabi: BCCI's Founding and Majority Shareholders." https://irp.fas.org/congress/1992_rpt/bcci/14abudhabi.htm
+[^4]: Kerry and Brown, *The BCCI Affair,* ch. 3, "The Origin and Early Years of BCCI." https://irp.fas.org/congress/1992_rpt/bcci/03hist.htm
+[^5]: Kerry and Brown, *The BCCI Affair,* ch. 11, "BCCI, The CIA and Foreign Intelligence." https://irp.fas.org/congress/1992_rpt/bcci/11intel.htm