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20 - ORGANIZATIONS/PRIVATE/Bank of Credit and Commerce International.md
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@ -5,7 +5,7 @@ aliases:
- BCCI
- Sandstorm
created: 2024-04-25
updated: 2026-10-08
updated: 2026-10-15
tags:
- Organization
- Private
@ -93,17 +93,19 @@ BCCI's Washington defense was coordinated in part by former federal prosecutors.
A 1992 press account gave a different date, stating that BCCI hired Barcella in 1990.[^16] Barcella and Wechsler represented the bank in the meetings at which Tampa prosecutors agreed to a plea in January 1990.[^17] [[Robert Parry]] wrote that Barcella and his firm earned more than $2 million from BCCI, and that the Laxalt and BCCI links were omitted from the public report on the October Surprise investigation.[^18]
On December 9, 1992, BCCI's court-appointed liquidators sued Khalid bin Mahfouz, Haroon Kahlon and the [[National Commercial Bank]] in the United States District Court for the District of Columbia under the Racketeer Influenced and Corrupt Organizations Act, seeking more than 10.5 billion dollars trebled. The court enjoined bin Mahfouz and Kahlon from moving assets in the United States on December 10, 1992, issued a preliminary injunction against bin Mahfouz on February 12, 1993, and on July 26, 1993 conditionally dismissed the action on forum non conveniens grounds in favor of a parallel English suit for the same amount.[^19]
### Congressional Inquiries and CIA Accounts
A CIA memorandum, undated and approved for release in August 2003, refers to a [[House October Surprise Task Force|House task force]] "formed to investigate allegations that officials from the Reagan campaign sought to delay release of the hostages in Iran until after the 1980 election," a body the House created on February 5, 1992.[^19][^20] The memorandum states that the [[House Banking Committee]] had subpoenaed First American for all of its records pertaining to CIA accounts in its investigation of BCCI, and that the agency did not then hold any accounts at First American.[^19] The agency had briefed two cleared committee staffers on the First American accounts and had provided the committee with intelligence reports on BCCI, and it had indicated a desire to cooperate "so long as it would not require access to operational information." The committee nonetheless sent a letter to the ADCI asserting its right to review all records and interview CIA officers "regardless of the sensitivity of the information."[^19]
A CIA memorandum, undated and approved for release in August 2003, refers to a [[House October Surprise Task Force|House task force]] "formed to investigate allegations that officials from the Reagan campaign sought to delay release of the hostages in Iran until after the 1980 election," a body the House created on February 5, 1992.[^20][^21] The memorandum states that the [[House Banking Committee]] had subpoenaed First American for all of its records pertaining to CIA accounts in its investigation of BCCI, and that the agency did not then hold any accounts at First American.[^20] The agency had briefed two cleared committee staffers on the First American accounts and had provided the committee with intelligence reports on BCCI, and it had indicated a desire to cooperate "so long as it would not require access to operational information." The committee nonetheless sent a letter to the ADCI asserting its right to review all records and interview CIA officers "regardless of the sensitivity of the information."[^20]
The agency had also tried to obtain the help of the [[House Permanent Select Committee on Intelligence]] to act as a surrogate for the Banking Committee in reviewing sensitive operational information, but the Banking Committee had refused to accept any role for it.[^19] The memorandum proposed points to be made to the committee, including that the agency was "prepared to resist demands for access by the Banking Committee to sensitive operational information, and will, as a last resort, seek to protect this type of information from disclosure by requesting that the President invoke Executive Privilege." The agency was also prepared to ask the Department of Justice "to seek a Temporary Restraining Order that would relieve First American Bank from having to comply with the Banking Committee subpoena."[^19]
The agency had also tried to obtain the help of the [[House Permanent Select Committee on Intelligence]] to act as a surrogate for the Banking Committee in reviewing sensitive operational information, but the Banking Committee had refused to accept any role for it.[^20] The memorandum proposed points to be made to the committee, including that the agency was "prepared to resist demands for access by the Banking Committee to sensitive operational information, and will, as a last resort, seek to protect this type of information from disclosure by requesting that the President invoke Executive Privilege." The agency was also prepared to ask the Department of Justice "to seek a Temporary Restraining Order that would relieve First American Bank from having to comply with the Banking Committee subpoena."[^20]
The memorandum records a request from the October Surprise Task Force for information on official and unofficial arms sales to Iran of U.S. origin or U.S. content from November 1977 through August 1985, including field reporting and operational strategies. It states that a "similar concern could also arise with the October Surprise Task Force investigation," and that the agency would "attempt to work out a compromise that would satisfy the Task Force's desire for information while protecting intelligence sources and methods."[^19]
The memorandum records a request from the October Surprise Task Force for information on official and unofficial arms sales to Iran of U.S. origin or U.S. content from November 1977 through August 1985, including field reporting and operational strategies. It states that a "similar concern could also arise with the October Surprise Task Force investigation," and that the agency would "attempt to work out a compromise that would satisfy the Task Force's desire for information while protecting intelligence sources and methods."[^20]
### Liquidation
The liquidators, [[Touche Ross]], reported a year into the liquidation that the true picture of BCCI's activities had been distorted by practices such as "loan parking" and "artificial fund transfers."[^8] The Abu Dhabi shareholders, who held 77.4 percent of BCCI at its closure, agreed a 1.8 billion dollar compensation package for creditors in November 1994, which received its last legal clearance, from a court in Luxembourg, in December 1995. An agreement with the liquidators in May 1996 allowed an initial payment of 1.55 billion dollars, a first dividend of 20 percent to more than 250,000 creditors, with 10 to 20 percent more to follow; by October 1997, 80 percent of small depositors in the [[United Arab Emirates]] had been repaid in full.[^21] In 2005 the liquidators abandoned their suit against the Bank of England, [[Three Rivers District Council v Bank of England]].[^22]
The liquidators, [[Touche Ross]], reported a year into the liquidation that the true picture of BCCI's activities had been distorted by practices such as "loan parking" and "artificial fund transfers."[^8] The Abu Dhabi shareholders, who held 77.4 percent of BCCI at its closure, agreed a 1.8 billion dollar compensation package for creditors in November 1994, which received its last legal clearance, from a court in Luxembourg, in December 1995. An agreement with the liquidators in May 1996 allowed an initial payment of 1.55 billion dollars, a first dividend of 20 percent to more than 250,000 creditors, with 10 to 20 percent more to follow; by October 1997, 80 percent of small depositors in the [[United Arab Emirates]] had been repaid in full.[^22] In 2005 the liquidators abandoned their suit against the Bank of England, [[Three Rivers District Council v Bank of England]].[^23]
### Footnotes
@ -125,7 +127,8 @@ The liquidators, [[Touche Ross]], reported a year into the liquidation that the
[^16]: "Head of Iran Hostage Probe Linked to Arms Deal," *Hartford Courant*, May 29, 1992. https://www.courant.com/1992/05/29/head-of-iran-hostage-probe-linked-to-arms-deal/
[^17]: Kerry and Brown, *The BCCI Affair,* ch. 8, "BCCI and Law Enforcement: The Justice Department and the U.S. Customs Service." https://irp.fas.org/congress/1992_rpt/bcci/08just.htm
[^18]: Parry, Robert. "October Surprise X-Files (Part 8): Lies Spun into History." *Consortium News*, 1996. https://www.consortiumnews.com/archive/xfile8.html
[^19]: Central Intelligence Agency, memorandum, undated, "BCCI and October Surprise Task Force," approved for release August 2003. CIA Reading Room document 0000984226. https://archive.org/details/cia-readingroom-document-0000984226
[^20]: U.S. House of Representatives, October Surprise Task Force, *Joint Report of the Task Force to Investigate Certain Allegations Concerning the Holding of American Hostages by Iran in 1980*, H. Rept. 102-1102, January 3, 1993, Legislative History (task force formed February 5, 1992 under H. Res. 258). https://archive.org/details/6199732-Joint-Report-of-the-October-Surprise-Task-Force
[^21]: "BCCI small depositors paid in UAE," United Press International, October 11, 1997. https://www.upi.com/Archives/1997/10/11/BCCI-small-depositors-paid-in-UAE/2814876542400/
[^22]: Three Rivers District Council and Others v. The Governor and Company of the Bank of England [2006] EWHC 816 (Comm). https://web.archive.org/web/20260203100053/https://www.bailii.org/ew/cases/EWHC/Comm/2006/816.html
[^19]: *BCCI Holdings (Luxembourg), Societe Anonyme v. Mahfouz*, 828 F. Supp. 92 (D.D.C. July 26, 1993) (Green, J.), Civ. A. No. 92-2763. https://static.case.law/f-supp/828/cases/0092-01.json
[^20]: Central Intelligence Agency, memorandum, undated, "BCCI and October Surprise Task Force," approved for release August 2003. CIA Reading Room document 0000984226. https://archive.org/details/cia-readingroom-document-0000984226
[^21]: U.S. House of Representatives, October Surprise Task Force, *Joint Report of the Task Force to Investigate Certain Allegations Concerning the Holding of American Hostages by Iran in 1980*, H. Rept. 102-1102, January 3, 1993, Legislative History (task force formed February 5, 1992 under H. Res. 258). https://archive.org/details/6199732-Joint-Report-of-the-October-Surprise-Task-Force
[^22]: "BCCI small depositors paid in UAE," United Press International, October 11, 1997. https://www.upi.com/Archives/1997/10/11/BCCI-small-depositors-paid-in-UAE/2814876542400/
[^23]: Three Rivers District Council and Others v. The Governor and Company of the Bank of England [2006] EWHC 816 (Comm). https://web.archive.org/web/20260203100053/https://www.bailii.org/ew/cases/EWHC/Comm/2006/816.html