http://www.washingtonmonthly.com/features/2004/0409.sirota.html September 2004
Follow the Money
How John Kerry busted the terrorists' favorite bank.
By David Sirota and Jonathan Baskin
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Two decades ago, the Bank of Credit and Commerce International (BCCI) was a highly respected financial titan. In 1987, when its subsidiary helped finance a deal involving Texas oilman George W. Bush, the bank appeared to be a reputable institution, with attractive branch offices, a traveler's check business, and a solid reputation for financing international trade. It had high-powered allies in Washington and boasted relationships with respected figures around the world.
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By the end, Kerry had helped dismantle a massive criminal enterprise and exposed the infrastructure of BCCI and its affiliated institutions, a web that law enforcement officials today acknowledge would become a model for international terrorist financing. As Kerry's investigation revealed in the late 1980s and early 1990s, BCCI was interested in more than just enriching its clients--it had a fundamentally anti-Western mission. Among the stated goals of its Pakistani founder were to "fight the evil influence of the West," and finance Muslim terrorist organizations. In retrospect, Kerry's investigation had uncovered an institution at the fulcrum of America's first great post-Cold War security challenge.
More than a decade later, Kerry is his party's nominee for president, and terrorist financing is anything but a back-burner issue. The Bush campaign has settled on a new strategy for attacking Kerry: Portray him as a do-nothing senator who's weak on fighting terrorism. "After 19 years in the Senate, he's had thousands of votes, but few signature achievements," President Bush charged recently at a campaign rally in Pittsburgh; spin that's been echoed by Bush's surrogates, conservative pundits, and mainstream reporters alike, and by a steady barrage of campaign ads suggesting that the one thing Kerry did do in Congress was prove he knew nothing about terrorism. Ridiculing the senator for not mentioning al Qaeda in his 1997 book on terrorism, one ad asks: "How can John Kerry win a war
if he doesn't know the enemy?"
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But legislation is only one facet of a senator's record. As the BCCI investigation shows, Kerry developed a very different record of accomplishment--one often as vital, if not more so, than passage of bills. Kerry's probe didn't create any popular new governmental programs, reform the tax code, or eliminate bureaucratic waste and fraud. Instead, he shrewdly used the Senate's oversight powers to address the threat of terrorism well before it was in vogue, and dismantled a key terrorist weapon. In the process, observers saw a senator with tremendous fortitude, and a willingness to put the public good ahead of his own career. Those qualities might be hard to communicate to voters via one-line sound bites, but they would surely aid Kerry as president in his attempts to battle the threat of terrorism.
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But Kerry refused to back off, and his hearings began to expose the ways in which international terrorism was financed. As Kerry's subcommittee discovered, BCCI catered to many of the most notorious tyrants and thugs of the late 20th century, including Iraqi dictator Saddam Hussein, the heads of the Medellin cocaine cartel, and Abu Nidal, the notorious Palestinian terrorist. According to the CIA, it also did business with those who went on to lead al Qaeda.
And BCCI went beyond merely offering financial assistance to dictators and terrorists: According to Time, the operation itself was an elaborate fraud, replete with a "global intelligence operation and a Mafia-like enforcement squad."
By July 1991, Kerry's work paid off. That month, British and U.S. regulators finally responded to the evidence provided by Kerry, Morgenthau, and a concurrent investigation by the Federal Reserve. BCCI was shut down in seven countries, restricted in dozens more, and served indictments for grand larceny, bribery, and money laundering. The actions effectively put it out of business what Morgenthau called, "one of the biggest criminal enterprises in world history."
Bin Laden's bankers
Kerry's record in the BCCI affair, of course, contrasts sharply with Bush's. The current president's career as an oilman was always marked by the kind of insider cronyism that Kerry resisted. Even more startling, as a director of Texas-based Harken Energy, Bush himself did business with BCCI-connected institutions almost at the same time Kerry was fighting the bank. As The Wall Street Journal reported in 1991, there was a "mosaic of BCCI connections surrounding since George W. Bush came on board." In 1987, Bush secured a critical $25 million-loan from a bank the Kerry Commission would later reveal to be a BCCI joint venture. Certainly, Bush did not suspect BCCI had such questionable connections at the time. But still, the president's history suggests his attacks on Kerry's national-security credentials come from a position of little authority.
As the presidential campaign enters its final stretch, Kerry's BCCI experience is important for two reasons. First, it reveals Kerry's foresight in fighting terrorism that is critical for any president in this age of asymmetrical threats. As The Washington Post noted, "years before money laundering became a centerpiece of antiterrorist efforts...Kerry crusaded for controls on global money laundering in the name of national security."
Make no mistake about it, BCCI would have been a player. A decade after Kerry helped shut the bank down, the CIA discovered Osama bin Laden was among those with accounts at the bank. A French intelligence report obtained by The Washington Post in 2002 identified dozens of companies and individuals who were involved with BCCI and were found to be dealing with bin Laden after the bank collapsed, and that the financial network operated by bin Laden today "is similar to the network put in place in the 1980s by BCCI." As one senior U.S. investigator said in 2002, "BCCI was the mother and father of terrorist financing operations."
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