Work in Progress
Agha Hasan Abedi's ambitions for BCCI extended well beyond the markets in which the Bank had already established a substantial international presence. Accounts by former BCCI executives, contemporary books and BCCI's own publications and in-house magazines indicate that Abedi spoke of building one of the world's largest banking institutions, and regarded a major presence in the United States as a natural and necessary part of that vision - the ambition of a banker seeking scale in the market that mattered most, not a departure from it. One former senior BCCI executive later recalled that Abedi's ambition was ultimately to build the biggest bank in the world.
The United States was particularly important to that ambition. Published accounts describe Abedi as wanting BCCI to establish a significant position in the world's largest financial market. Direct expansion by any foreign banking group, however, faced significant regulatory and political obstacles: US law restricted foreign control of American bank holding companies, and a bank based outside the United States could not simply buy its way into Washington's banking establishment. BCCI's interests in American banking institutions therefore became an important, and eventually contested, part of its longer-term US strategy.
This section will examine whether Abedi's wider ambition ultimately included relocating BCCI's principal centre to the United States and developing a banking group with assets approaching US$50 billion, as recalled in BCCI publications and accounts by former executives. These references will be examined alongside contemporary BCCI magazines, internal material, published books and subsequent official investigations.
It will also examine the methods through which BCCI sought to establish a stronger position within American banking, including its relationships with influential political figures - among them Clark Clifford, the Washington lawyer and former Secretary of Defence who chaired the board of First American Bankshares while also acting for years as legal adviser to Abedi and BCCI, with his partner Robert Altman serving as First American's president - its associations with individuals connected with the CIA and other US institutions, and its indirect interests in American banks, particularly First American itself. The route BCCI took to secure that interest, using nominee shareholders to hold stock on its behalf, was later found by US regulators and a Senate investigation to amount to secret, unlawful control of a US bank holding company; the same Senate inquiry found that the CIA had used BCCI and First American for certain operational purposes of its own.
It is important to distinguish what that finding was, and was not, about. The illegality established against BCCI concerned its secret and unlawful acquisition and control of First American under the Bank Holding Company Act - a regulatory and disclosure violation - rather than any finding that First American itself operated as a vehicle for money laundering. Subsequent litigation in the US records note that while some funds alleged to have been laundered elsewhere in the BCCI network passed through banks First American owned, First American itself was never named as a defendant in those money-laundering cases, and its own officers testified they had observed no suspicious activity at the bank.
It does, however, justify closer examination of whether Abedi's pursuit of his "US dream" changed the way BCCI was perceived - from an international bank headquartered outside the United States into an institution seeking entry into sensitive areas of the American banking, political and financial establishment. BCCI's growing difficulty in concealing that association coincided with mounting American pressure on te Bank of England through 1990-1991 and change course from restructuring to BCCI closure, as the Federal Reserve pressed the Bank of England over BCCI's concealed control of First American and Senator John Kerry's Senate Foreign Relations Subcommittee pursued its own parallel investigation into BCCI's US dealings. Against that backdrop, the Bank of England received only a draft of Price Waterhouse's confidential Section 41 report - delivered out of hours on the holiday evening of Saturday 22 June 1991 - and moved within days to close BCCI internationally on 5 July 1991, acting on that draft rather than a finalised report. The speed of that decision, and its reliance on an unfinished document, later drew scrutiny from Lord Justice Bingham's inquiry into BCCI's supervision, yet Bigham concluded without recording his reasons that the closure of BCCI by the Bank of England was appropriate .
The section will therefore consider Abedi's ambitions for BCCI in the United States; First American and other US banking interests; relationships with American political figures including Clifford and Altman; the CIA connection; regulatory resistance; congressional investigations; restrictions affecting foreign banking expansion; and whether BCCI's American ambitions contributed materially to the increasingly hostile political and regulatory environment it encountered in the United States, resulting in the closure of BCCI's operations there. The purpose is not to assume that Abedi's US ambitions alone caused BCCI's subsequent difficulties, but to examine how directly the pursuit of those ambitions placed BCCI in contact with powerful political, regulatory and financial interests on both sides of the Atlantic.
A closer examination of the Bank of England's decision, on 4 March 1991, to commission the Section 41 investigation from Price Waterhouse is considered under Perspective on this site. That decision fell at almost exactly the point at which the Abu Dhabi restructuring talks had reached their most advanced stage, with the majority shareholders having just confirmed a financial support package for BCCI, and whether mounting American scrutiny of BCCI's concealed control of First American played any part in that timing - alongside the fraud findings Price Waterhouse had already been developing since the preceding winter - is a question addressed there rather than assumed here.