Tuesday, February 21, 2006

BCCI, Bush, and the tangled history of everything

  I am going to confuse myself and try to hack my way through a thicket of history that might reveal layers of context for the purchase of the American ports by Dubai Ports World.

 We will start this out with perhaps the only hat tip I will ever give to Michelle Malkin. She reports about the role of "sukuk" in Muslim finance. Under Sharia law, usery is prohibited, that means no interest in their banking system and they needed to have a vehicle that would act like a bond, to allow a return on passive investment.

  Their finacial systems have been somewhat stunted by this limitation, but if you have a big enough cash cow, you can use it to back enough bonds to make a stock exchange and banking system viable. That is exactly what Dubai wants with the Dubai International Finance Exchange.

  If the Emirate secures this deal, the huge new financial hub will start generating a lot of money for all the players involved and create a channel through which Arab assets can start flowing in some very European capitalist ways.

 The president of the UAE is Sheikh Khalifa bin Zayed bin Sultan Al Nahayan. As his name implies, Sheikh Khalifa bin Zayed was the son of Sheikh Zayed, who he replaced as Emir of Abu Dhabi and the President of the UAE in 2001.

 The elder Zayed was also interested in banking and in 1972 provided the investment capital to start the Bank of Credit and Commerce International (BCCI) along with a 25% stake from Bank of America and according to some accounts, the CIA. It seems that the CIA may have wanted the Pakastani bank as a funding route for the Mujahideen in Afghanistan. The founder of BCCI who approached Zayed with the deal was a Pakastani Oil Banker named Agha Hasan Abedi, who had made a great deal of money and many ties to the West by founding the Pakastani bank United Bank Ltd. which was nationalized the year before he chartered BCCI in Luxembourg. A fact I mention for the twin reasons of underscoring why the CIA might have wanted a presence in the new non-governmental financial institution and because this story didn't have enough Luxembourg in it.

  BCCI was brought down in a financial and criminal scandal that was sparked in 1990 when an audit of their American branch showed hundreds of millions of dollars missing. By 1991, by which time drug trafficking, money laundering, gun running, prostitution and terrorism were all discovered to be nestled in their portfolio, Sheikh Zayed had amasssed a 78% stake in the organized crime syndicate.

  Burned in the spiraling investigation were several people who had ties to the Carter campaign, most notably Bert Lance his director of OMB who was also involved in a banking scandal of his own involving mismanagement of the Calhoun National Bank. Lance had introduced Carter to BCCI figures, and the bank paid a $3.4 million loan for Lance in 1978.

  BCCI maintained accounts for Abu Nidal and his organization Fatah RC. Nidal used the bank to set up a shell corporation that transported grenades, armored cars, night vision goggles, and other arms to be used in terrorist activities world wide. British Intelligence had the cooperation of an agent named Qassem in exposing the nature of the arms shipments, and Qassem signed an affidavit linking an American financier named Marc Rich to the transactions. Rich was later involved in other legal issues, including tax evasion, and illegal oil dealings with Iran during the hostage crisis, but by fleeing the country, and with the aid of his lawyer, I. Lewis "Scooter" Libby, he was eventually granted a pardon by his close friend Bill Clinton.

  A Democrat who came out of this story looking fairly good was John Kerry. The Bank foundered after Kerry co-authored a report for the CFR called "The BCCI Affair" that linked the bank to the drug trafficking of Panamanian Manuel Noriega. Following that side trip would bury us much deeper in the CIA and Iran Contra and a slew of other Presidents, but let it suffice to say that the Bush family is not unfamiliar with the Emir of Dubai and BCCI. I suppose there is a chance that the blogging Senator will see my post on this at dailykos and correct the errors I probably have made and perhaps he can tie some of this information in tighter, because it was his work that brought down the whole house of cards. Work that also bought him a few enemies in both the major parties.

  So now we are up to more recent history.

  One of the directors of BCCI was James Bath. In the early seventies he started a real estate firm with Lan Bentsen, the son of Democratic VP nominee Lloyd Bentsen. But his real claim to infamy was with the son of another politician. After serving in the Texas Air National Guard with the son of George H.W. Bush, Bath and George W. were partners in Arbusto oil.

 As made famous in the movie Farenheit 9/11, Bath channelled money from the Bin Laden family into GWB's new oil company, and also set up a bank in Houston. Bath then set up an aviation company that supplied jets to the Dubai National Oil Company, which was owned by his old collegue at BCCI, Sheikh Zayed.

 Zayed's son now sits on the throne, and he and his father's advisors have started a new financial institution, and they are buying the American ports to make it work. Bush is standing up for the deal and threatening to veto any attempt to stop him. Somehow I can't help but feel that history, while perhaps not repeating itself, might be continuing on its tangled way.



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