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The Global Bust-Out Series (Chapter 3): The BCCI Enterprise and The Financial Jihad
This is Chapter 3 of a multi-chapter series. On your right is a Table of Contents to all chapters so far published.
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In Chapter 2 of this series, we began to discuss an outfit called the Bank of Credit and Commerce International (BCCI) which collapsed in 1991, at which point the Manhattan district attorney called it “the biggest banking fraud in world financial history.” It will be useful for us to further review the amazing history of BCCI because most of BCCI’s former princiapls and their former partners in crime remain in business today. Moreover, we will see, they have, along with some new and younger players, built a financial network that presently poses a significant threat to the stability of the global financial system.
Unfortunately, the public knows little about the BCCI scandal other than what was published by the major news organizations during the brief period after the scandal broke in 1991, and the major U.S. news organizations reported that BCCI’s most significant crime was to have secretly acquired a financial institution called First American Bankshares in contravention of rules prohibiting foreign ownership of American financial insititutions. The major U.S. news organizations also reported that a few BCCI executives were indicted for laundering money that belonged to Columbian drug cartels, but the media left the public to believe that this was not evidence of any larger conspiracy on the part of BCCI and its partners (what I will refer to as the “larger BCCI enterprise”).
The major U.S. news organizations did transcribe the Manhattan District Attorney’s statement that BCCI was the “largest banking fraud in world financial history,” but most U.S. media failed to properly quanitify the magnitude of the fraud or the damage that had been done to the global financial system. So far as the fraud was concerned, the major U.S. news organizations reported only that BCCI’s executives had failed to properly account for a few billion dollars, while BCCI’s depositors had lost a total of around $20 billion when the bank collapsed.
Not only that, but some reports suggested that unlike other major financial institutions, BCCI had pursued a mission that was largely “philanthropic” in nature. According to this narrative, the founder of BCCI, a Pakistani businessman named Aga Hasan Abedi, ascribed to the same “mystical” brand of Sufi Islam that was favored by some American hippies, and guided by these “mystical” religious beliefs, Abedi and other BCCI executives set out to eliminate global poverty and contribute to the economic advancement of the world’s disenfranchised nations, though a few billion dollars had apparently vanished into the ether of this ultimately misguided and “mystical” mission.
By contrast, Yossef Bondansky, who served as director of the Congressional (House) Task Force on Terrorism and Unconventional Warfare during the years 1988-2005, reported (in his 2000 seminal book on Osama bin Laden) that BCCI’s “philanthropic” mission included the following: “providing ‘special services’ in support of worthy causes—from laundering money for terrorists, Muslim intelligence services, and mujahedeen; to clandestinely funding deals for conventional weapons, weapons of mass destruction…to shipping around and laundering huge sums embezzled by corrupt leaders.” Bodansky continued: “In the process of sponosoring these Islamist ‘causes,’ the BCCI’s management not only did not keep any books…[but also] BCCI had become a hollow entity with a lot of unaccounted for and dirty money moving around the world…”
In fact, the mission was grander than all that, and to undertand the larger mission, we must recall that leaders of the Muslim Brotherhood presently speak of a mission called “The Financial Jihad.” To some extent, the “Financial Jihad” involves Muslim Brotherhood banks providing “special services” to jihadi terorist organizations, but a report prepared for the Department of Defense (see chapter 1 of this series) suggests (as do other experts) that the “Financial Jihad” has two additional objectives: 1) to build a global financial empire that can serve as an alternative to the prevaling financial order dominated by the West; and 2) to deploy financial weapons of mass destruction to undermine the prevailing financial order dominated by the West.
The financial institution that spearheaded the “Financial Jihad” was BCCI. It was not known as the “Financial Jihad” back then, but there can be no doubt that BCCI’s mission had little to do with a “mystical” mission to eliminate global povery. It was true that BCCI founder Aga Hassan Abedi ascribed to a “mystical” brand of Sufi Islam, but it was also true (contrary to the media reports that the Muslim Broherhood was an entirely Sunni outfit) that some key Muslim Brotherhood figures, including several of the people who orgininally founded the Brotherhood, ascribed to the “mystical” brand of Sufi Islam. Although it is not known whether Abedi himself was a member of the Muslim Brotherhood, he and other BCCI exectutives had relationships with Muslim Brotherhood leaders, and it is clear that he and the Muslim Brotherhood had a common vision of what they referred to at the time as “Islamic finance.”
BCCI also counted among its founding shareholders and and top executives current and former officials of governments that were among the Muslim Brotherhood’s principal state sponsors. One of the largest shareholders of BCCI was the ruler of Abu Dhabi (in the United Arab Emirates), and other key shareholders included the ruling families of Dubai (also in the UAE) and Oman. In addition, the Saudi royal family had close involvement with BCCI, and one of BCCI’s most important shareholders (and a key hands-on executive of the bank) was Shiekh Kamal Adahm, who was chief of the Saudi intelligence service at the time when BCCI was founded in 1972 until he retired from that position in 1977.
When Shiekh Adahm resigned as chief of Saudi intelligence, he was replaced by Prince Turki bin al-Faisal, who was also closely involved with some of BCCI’s important intiatives. Meanwhile, many of BCCI’s top executives were “former” top officials of Pakistan’s intelligence service, the ISI, which itself had extensive ties with the Muslim Brotherhood, while other BCCI executives were among the closest associates (including the son) of Muhammad Zia-ul-Haq, who was the leader of Pakistan until his death in 1988. Some accounts of the BCCI enterprise described BCCI as being effectively an arm of both the Saudi intelligence service and the Pakistani intelligence service (with Pakistan’s government being, to some significant extent, a proxy of the Saudis).
All of these governments had been engaged in a program (a program that continues to this day) to grow the Muslim Brotherhood into a powerful and global political movement. An important component of this program was (and is) to help the Muslim Brotherhood build an impressive financial empire, and as of the 1980s, a centerpice of this financial empire was an outfit called Faisal Islamic Bank, which was one of BCCI’s most important affiliates. BCCI itself might properly be regarded as having been an important component of the Muslim Brotherhood financial empire, and this was especially the case in the 1980s, when a Saudi billionaire named Sheikh Khalid bin Mahfouz became BCCI’s largest shareholer and an executive director of the bank.
As we know from Chapter 2 of this series, Shiekh Mahfouz had extensive ties to the Muslim Brotherhood, and he was later a key sponsor of the terrorist organization that we now know as “Al Qaeda.” He was, in fact, one of the select few billionaires whom Osama bin Laden referrred to as his “Golden Chain.” And, of course, Osama bin Laden was himself a prominent Saudi billionaire, so it should surprise nobody to learn that Osama bin Laden himself was also involved with the BCCI enterprise.
It has been reported that Osama bin Laden was a mere client of BCCI, and perhaps he was nothing more, but it is important to understand that Osama bin Laden was not just the leader of a violent terrorist organization, but also a sophisticated financial operator. In addition, as Youssef Bondansky (then director of the House Task Force on Terrorism) reported in his 2000 book on Osama bin Laden, soon after BCCI collapsed in 1991, a Muslim Brotherhood leader named Hasan al-Turabi assigned Osama bin Laden to help lead a Muslim Brotherhood intiative to replace the BCCI enterprise with a similar banking network that could serve the jihad. Also involved with this effort was Omar Abdul Rahman, otherwise known as the Blind Shiekh, and he was one of Osama bin Laden’s closest associates.
Presently, the media reports that the Blind Shiekh is a fringe fanatic and terrorist who was jailed for his involvement in the 1993 bombing of the World Trade Center. However, the Blind Shiekh is also a leader of the Muslim Brotherhood and he was (prior to his arrest on terrorism charges) an eminently prominent banker who co-founded several major financial institutions, including an oufit called Faisal Islamic Bank, which (recall) was BCCI’s most important affiliate (delivering much of its depositors’ money to BCCI, with BCCI looting some significant portion of that money).
The Blind Shiekh and Osama bin Laden were not the only terororists who had involvement with BCCI. Another was Abu Nidal, leader of a terrorist organization called Black September (among other names). Abu Nidal was the most notorious terrorist of his era, and according to numerous reports, including one in Time magazine, Abu Nidal worked for a while out of BCCI offices in London.
Abu Nidal, too, was reportedly a mere client of BCCI, but his terrorist organization was closely intertwined with a transnational organized crime (and terrorism) syndicate operated by a global terrorist and mobster named Monzer al Kassar, and al-Kassar played a role in brokering some of BCCI’s important business ventures. (Aside from being a global terrorist and mafia kingpin, Monzer al Kassar was a prominent businessman and oligarch often referred to as “The Prince of Marabella” because of the lavish parties he held at his mansion in Marabella, Spain).
Rachel Ehrenfeld, now director of the Economic Warfare Institute, has written that the “religious convictions of the founders of BCCI coincided with those of the Muslim and Arab leaders who sponsored terrorism. It was also the extension of this belief that led [BCCI founder] Agha Hassan Abedi to immerse BCCI in terrorist activities.” Ehrenfeld continued: “Funding revolutions, terrorism, and other subversive activities is expensive and difficult. An Iranian web of international financial institutions was created, with BCCI as one of the most prominent strands. The bank not only facilitated direct contact between terrorist networks, it also provided cover and deniability for the sponsoring states.”
All true, but more than that, the BCCI enterprise (contrary to the notion that its “mystical” mission was to eliminate global poverty) contributed mightly to the futher impoverishment of the world. Not only did the BCCI enterprise steal billions from its depositors (many of whom were citizens of poverty-stricken nations), but BCCI also helped numerous kleptocratic government leaders “bust out” (i.e. loot and destory) the economies of destitute nations in Africa and Latin America. In addition, the BCCI enterprise “busted out” a significant chunk of the American economy, which is to say that it achieved one objective of what is now known as the “Financial Jihad.”
However, it should be noted that the BCCI enerprise perpetrated much of its destructive crime in parternship with prominent figures of the American establishment. And presently, Muslim Brotherhood financial institutions (many with links to former BCCI principals, or operated by former BCCI principals) count amoung their important business partners some of Wall Street’s most notable (and notorious) brokerages and investment houses. In other words, Swiss author and political scientist Richard Labeviere (who is one of the world’s more astute observers of the jihad and the Muslim Brotherhood) was correct to report (in 2000) that the jihad and political Islam (led by the Muslim Brotherhood) “is less likely to produce a ‘clash of civilizations’…than to consolidate mafia channels of organized crime and the far-reaching networks of businesses built under globalized capitalism.”
Another astute (and independent) observer of the jihad is Robert Dreyfuss, who has spent much of his long career in the Middle East, and who has served as national security correspondent for Rolling Stone magazine, which is mostly about hip music bands, but which is, unfortunately for civilization, the only major U.S. media outfit that consistently publishes in-depth stories (see also stories by Matt Taibbi and Greg Palast) that approximate the truth on important subjects such as Wall Street, Washington, the jihad, and other things that make the world the way it is. Dreyfuss, who has studied the Muslim Brotherhood since the 1970s, and is the author of two excellent books (one on Iran, the other on political Islam) has correctly observed that the “real Muslim Brothers are the secretive bankers and financiers…whose geaneology places them in the oligarchical elite…”
Dreyfuss has also reported (correctly) that: “the Muslim Bortherhood is money. Together, the Bortherhood probably controls several tens of billions of dollars in immediately liquid assets, and controls billions more in day-to-day businesss operations in everything from oil trade and banking to drug-running, illegal arms merchandising, and gold and diamond smuggling. By allying with the Muslim Brotherhood, the Anglo-Americans [i.e. the oligarchical elite of the West] are not merely buying into a terrorist-for-hire racket; they are partners in a powerul and worldwide financial empire that extends from numbered Swiss bank accounts to offshore financial havens….”
Dreyfuss continued: “Need a few hundred million dollars to bail out [a] bank? Try the Muslim Brotherhood. Is a major London conglomerate seeking partners to invest a few billion in an African raw materials extraction venture? Try the Muslm Borthehrood. Does an Anglo-American bloc of banking houses want to start a run on the French franc? Try the Muslim Brotherhood.”
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While the major U.S. news organizations regularly cited $20 billion as being the extent of the BCCI fraud, that figure represented only the sum that BCCI’s depositors lost when BCCI collapsed. By perpetrating a host of other destructive financial crimes (i.e. financial terrorism), BCCI and its partners looted far more—at least two trillion dollars—from the global financial system. Some of this looting was accomplished by a global network of BCCI-affiliated brokerages that specialized in perpetrating so-called “pump and dump” schemes, and we will see in later chapters that most of those brokerages were not only linked to BCCI, but also operated by prominent financial operators (e.g. a fellow named Thomas Quinn) with ties to La Cosa Nostra and other organized crime syndicates.
See Chapter 1 of this series for a fuller description of “pump and dump” schemes, but the basic idea is that miscreants gain control over the stock of a publicly listed company, and sometimes gain a degree of control of the company itself. The miscreants then “pump” the share price, and as the share price rises in value, the misreants lure in ordinary investors. Once the share price reaches sufficient heights, the miscreants then “dump” shares into the market, meanwhile bombarding the stock with manipulative short selling that causes the stock to go into a death spriral from which the stock does not recover.
Sometimes the companies targeted in these schemes are fraudulent companies to begin with, at other times the companies are legitimate until such time when the miscreants seize control of the companies and begin manipulating their stock, meanwhile looting their cash. Either way, the end result is aways the same: the companies are “busted out” (i.e. destroyed) and the death spiral caused by the “dump” and the manipulative short selling ensures that the stock price hits zero before ordinary sharheholders have the opportunity to exit the stock and recoup some of their losses.
The global network of BCCI-linked brokerages “busted out” mostly small to medium sized companies, but the larger BCCI enterprise used similar methods to “bust out” some important American savings and loan banks. In later chapters of this series, we will see that BCCI also played a key role in the operations of Michael Milken, then the most powerful man on Wall Street. In addition, we will see, BCCI helped Milken and some of closest associates “busted out” Lincoln Savings and Loan, then one of the most important financial insitutions in the nation. Indeed, BCCI and the Milken operation were major contributors to the savings and loan crisis that began in the late 1980s, and which ultimately cost U.S. taxpayers billions of dollars in bailouts—a portent of bigger and better things to come.
In 1993, when a few BCCI principals were brought to trial, the presiding judge correctly noted that the BCCI had single-handedly “shattered the integrity of the global financial system.” And perhaps it is no coicidence that the Blind Shiekh (co-founder of a key BCCI’s affiliate, Faisal Islamic Bank, which had played an important role in shattering the integrity of the global financial system) not only was linked that same year to the bombing of the World Trade Center (i.e. the first attempt to topple the twin totems of the global financial system), but also subsquently issued one of the most famous of all fatwahs–a fatwah that was cited by Osama bin Laden in his declaration of war againt the United States, and a fatwah that is quoted with admiration by Muslim Brotherhood leaders everywhere.
The Blind Shiekh’s fatwah (issued from his jail cell) was the first fatwah (or, at least, the first fatwah issued by a terrorist who was also a prominent banker) to publicly suggest that it would be good idea for his fellow jihadis (and fellow bankers?) to “tear down the edifices of capitalism.” And, to be sure, the Blind Shiekh was no friend of “capitalism” as that noble idea was formerly understood, with free and fair markets unfettered by a ruling oligarchy and governed by a minimal rule of law. To the contrary, the Blind Shiekh was a criminal oligarch. And though the World Trade Center was no doubt one “edifice of capitalism” that the the Blind Sheikh wished to “tear down,” the Blind Shiekh made it clear in his fatwah that the objective was not merely to destroy a building in the heart of the New York financial district.
The Blind Sheikh stated that there was a larger objective. This is the objective we now know as “The Finacial Jihad,” but back then, the Blind Shiekh did not mince his words. He stated it emphatically. He stated it bluntly. He stated it as a formal command: “Destroy their [our] economies…”
To be continued…
Mark Mitchell is a journalist who spent most of his career working for mainstream media publications before joining DeepCapture.com.
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This story was first published on Deep Capture. Deep Capture features original investigative reporting on the all-too-cozy relationship Wall Street has with regulators, media, government and the intellectual establishment.
Source: http://www.deepcapture.com/the-global-bust-out-series-chapter-3-the-bcci-enterprise-and-the-financial-jihad/
