Customer Reviews

False Profits: The Inside Story of BCCI, The World’s Most Corrupt Financial Empire

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Not since "The Underground Empire," or "Bernard Madoff Ponzi Scheme," has so much intrigue been packed between the covers of a single volume. This is the story of how a gifted Pakistani Banker decided to beat the Western Colonial Banking Empire at its own game -- and almost succeeded in pulling it off.

Although his initial idea was Machiavellian enough, it nevertheless began morally and financially sound: Agha Hasan Abedi (Muslim, mystic and poet), set out to build a global multinational banking system that would be committed to helping the developing world, and at the same time one that would break the stranglehold Western banks had over most Third World economies. Another not so incidental goal was to influence U.S. Middle East policy by trying to sever the tight link between the U.S. and Israel.

Although his idea was justifiable on moral and political grounds, there was nothing moral about Abedi's technique. It was to parlay a storehouse of petrodollars from a handful of greedy oil sheiks into a "one stop shopping" international bank of intrigue situated at the center of Western capital and influence: Washington, D.C. What he produced was a bank that ended up dealing in: the buying, selling and distribution of arms to hot spots around the world, international influence peddling, spying, international political fixing, drug trafficking, and even the support and training of terrorists.

Abedi's network proved to be a corrupt and perishable financial monster with a predictably short life span. It metastasized, and then collapsed under its own weight, but not before taking down with it a great deal of the Western banking system and the reputations of many high level international businessmen and politicians.

The first two legs of Abedi's plan: to take over one of the largest banking institution in Washington D.C. (The Wells Fargo Bank), and then corrupt a host of powerful and influential U.S. politicians proved to be especially easy and operated like clockwork. Using Clark Clifford, a perennial K-Street fixer, as the gateway to corrupt U.S. politicians, Abedi went to work. and in no time at all, the usual suspects (and a few unusual ones) had been roped into his net: For instance, several members of both the Carter and the Bush administrations were caught in the net, as were several high profile politicians such as Burt Lance and Orrin Hatch.

What resulted however was something quite different than Abedi had envisioned. BCCI never became your nice friendly neighborhood Third World international bank. Abedi's banking network, with the help of the likes of Saddam Hussein, Manuel Noriega and a whole cast of international villains, quickly metamorphed into a Bernard Medoff type hydra-headed Ponzi scheme, in which an array of unsavory techniques ended in bilking both the rich and poor of both developed and developing nations of billions of dollars.

The scandal hit the U.S. like a ton of bricks and everyone on Capital Hill went scurrying into their "prevent defense." When the dust finally settled, what little we know about the "ins and outs" of this scandal, was quietly squashed. Had we known more, it would have proved to have been the one sure precursor to today's financial fiasco. It could have been used to foretell the present subprime scandal. That did not happen. I read the Washington Post and New York Times during the time and could only get snippets and fragments of the story, not nearly enough to get a full picture.

Finally, from this book, we do get the full picture. It is not a pretty one but is maximally interesting and full of intrigue. It comes from these two doggedly intrepid reporters, who like Woodward and Bernstein before them, moved every slimy rock in Washington D.C., and out came the same "creepy crawlers" we see in today's financial scandal: our bought and paid for politicians. And as always, they were greatly facilitated and enabled by loose banking regulations, corrupt lobbyists, all designed specifically to allow such corruption to take hold. It is a shame that in this case, the public failed to ask enough questions and allowed the scandal to peter out and die a normal death, only to be reincarnated in its fullest glory again in 2007 via the subprime meltdown.

Although I had problems with the author's anticipatory Hollywood style. They seemed to know they were on to something big and wrote the book not as disinterested reporters, but with the hope of later selling it as a movie script. In my view, this subtracted rather than added to their credibility. I believe that if if they had just stuck to allowing the facts to speak for themselves, it would have had an even stronger impact and more star power. But this is a nit-pick. Four Stars.

This is a story of the Bank of Commerce and Credit International, apparently the largest bank fraud in history. "False Profits: the Inside Story of BCCI," concludes that many aspects of the scandal remain shrouded in mystery.

BCCI was a privately-held bank that was a criminal enterprise from its inception. It bought political influence, did a brisk business with dictators and drug lords and the CIA.

Why was it necessary for an intelligence organization to run a bank? For drug running, money laundering, and arms-deal schemes, of course.

BCCI controlled a maze of subsidiaries and affiliates incorporated in several different countries No regulators had jurisdiction on a simultaneous consolidated basis, so entries could fool regulators and auditors by shell-game tactics.

BCCI and its allies had personal and financial ties to both the Bush and Clinton administrations. There were plenty of indicators that the funny-money game was being played at the highest levels of our government, including presidents and their closest advisors. The Justice Department went out of its way to hamper the investigation, and the most serious offenses were punished with innocuous plea bargains.