Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, March 30, 1991 TAG: 9103300290
SECTION: BUSINESS PAGE: A-12 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
The inquiry, launched by the committee chairman, Rep. Henry Gonzalez, D-Texas, is the first examination into possible ties between two controversies involving foreign bank dealings in the United States.
In one, two former executives of the Atlanta branch of Banca Nazionale del Lavoro [BNL] were indicted last month on charges they illegally arranged more than $4 billion in unauthorized loans to Iraq.
In the second, the Luxembourg-based Bank of Commerce and Credit International [BCCI], acknowledged early this month that it had acquired at least a 25 percent share in First American Bankshares Inc. without permission from U.S. regulators at the Federal Reserve.
BCCI, owned by Sheikh Zayed bin Sultan al-Nahiyan, the ruler of the Persian Gulf state of Abu Dhabi, pleaded guilty in 1988 in federal court in Tampa, Fla., to laundering millions of dollars of drug money for deposed Panamanian dictator Manuel Noriega.
The BCCI-First American relationship has attracted intense public scrutiny because of the role of Clark Clifford, former presidential adviser and defense secretary. He is also chairman of First American.
In 1982, when Persian Gulf investors acquired First American, Clifford assured U.S. banking authorities it would operate separately from BCCI even though the investors were customers of BCCI.
In his soon-to-be-published memoirs, Clifford says he was "both appalled and embarrassed" to discover he may have misled regulators, but said, "If the Federal Reserve Board and other authorities had been deceived, so had I."
First American is the Washington area's largest financial institution and the nation's 51st largest bank holding company with nearly 300 branches stretching from Florida to New York.
Gonzalez, in a March 14 letter to Federal Reserve Chairman Alan Greenspan, said, "Evidence has been uncovered revealing millions of dollars of money transfers between BNL and BCCI."
He said a Federal Reserve Bank of New York analysis of BNL-Atlanta's account at Morgan Guaranty Trust Co. reveals large transfers between BNL and BCCI from July 27 to July 29, 1989, the week before FBI agents raided BNL's Atlanta office.
According to a committee source, who spoke on condition of anonymity, records show that on July 27 BCCI transferred $22 million to BNL's account at Morgan Guaranty. The next day, BNL sent $22.005 million back to BCCI and on July 29 sent $200,000. The source said records also show a transfer of $15 million from First American to BNL on July 25.
A separate document shows that BCCI's London office transferred $30 million on June 5, 1989, to BNL's Morgan Guaranty account.
Committee investigators are trying to determine whether the transactions had anything to do with BNL's lending to Iraq or with money laundering, the source said.
by CNB