BCCI was involved in some of the most sensitive intelligence operations of the Reagan-Bush years, including the secret sales of arms to Iran. When questions were raised about the CIA's ties to BCCI after the shutdown of the bank, however, spokesmen for the agency insisted that its hands were clean. "Any allegations of unlawful use of BCCI by the agency are without foundation," the CIA said in a statement.
Congressional investigators and others familiar with BCCI have their own theories about the CIA's conduct. There are strong suspicions that the agency wanted to protect an important intelligence asset. As Norman Bailey, a former National Security Council official, said, the CIA was not interested in "blowing the BCCI cover." There is another alarming possibility: some investigators believe a portion of money stolen from BCCI's depositors financed covert operations sponsored by the U.S. government. If BCCI's frauds were exposed, this source of funds would dry up. There are even indications that CIA officials were involved in the founding of BCCI.
One former officer of the bank recalls a conversation he had in the early 1980s with a close associate of Abedi's, a Pakistani who had worked for [his] United Bank and then joined BCCI when it was established. The Pakistani said that Abedi had worked with the CIA during his United Bank days and that the CIA had encouraged him in his project to launch BCCI, since the agency realized that an international bank could provide valuable cover for intelligence operations. The Pakistani mentioned one U.S. intelligence official by name: Richard Helms, the director of the CIA until early 1973. Helms later became a legal client of Clark Clifford's and a business partner of two BCCI insiders. "What I have been told," says this source, "is that it wasn't a Pakistani bank at all. The guys behind the bank weren't Pakistani at all. The whole thing was a front."
Helms has described reports of his involvement in the BCCI takeover of First American as absolute nonsense. Yet regardless of what Helms says, no one can deny that virtually every major character in the takeover was connected in one way or another to U.S. intelligence:
George Olmsted, head of the OSS's China section during the war, controlled Financial General Bankshares (later First American Bankshares) until 1977.
J. William Middendorf II, who headed the group that next acquired it. Middendorf was secretary of the Navy until a few months before the BCCI takeover, then a member of president-elect Ronald Reagan's CIA transition team.
BCCI founder Agha Hasan Abedi, who arranged for clients of BCCI to buy the company from Middendorf's group. On several occasions, former Pakistani President Zulfikar Ali Bhutto sad publicly that Abedi was in league with the CIA.
Mohammed Rahim Motaghi Irvani, an Iranian businessman and founding director in the Safeer consulting firm that Helms set up after leaving the CIA, and chairman of one of the dummy companies set up to carry out BCCI's acquisition.
Helms, who advised Irvani in connection with the takeover of First American.
Saudi intelligence chief Kamal Adham, the lead investor in Abedi's group.
Former Defense Secretary Clifford, Helms's attorney, who steered the deal through the regulatory maze and then became the chairman of the company.
After the BCCI group gained control of First American, two men with links to U.S. intelligence joined the board of its Washington, D.C., bark. The lobbyist Robert Gray of Hill and Knowlton often boasted of his close relationship with the CIA's William Casey, Gray used to say that before taking on a foreign client, he would clear it with Casey. Karl G. Harr, Jr., a lobbyist for the aerospace industry, had been on the staff of the National Security Council in the late 1950s. He had served on the Operations Coordinating Board, which was involved in overseeing CIA covert operations.
Can this all be a coincidence? Or is it possible that First American was affiliated with U.S. intelligence all along and was simply passed from one group of CIA associates to another, and then another?