BCCI Impropriety Felt Worldwide from South America to Africa to Asia, Central Banks and Private Depositors Are Affected. INTERNATIONAL BANK SCANDAL

By Amy Kaslow, writer of The Christian Science Monitor | The Christian Science Monitor, August 9, 1991 | Go to article overview

BCCI Impropriety Felt Worldwide from South America to Africa to Asia, Central Banks and Private Depositors Are Affected. INTERNATIONAL BANK SCANDAL


Amy Kaslow, writer of The Christian Science Monitor, The Christian Science Monitor


IN Arab businessman recalls a typical set-up at one of the many overseas branches of Bank of Credit and Commerce International (BCCI): a wide open room, filled with desks in no particular order. Absent an identifiable hierarchy, he quips, it's difficult to pin down individual responsibility.

This scenario is an appropriate metaphor for the broadest-based banking scandal in history. BCCI's $20 billion operation, covering some 70 countries, is now under investigation and indictment for massive fraud.

Branches around the world have been shut down due to allegations ranging from laundering arms- and narcotics-sales profits to financing clandestine nuclear-weapons programs. Investigators are slowly uncovering the implicated governments, corporations, and individuals; their estimates put BCCI's criminal customer base at 3,000 worldwide.

Observers assert that the lax international financial system, with poor control over global banking transactions, provided a vacuum for illicit dealings.

"Things don't work when no one has a clear sense of responsibility," says Lawrence Summers, chief economist of the World Bank. "And when you're (based in London,) headquartered in Luxembourg, and you're operating all over the world, there's no one whose fault it clearly is, if things go wrong." Deposits and loans

Since its inception, allege international investigators, the bank doled out more money than it took on deposit and bankrolled commercially unviable and criminal enterprises.

BCCI branch managers often solicited deposits through bribery, and then used those funds to cover bad loans, skimming huge profits and falsifying records to show a positive balance sheet, investigators allege.

The worldwide impact of this recklessness looms large. Casualties may include central banks from Jamaica to Cameroon that put their nation's savings on deposit with BCCI. The nest eggs of tens of thousands of small, African, Asian, Middle Eastern, and Latin depositors are in jeopardy.

BCCI was ready with money for government leaders whose own economic policies rendered their countries unacceptable for certain International Monetary Fund (IMF) or World Bank assistance, says Jack Blum, a former US Senate investigator into BCCI.

The bank is the largest private bank in Nigeria. "BCCI lent the Nigerian government $1 billion to get around requirements put on it by the IMF."

The bank has served African governments, corporations, and small businesses from Egypt to Zimbabwe. The closure of many African BCCI branches has hit hard a large portion of African society dependent on BCCI financing.

In Latin America, according to Mr. Blum, BCCI encouraged capital flight by offering to do the illegal transport and conversion of the local currency, "destroying the opportunity of that country to develop ... and leaving the continent with the begging bowl and the World Bank and other public institutions which have to make up the difference."

In Southwest Asia, Blum says, BCCI may have helped transport the goods and finances of Afghan guerrillas involved in heroin trafficking. …

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

BCCI Impropriety Felt Worldwide from South America to Africa to Asia, Central Banks and Private Depositors Are Affected. INTERNATIONAL BANK SCANDAL
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

"Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.