The Americans are quite defensive about their banking system. It is hard to use a cheque book in the USA in the same way as in the UK. There have been very many small banks in USA, with very small cachement areas. Large scale interstate banking has been made difficult by regulations dating back from the days of The Great Depression in the late 1920s.
The BCCI closure in 1990 astonished a few investors, but it was perhaps no deep surprise to the savvy financial world. For some reason BCCI had been singled out for money laundering, a crime which attracts politicians seeking a career from a big bust. These politicians may go very high up the ladder. In the old USSR Schevernadze is reputed to have helped himself up by busting Georgian hashish merchants.
Getting evidence against BCCI was a job which took the DEA several years, and lots of double agents. In order to allow the informants to look convincing quite a lot of coacaine was delivered in order to generate the funds to prove that BCCI was guilty.
All of this is described in a book titled "A Full Service Bank: The Story of BCCI". The book was written by Americans, and it described an elaborate scam called operation C-Chase, aimed at destroying BCCI on the money laundering charges. To this day many Asians and Muslims believe that this bank was no more guilty than many others such as the Ljubljanska Bank, but it was singled out as part of an American Imperialist Plot, undoubtedly aided and abetted by Zionists.
C-Chase went on for several years, and a relationship developed where the traffickers must have smelt a rat, but continued to deliver cocaine because the operations were to some extent facilitated by the investigators.
BCCI was born in an area where family finances are often confused with state finances: South Asia. It could provide an excellent channel for moving money to the CIA clients fighting the Soviets in Afghanistan. BCCI also opened branches in Latin America. Its wide network made it very popular with all sorts of undercover agencies.
The financing of arms purchases by sale of commodities often has to be done indirectly, just like drug sales. If country A is facing armed insurrection, and country B is giving the rebels arms, then it looks as though the government of B is not treating the government of A with sufficient respect.
This means some arms shipments need to be sent to places such as Jordan, Panama, Singapore etc. Later on the weapons are smuggled to combatants, or wars waiting to happen.
Insurgents and rebels by their nature do not publish accounts. The Afghani mujehadeen are reputed to have got their arms from the Saudis. But the Saudis themselves were hardly masters of their own accounts. These things were put in the hands of merchant dynasties such as the Bin Ladens, or Pharoans.
BCCI would give its close friends a 'no-questions-asked' unlimited credit line. In turn some of these people would directly serve USA foreign policy objectives (arming Saddam Husayn), while others would stray out of bounds by trying to extend 'family banking' to the USA itself.
In typical drug-gangster style the American banks seek to protect their turf by informing on their competitors for doing the same as them. The USA, under prompting from its War on Drugs lobby, passed draconian disclosure laws to apply to all banks. In the age of the computer the most secretive banks are those where all critical calculations are done by abacus and counting beads. Loan records are promises between members of family or clan.
Howard Marks [2] describes the excellent facilities offered by Chinese banking, although its pretty sure that both Triad 14 and HongKong and Shanghai Banking Corporation (HSBC) are likely to be better than most USA banks. There are few records of any South East Asia heroin exporters having any problems laundering their money. Commission rates in Far East banks are amongst the lowest in the world. None of the 'Tiger Economies' suffered hyperinflation like so much of Latin America.
The proliferation of scandals shows that much of the banking business is corrupt. The negotiation of loans which everyone knows will never be paid is part of that system. These loans are typically for arms purchases by third world dictators, but ordinary loans to finance high living are also possible. Japanese and USA government circles at the highest level have attracted investigation. There are always crooked lawyers involved. Recruit and Whitewater are the names of the top level scams.
The recent exposure of CIA involvement in the Los Angeles crack trade is no surprise. But the incompetence of the CIA is now becoming too laughable. They even had their web-site hacked to read Central Stupidity Agency. Of course the hacking may have been an inside job, but suicide seems a good bet. Call in Dr Kavorkian.
More difficult to explain is the fantastic popularity of crack cocaine. Many of the less enlightened politicians are caught up in the War on Drugs propaganda, and condemn its use. Besides end users who smoke the stuff policemen and lawyers also get excited about it. Somehow it became part of a 'cocaine for the masses' blitz. Just right for the hedonistic culture promoted by Hollywood Dance films and Pop Video.
The Marxist historian, E.J.Hobsbawm, mentions the upsurge in the popularity of cocaine in his book Age of Extremes: A history of the Short Twentieth Century [3]. This is attributed to a change in consumer tastes. No analysis of the recycling of profits. Children were once tought the 'slave triangle' at school.
Britain -> Africa -> Carribean -> Britain
Guns Slaves Sugar
Another version uses alcohol in the form of Rum.
New England -> Africa -> Caribbean -> New England
Rum Slaves Sugar
In each case sugar plays the part of the villain [4]
Now much of the profitable plantation economy is conducted in
secret. Sugar was a refined product, like crack cocaine is today. The
enslavement may be meta-physical, as in 'addicted to drugs', but we
still have a possible triangle of Guns-Money-Drugs.
USA -> OPEC -> Colombia -> USA
Guns Petro-Dollars Cocaine
One may ask why it's necessary to switch the petro-dollars into
cocaine, but it makes sense really, since much of the money leaving the
Middle East is ripped off from state treasuries, or is the result of
bribes and comissions.
Abbas and his two brothers were shipping magnates. As such they were members of the international elite who have most to gain from Thirdworldisation aka Globalisation. Business goes where wages are lowest and a corrupt and oppressive police force can destroy labour organisations and other progressive movements with impunity.
During the 1980s Pakistan enjoyed a near monopoly in ship breaking. The steel industry was very successful in third world countries where low labour costs, and exploitation of natural gas fields made for profitable industry. This can be contrasted with the Rust-Belt phenomena of the traditional Northern bases of industry from Manchuria to Michigan.
The Gokal brothers and BCCI's founder Agha Hasan Abedi, shared the confidence of a new world balance of power centered on the massive Middle East oil deposits. Abedi went as far as to fund a very readable business magazine called SOUTH which was a welcome relief from the USA propaganda to be found in TIME and NEWSWEEK.
But according to the evidence presented at the Old Baily, Abbas Gokal was a fraudster. BCCI's loans to the Gokal shipping business were inflated, and their quality was upgraded by forgery. The fraud went on for over a decade. According to Dan Atkinson in the Guardian, things started to unravel in 1987. The BCCI-Gulf Transport Group consortium wanted to dip their fingers into the coffers of one of their best sponsors, Sheikh Zayid of Abu Dhabi. The reason for this was the financial hole left by huge losses suffered by Gulf on the derivatives market.
It is certainly true that Sheikh Zayid started to pick up the losses in 1990. This leaves open the argument of many muslims that the bank did not have to fail.
There is also deception in the way that Abbas Gokal was brought to justice. He was flying to the USA in order to clear himself of liability for abbetting in the production of a Pakistani nuclear bomb. Almost any high-tech metallurgy going to a third world country is suspect. In the same way developments of high tech chemical refining processes or pharmaceutical products in the Third World are accused of forwarding chemical warfare or illicit drug refining ventures.
The criminal consortium of nuclear bomb wielding western powers (FR-UK-USA) will do all they can to preserve their nuclear technology. They have collaborated in arresting Pakistani scientists and merchants involved in these quests.
Abbas Gokal took the plane from Karachi to New York in l994. British police arrested him during a refuelling stop at Frankfurt. Undoubtedly there was some quid pro quo, where the Americans would get some help from the Brits in rounding up another felon, most likely an 'Islamic Terrorist'.
The Pakistani business elite has little of which to be proud. They live a life of luxury while many of their compatriots are treated little better than slaves. While SOUTH was widely respected, their failure to stand up to islamic censorship must be criticised.
Recent trends are forcing third world business leaders to re-assess their relationship with government. Pakistan attempted to close down the mobile phone system in Karachi as a means of controlling the MQM and the bandit movements of Sind. This caused the whole of the business elite to see that censorship may destroy their ability to function. More to the point mobile phones are getting into the hands of the people whether they be Koranic dogmatists or women's organisations.
Electronic money (e-money) will be here soon, and if the current European hesitency over EMU is anything to go by, the first versions will be implemented by private business rather than governments. There are still almost one thousand days left for the definative Fraud of the Century. Many financial experts will express surprise, while more and more people will adapt the cynical view that these high profile court cases make up circuses to divert the attention of the masses while the true criminals remain unseen, and free.
References: [1] A Full Service Bank: The Story of BCCI See CACSA website [2] Mr Nice: an Autobiography Howard Marks. [3] Age of Extremes E.J. Hobsbawm [4] Seeds of Change. Henry Hobhouse.