Bank of England vows to fight £850m BCCI case to the finish

[emad]

Bank of England vows to fight £850m BCCI case to the finish

Mark Milner and Jill Treanor
Wednesday October 5, 2005
The Guardian


The Bank of England declared yesterday that it would fight to the finish the £850m lawsuit brought by the liquidators of the collapsed Bank of Credit and Commerce International.

The Bank of England ruled out any prospect of a negotiated settlement of the case, in which lawyers acting for the liquidators, Deloitte & Touche, allege the Bank failed to protect depositors when it closed down BCCI in 1991, leaving creditors owed an estimated £10bn. "We have always made it clear that there would be no deal and no negotiations," said a Bank spokeswoman.

The Bank's hardline response follows reports that the liquidators had offered to settle the case. Yesterday Deloitte & Touche confirmed it had made a number of approaches to the Bank over the last 12 years but all had been rebuffed. The most recent was made before the latest witness to be called in the hearing - Peter Cooke, a former head of banking supervision at the Bank of England - began giving evidence last month.

Deloitte & Touche said that liquidators had an obligation to secure a "quick and cost-effective settlement" for creditors. John Richards, who is in charge of the liquidation at Deloitte & Touche, said: "It is our usual practice to approach defendants to see if they are willing to negotiate and we regret that the Bank has so far refused to discuss a settlement. The Bank has unlimited public finances at its disposal, unlike the commercial organisations we have successfully pursued for recovery. The case continues."

http://www.guardian.co.uk/business/story/0,3604,1584847,00.html

[emad]

1. Equitable and BCCI's costly and difficult actions

Equitable and BCCI's costly and difficult actions
By Tom Bawden



LESS than two weeks ago, Equitable Life took the embarrassing step of dropping its remaining £700 million claim against its former auditors, Ernst & Young.

That climbdown was followed yesterday by the revelation that the liquidator of the Bank of Credit and Commerce International (BCCI) had sought to agree an out-of-court settlement with the Bank of England, 12 years into an £850 million legal battle.

On the surface, it may appear that legal advisers to Deloitte and Equitable have encouraged lengthy, improbable actions, while all the time lining their pockets with multi-million-pound fees.

The legal teams involved in the BCCI case so far have made comfortably in excess of £100 million, while those working on the Equitable Life action have made about £50 million.

http://business.timesonline.co.uk/article/0,,8210-1811513,00.html

[benburch]

2. Sounds like a modern Jarndyce v. Jarndyce...

12 years and no trial???

[blm]

3. To protect the BFEE. Do you think it will even come to trial in the US?

This is why I fight so hard to support Kerry. He's the only chance this world has to get all the BCCI revelations made public.

I doubt any other lawmaker would do it except Kucinich and Maxine Waters.

[emad]

4. Kerry was briefed by UK intelligence sources re BCCI actiivities

in the US and Carribean. And acted after those UK sources had testified before NYC's Bob Morgenthau.

The heart of the corruption centred around London and those same UK sources that set the ball rolling via Kerry in the US paid for all the initial research and preparation of the UK class action currently before the London lawcourts.

The London litigation was brought by some 20,000 UK creditors of BCCI who are suing the Bank of England as the supervisory/regulatory authority.

A similar class action in the US would be difficult because at the heart of the London allegations is the notion that BCI was headquartered in the UK and therefore the heart of the corruption lies there.

A US class action would have to prove a separate case for US supervisoru/regulatory activities sourrounding BCCI activities outside UK jurisdiction.

[Demeter]

5. Is THIS What Bush Needs All That Loot For?

Is he paying off BCCI? Why else steal like a starving beggar?

[WHAT]

9. That's what I really wonder, too... where is all the money for...

?...who knows what it is going towards?

In who's name?

What for?

Where for, to what ends the UK/US alliance...?

[emad]

6. See also:

http://www.timesonline.co.uk/newspaper/0,,172-1811681,00.html

[texpatriot2004]

7. Is BCCI suing for money? I am not understanding the article.

BCCI the corrupt establishment is suing for money?

[emad]

10. 20,000 former BCCI creditors are suing the Bank of England - as

the official regulatory body that oversees all banks/financial insitutions in the UK - for misfeasance - ie. gross negligence.

The litigants claim that the BoE knew damned well that BCCI was a totally corrupt scam, run by KGB-funded felons specialising in human trafficking, sponsoring terrorism/genocide/coups d'etat, child sex, narcotics, arms running, moneylaundering, vice in general AND buying the patronage of politicians everywhere.

The BoE claims it knew nothing and that it can't be sued because BCCI was a 'foreign bank'.

The litigants counter-claim and also state that under Margaret Thatcher this bank thrived with the full knowledge of her security/intelligence services - who were at some stages equally involved in BCCI corruption as equal partners.

The government of Abu Dhabi lost some $50billion when BCCI was shut down but small cretitors gained little if nothing when the liquidators shored up the remaining assets.

In the UK it has taken several legal appeals all the way to the House of Lords to subpoena critical classified documents that prove that the Thatcher/Reagan + Bush1 triumvirate whitewashed details of this global corruption not for any national/international security reasons, but for the sake of saving their own skins.

[texpatriot2004]

11. Thanks for the BCCI explanation. What is your opinion on this

money issue?

[emad]

13. I think the creditors deserve every penny of the unprecedented

£1billion compensation they are asking for.

The Bank of England's gross negligence was central to the initial financial success of BCCI. When the bank collapsed, the BoE was criminally culpable for the losses sustained by the depositors who were offered a measly 2p in the £ initially from the liquidators against their lost deposits.

The litigants in the London class action are some 20,000 small time former customers - some business some private. When the first signs of potential trouble in BCCI's liquidity became apparent, the BoE issued a statement saying nobody should worry, everybody's savings, investments and current acount balances were safe.

As a result of this boost in confidence, there was no run on the bank in the UK, which continued to trade for some 12 months before the shutters came down and a £9billion hole became apparent in the accounts.

Suing the Bank of England is unprecedented in the UK. But this class action serves to illustrate that collusion in criminality was the lynchpin between sucessive UK political administrations - under Thatcher and later under Major - in allowing BCCI to continue trading by encouraging the BoE (at that time the official banking arm of the UK Treasury) to call the shots at the expense of the customers who were being duped.

[texpatriot2004]

14. Makes sense. What is the status of the class action suit? Is the

Bank of England going to have to pay?

[emad]

15. It would be unprecedented if it had to cough up but the creditors'

case is pretty strong.
The reported attempts at an out-of-court settlement are usual in this kind of long running debacle.

The issue is one of criminal negligence. To prove it, many UK newspapers have commented that former UK premier John Major should be subpoenaed to testify, Thatcher being too far advanced in senile dementia to do so herself.

[UpInArms]

8. BCCI and the Bushes

http://www.commondreams.org/views04/0111-01.htm

excerpt:

During these years, Bush's four sons — George W., Jeb, Neil and Marvin — were following in the family footsteps, lining up business deals with Saudi, Kuwaiti and Bahraini moneymen and cozying up to BCCI. The Middle East was becoming a convenient family money spigot.

Eldest son George W. Bush made his first Middle East connection in the late 1970s with James Bath, a Texas businessmen who served as the North American representative for two rich Saudis (and Osama bin Laden relatives) — billionaire Salem bin Laden and banker and BCCI insider Khalid bin Mahfouz. Bath put $50,000 into Bush's 1979 Arbusto oil partnership, probably using Bin Laden-Bin Mahfouz funds.

In the late 1980s, after several failed oil ventures, the future 43rd president let the ailing oil business in which he was a major stockholder and chairman be bought out by another foreign-influenced operation, Harken Energy. The Wall Street Journal commented in 1991, "The mosaic of BCCI connections surrounding Harken Energy may prove nothing more than how ubiquitous the rogue bank's ties were. But the number of BCCI-connected people who had dealings with Harken — all since George W. Bush came on board — likewise raises the question of whether they mask an effort to cozy up to a presidential son."

Other hints of cronyism came in 1990 when inexperienced Harken got a major contract to drill in the Persian Gulf for the government of Bahrain. Time magazine reporters Jonathan Beaty and S.C. Gwynne, in their book "The Outlaw Bank," concluded "that Mahfouz, or other BCCI players, must have had a hand in steering the oil-drilling contract to the president's son." The web entangling the Bush presidencies was already being spun.

...more...

http://www.fas.org/irp/offdocs/walsh/chap_08.htm

excerpt:

In raising the $15 million bridge financing for the HAWKs spare parts, Khashoggi in April 1986 asked British entrepreneur Tiny Rowlands to invest. After Rowlands declined, Khashoggi turned to Oussama Lababidi who, using the name ``Kremdale Corporation,'' put up $5 million. The remaining $10 million came from Vertex International in the Cayman Islands, backed by investors Ernie Walter Miller and Donald Fraser of Canada. Khashoggi said he created a company ``Trivert International,'' to handle the Vertex loan.40

40 Khashoggi, FBI 302, 5/8/87, p. 10, and 11/4/87, p. 5. According to bank records obtained by Independent Counsel, on May 14, 1986, a $10 million payment was made into Lake Resources by Trivert International by order of W.E. Miller. On May 16, 1986, Lake Resources received $5 million from Garnet Overseas at BCCI; Garnet received the funds from Khashoggi's account and Khashoggi's account received the funds from Ray Trading. Because Ghorbanifar only repaid $8 million, the investors lost $7 million of their initial investment. Ghorbanifar received from Iran only $4 million; it is unclear where he obtained the other $4 million to partially repay the investors.

In June 1986, the Iranians obtained a U.S. price list for the HAWK spare parts. After seeing the list, they refused to pay the radically inflated amount -- $24 million -- Ghorbanifar had charged them. As a result, Ghorbanifar paid back Khashoggi a total of only $8.1 million on the $15 million bridge-financing loan, which with the 20-percent bridge-financing commission required payment to Khashoggi of $18 million.

While these financial disputes were brewing, the Reagan Administration decided to pursue a ``second channel'' into the Iranian parliament, cutting out Ghorbanifar, his Iranian contact and Nir. When Poindexter told Nir about the second channel in September 1986, Nir responded that making a switch would require paying off Ghorbanifar's $10 million debt to the financiers.41

...more...

http://www.etext.org/Politics/AlternativeOrange/2/v2n3_wts.html

excerpt:

October Surprise:

— approached Israeli government and encouraged them to cooperate with Reagan campaign.

— elements in CIA may have aided Reagan in order to avenge Carter’s distrust of the agency.

Iran-Contra:

— former CIA official Alan Fiers stated that the CIA knew that proceeds from US shipments to Iran were being diverted to aid the contra’s.

— CIA assets used in scheme, e.g., an air base near Tucson for the covert resupply of contra’s when Congress had prohibited aid.

BCCI Scandal:

— was channeling funds for several covert operations through BCCI, including aid to Afghan rebels.

— by 1984, had targeted BCCI as source of information about money laundering by drug dealers and terrorists; CIA may have ignored BCCI’s illegal activities to collect intelligence from inside the bank.

— investigators are looking into CIA’s failure to properly alert government regulators once they became aware of BCCI’s activities.

— CIA has admitted to using BCCI for the transfer of funds to covert operations at the same time it was investigating the bank.

...more...

[texpatriot2004]

12. Interesting BCCI post I know they have a long history with it and

that Kerry has been onto it for years.

[Karenina]

16. Kick!

:kick: