Ever since Pakistani financier Aga Hassan Abedi founded the bank in 1972, BCCI has been unorthodox. In the mid-1970s, U.S. regulators blocked it from buying two New York banks after Abedi refused to disclose BCCI data. In 1977, he secretly aided Saudi entrepreneur Gaith Pharaon’s purchase of National Bank of Georgia from President Carter’s budget director, Bert Lance, and five years later secretly backed a hostile takeover of a major Washington bank, later renamed First American Bankshares. Former Defense secretary Clark Clifford, longtime counselor to Democratic presidents, was installed as chairman–though Clifford has claimed he had no knowledge of BCCI’s role.
Through it all, Abedi apparently managed to make money-though the bank might not have. The full details have yet to emerge, but regulators speak openly of fraud. As Bank of England Governor Robin Leigh-Pemberton observed wryly on Friday, “The bank has not been successful for some years in its lending and treasury operations.” But if BCCI proved one thing conclusively, it’s that bankers can profit in, er, nontraditional areas.
