Founded in 1976, Faisal Islamic Bank of Egypt (FIBE) is part of the banking empire built by Saudi Prince Mohammed al-Faisal. Several of the founding members are leading members of the Muslim Brotherhood, including the “Blind Sheikh,” Sheikh Omar Abdul-Rahman. The growth of Islamic banking directly funds the political growth of the Islamist movement and allows the Saudis to pressure poorer Islamic nations, like Egypt, to shift their policies to the right. The Islamic banking boom is closely associated with the neoliberal free-trade philosophy of the Chicago School of Economics, with the free-trade prescriptions of the International Monetary Fund, and with conservative think-tanks like the Virginia-based Islamic Free Market Institute. FIBE is also closely associated with the infamous Bank of Credit and Commerce International (BCCI), which will be found to be deeply implicated in the illegal arms and narcotics trades, and with the funding of terrorist organizations when it collapses in 1991. Investigators will also find that BCCI held $589 million in “unrecorded deposits,” $245 million of which were placed with FIBE. [Dreyfuss, 2005, pp. 164 – 175]
1976: James Bath Opens Aircraft Brokerage Firm; Investors Tied to BCCI and Osama bin Laden
James Bath, who has some unexplained ties to George W. Bush, opens an aircraft brokerage firm. Investors for the firm include Texas Governor John Connally, alleged Bank of Credit and Commerce International (BCCI) Saudi front man Ghaith Pharaon, and Saudi banker Khalid bin Mahfouz, a major BCCI shareholder and husband to one of Osama bin Laden’s sisters. Time magazine will later report that “Bath’s penchant for secrecy has been frustrated by a feud with a former business partner, Bill White, who claims that Bath was a front man for CIA business operations. White contends that Bath has used his connections to the Bush family and Texas Senator Lloyd Bentsen to cloak the development of a lucrative array of offshore companies designed to move money and airplanes between the Middle East and Texas.” Bath will deny White’s claims, saying, “I am not a member of the CIA or any other intelligence agency.” However, he will acknowledge knowing Bush from serving with him during his time in the Texas Air National Guard. But, as Time will note: “Even so, Bath, while insisting he is nothing more than a ‘small, obscure businessman,’ is associated with some of the most powerful figures in the US and Middle East. Private records show, and associates confirm, that Bath is a ‘representative’ for several immensely wealthy Saudi families, an unusual position for any small-time Texas businessman.” As Time will note, “The firm that incorporated Bath’s companies in the Cayman Islands is the same one that set up a money-collecting front company for Oliver North in the Iran-Contra affair.” [Time, 6/24/2001] There will be further evidence linking both Bath and bin Mahfouz to Bush (see June 4, 1992 and 1988).
Shortly After September 1, 1976: CIA and Other Intelligence Agencies Use BCCI to Control and Manipulate Criminals and Terrorists Worldwide
The Safari Club, a newly formed secret cabal of intelligence agencies (see September 1, 1976-Early 1980s), decides it needs a network of banks to help finance its intelligence operations, investigative journalist Joseph Trento will later report. Saudi Intelligence Minister Kamal Adham is given the task. “With the official blessing of George H. W. Bush as the head of the CIA, Adham transformed a small Pakistani merchant bank, the Bank of Credit and Commerce International (BCCI), into a worldwide money-laundering machine, buying banks around the world to create the biggest clandestine money network in history.” BCCI was founded in 1972 by a Pakistani named Agha Hasan Abedi, who was an associate of Adham’s. Bush himself has an account at BCCI established while he was still director of the CIA. French customs will later raid the Paris BCCI branch and discover the account in Bush’s name. [Trento, 2005, pp. 104] Bush, Adham, and other intelligence heads work with Abedi to contrive “a plan that seemed too good to be true. The bank would solicit the business of every major terrorist, rebel, and underground organization in the world. The intelligence thus gained would be shared with ‘friends’ of BCCI.” CIA operative Raymond Close works closely with Adham on this. BCCI taps “into the CIA’s stockpile of misfits and malcontents to help man a 1,500-strong group of assassins and enforcers.” [Trento, 2005, pp. 104] Soon, BCCI becomes the fastest growing bank in the world. Time magazine will describe it as not just a bank, but also “a global intelligence operation and a Mafia-like enforcement squad. Operating primarily out of the bank’s offices in Karachi, Pakistan, the 1,500-employee black network has used sophisticated spy equipment and techniques, along with bribery, extortion, kidnapping, and even, by some accounts, murder. The black network—so named by its own members—stops at almost nothing to further the bank’s aims the world over.” [Time, 7/22/1991]
1978-1982: Criminal BCCI Secretly Buys CIA’s Main US Bank; Even as CIA Uses Bank for Covert Operations
Beginning in 1978, a group of foreign investors attempt to buy First American Bankshares, the biggest bank in the Washington, D.C., area. This group is fronted by Kamal Adham, the longtime Saudi intelligence minister until 1979. In 1981, the Federal Reserve asks the CIA for information about the investors, but the CIA holds back everything they know, including the obvious fact that Adham was intelligence minister. As a result, the sale goes through in 1982. It turns outs that Adham and his group were secretly acting on behalf of the criminal Bank of Credit and Commerce International (BCCI), and BCCI takes over the bank. [Washington Post, 7/30/1991; US Congress, Senate, Committee on Foreign Relations, 12/1992] Time magazine will later report that “the CIA kept some accounts in First American Bank, BCCI’s Washington arm.” But additionally, “Government investigators now have proof that First American had long been the CIA’s principal banker. Some of the more than 50 agency accounts uncovered at the bank date back to the 1950s. BCCI owned the CIA’s bank for a decade.” [Time, 3/9/1992] The CIA soon learns that BCCI secretly controls the bank, if the CIA didn’t already know this from the very beginning. By 1985, the CIA will secretly inform the Treasury Department on the bank’s control by BCCI, which would be illegal. But no action is taken then or later, until BCCI is shut down. Sen. John Kerry’s BCCI investigation will later conclude, “even when the CIA knew that BCCI was as an institution a fundamentally corrupt criminal enterprise, it used both BCCI and First American, BCCI’s secretly held US subsidiary, for CIA operations. In the latter case, some First American officials actually knew of this use.” [US Congress, Senate, Committee on Foreign Relations, 12/1992]
1979-1991: Criminal BCCI Bank Repeatedly Saves Pakistan from Financial Ruin
By 1979, Pakistan’s economy is on the brink of collapse. Pakistan owes large debts to international organizations such as the World Bank and the International Monetary Fund (IMF), but lacks the money to pay off its loans. The criminal BCCI bank led by Agha Hasan Abedi comes up with a scheme to save Pakistan’s economy. In 1979, the IMF says that if Pakistan increases its hard currency reserves by at least $50 million for 90 days, Pakistan’s State Bank can raise the lending limits for commercial banks. With banks able to make more loans, the economy will be able to perform better. BCCI secretly loans the State Bank the hard currency until the 90 days are over and then takes it back. Having established this system, BCCI helps Pakistan’s State Bank numerous times in subsequent years to avoid financial limitations placed on Pakistan. BCCI will finally collapse in 1991 (see July 5, 1991). [Beaty and Gwynne, 1993, pp. 292-293]
1979-1991: US Government Ignores Over 700 Tips about BCCI’s Criminal Activities
According to a 1992 Congressional investigation led by Congressman Charles Schumer (D-NY), between 1979 and 1991, federal law enforcement agencies receive more than 700 tips about BCCI’s criminal activities. The criminal BCCI bank will finally be shut down in 1991 (see July 5, 1991). The tips include BCCI involvement in: 
Promoting political unrest in Pakistan. Smuggling arms to various countries, including Syria, Libya, and Iran. Financing terrorist groups. Links to organized crime in the US and Italy.
Time magazine reporters Jonathan Beaty and S.C. Gwynne will later comment in a book: “Too many people knew too much about BCCI, and they knew it long before the bank spun itself into bankruptcy and scandal.… That [CIA Deputy Director] Robert Gates could jokingly refer to it in a conversation with Customs chief William von Raab as the “bank of crooks and criminals” three years before the scandal broke merely reflects the run of knowledge around Washington. Indeed, it would probably have been difficult to find very many people with real power who did not know about the bank, based on the wide distribution of CIA reports.” Schumer will later conclude: “At the very least, there was nobody putting together all the pieces.… You could make a credible case that somebody told them not to do anything about BCCI.” [Beaty and Gwynne, 1993, pp. 346]
1980s: Much US and Saudi Aid Meant for Afghan Fighters Goes to ISI and A. Q. Khan Network
Much of the billions of dollars in aid from Saudi Arabia and the CIA to the Afghan mujaheddin actually gets siphoned off by the Pakistani ISI. Melvin Goodman, a CIA analyst in the 1980s, will later say, “They were funding the wrong groups, and had little idea where the money was going or how it was being spent.” Sarkis Soghanalian, a middleman profiting from the aid, will later say, “The US did not want to get its hands dirty. So the Saudis’ money and the US money was handled by the ISI. I can tell you that more than three quarters of the money was skimmed off the top. What went to buy weapons for the Afghan fighters was peanuts.” Sognhanalian claims that most of the money went through various accounts held at the notoriously corrupt BCCI bank, then was distributed to the ISI and the A. Q. Khan nuclear network. [Trento, 2005, pp. 318] Robert Crowley, a CIA associate director from the 1960s until the 1980s, will also refer to the aid money going to Khan’s network, commenting, “Unfortunately, the Pakistanis knew exactly where their cut of the money was to go.” An early 1990s congressional investigation led by Sen. John Kerry (D-MA) will also come to the same conclusion. [Trento, 2005, pp. 314, 384]
1981-1991: CIA Uses BCCI Bank to Pay 500 British Informants
In 1991, the Guardian will report that for at least the past ten years, the CIA has secretly had nearly 500 Britons on its payroll and has been paying them through accounts at the criminal BCCI bank. Some are in senior positions, although no specific individuals are named. Some of these informants have told the CIA details about British arms sales and other overseas business deals, sometimes before the contracts are finalized. According to intelligence sources, the informants include: 124 people in government or politics. 53 in commerce, industry, and banking. 75 in academia. 24 scientists. 124 in communications. 90 in the media. [Guardian, 7/26/1991]
There will be no report of these informant contacts stopping after the BCCI scandal in 1991.
1981-1983: NSC Gains a Clear Picture of BCCI’s Criminal Activities from CIA Reports
Norman Bailey, a member of the National Security Council (NSC) whose specialty is monitoring terrorism by tracking finances, will later reveal that in the early 1980s the NSC learns that BCCI is not just a bank but is engaged in widespread criminal activity. “We were aware that BCCI was involved in drug-money transactions,” he will later say. “We were also aware that BCCI was involved with terrorists, technology transfers—including the unapproved transfer of US technology to the Soviet bloc—weapons dealing, the manipulation of financial markets, and other activities.” The main source for the NSC about this are reports from the CIA. From 1981 on, the NSC learns of BCCI’s role in illegal technology deals for Pakistan, Iraq, Libya, Iran, and other countries. A clear picture has emerged by the start of 1984. But neither the CIA nor the NSC take any action against the bank. [Beaty and Gwynne, 1993, pp. 291, 315]
1981 and After: BCCI Charity Front Funnels Money to A. Q. Khan’s Nuclear Program
In 1981, the criminal BCCI bank sets up a charity called the BCCI Foundation. Pakistani Finance Minister Ghulam Ishaq Khan grants it tax-free status, and it supposedly spends millions on charitable purposes. Khan serves as the chairman of the foundation while also running the books for A. Q. Khan’s Kahuta Research Laboratories. Ghulam Ishaq Khan will be president of Pakistan from 1988 to 1993. [Levy and Scott-Clark, 2007, pp. 126-127] BCCI founder Agha Hasan Abedi announces that he will donate up to 90% of BCCI’s profits to charity through the foundation, and he develops a positive reputation from a few well-publicized charitable donations. But the charity is actually used to shelter BCCI profits. Most of the money it raises goes to A. Q. Khan’s nuclear program and not to charitable causes. For instance, in 1987 it gives a single $10 million donation to an institute headed by A. Q. Khan. Millions more go to investments in a front company owned by BCCI figure Ghaith Pharaon. [Beaty and Gwynne, 1993, pp. 290-291] An investigation by the Los Angeles Times will reveal that less than 10% of the money went to charity. [Los Angeles Times, 8/9/1991] BCCI uses other means to funnel even more money into A. Q. Khan’s nuclear program (see 1980s).
