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Lance Claims CIA Recruited BCCI Founder In Order To Use Bank

October 23, 1991

WASHINGTON (AP) _ Former federal budget director Bert Lance told Congress on Wednesday he’s convinced the CIA recruited the founder of the Bank of Commerce and Credit International in 1984 in order to use the bank for CIA purposes. The CIA denied it.

Lance, testifying before the Senate subcommittee, said BCCI’s Pakistani founder, Agha Hasan Abedi, told him in 1983 that he had been on a CIA watchlist since 1981 because he was considered ″a third-world liberal″ by the Reagan administration.

But within a year after detailing his ″grave concern″ about incidents of harassment by U.S. authorities, Abedi’s attitude toward the CIA changed and he never mentioned any problems again, Lance said.

″In 1984, I felt there was obviously an overt effort by our intelligence agency ... to co-opt Mr. Abedi and BCCI in an effort to turn them into the bank of the CIA,″ Lance told the subcommittee on terrorism, narcotics and international operations.

In a related development, Rep. Charles E. Schumer, D-N.Y., told President Bush he was ″very disturbed″ to learn that Edward Rogers, until recently an aide to White House Chief of Staff John Sununu, had been hired to represent a prominent figure in the BCCI scandal.

In a letter, Schumer urged Bush to order an investigation of the new business relationship between Rogers and Sheik Kemal Adham, a former chief of Saudi Arabia’s intelligence service who is being investigated in connection with BCCI.

White House spokesmen didn’t immediately return a telephone call seeking comment.

Lance’s statements buttressed testimony Tuesday by Abdur Sakhia, a former top BCCI official who told the subcommittee that Abedi apparently had been taken off the CIA watchlist around 1984.

But Mark Mansfield, a CIA spokesman, called the testimony ″absolutely false.″

″Such claims are nonsense,″ he said.

Lance, who resigned as budget director in the Carter administration and later was tried and acquitted of bank fraud charges, is cooperating with the subcommittee’s investigation of BCCI.

The Luxembourg-based bank and its two top executives were accused last summer by a New York grand jury of fraud and theft of more than $30 million from depositors.

The Federal Reserve has accused the bank of using Middle Eastern front men to secretly purchase First American Bankshares of Washington, the National Bank of Georgia and other U.S. banks.

Lance said that when he first met Abedi after resigning his federal post in 1977, the Pakistani banker told him he was interested in entering the U.S. market and also represented a group of wealthy Arabs interested in investing in the United States.

Lance, who was a paid consultant for BCCI for a year, said he suggested that BCCI buy Financial General Bankshares, later renamed First American Bankshares, in the nation’s capital. He said he advised Abedi to follow U.S. bank regulatory procedures because ″I learned a long time ago that what you can’t do directly, you can’t do indirectly.″

During the same period, Lance said he was trying to find a buyer for the National Bank of Georgia, of which he owned 12 percent, and Abedi told him that Saudi billionaire Ghaith Pharaon, one of the investors he represented, might be interested.

Pharaon eventually purchased the Georgia bank, but Lance said he never had any reason to believe that Pharaon was acting as a front for BCCI, as the Federal Reserve now contends.

″My impression was that it was a Pharaon transaction, that he was not acting in behalf of anyone else, that he was marching to his own orders,″ he said.

After his highly-publicized trial and acquittal on bank fraud charges in 1981, Lance said he had no further business dealings with Abedi or BCCI. He said his consulting role in the purchase of Financial General was assumed by Clark Clifford and Robert Altman - the two men who headed the successor company, First American.

The two Washington lawyers have insisted they did not know that BCCI owned First American. Clifford resigned this summer as chairman of First American and Altman stepped down as a director and president of an affiliate.

After his business relationship with BCCI ended in 1981, Lance said he continued to maintain a personal relationship with Abedi and introduced him to former President Carter in 1983.

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