[A-List] UK state: BCCI investigation

["Michael Keaney" <michael.keaney@xxxxxx>]

Here's another fishy episode worthy of deeper investigation. The collapse of
the Bank of Cocaine and Conmen International was triggered by the Bank of
England, which endured a lot of stick in the immediate aftermath. 1991 was
also the year that another MI6 conduit, Robert Maxwell, was "closed down".
Are the two by any chance connected?


Treasury seeks new BCCI gag

Conal Walsh
Sunday October 6, 2002
The Observer

Treasury officials are fighting a last-ditch battle to stop MI6 documents
being handed over to creditors of the collapsed Bank of Credit and Commerce
International.

The bid to keep the papers secret comes after the Government was ordered by
the High Court to disclose what Ministers, civil servants and regulators
knew about BCCI before it crashed in 1991 with debts of £7 billion.

Transcripts of interviews with John Major, the former Prime Minister, as
well as a number of former Chancellors, are also among the confidential
papers being handed over to the creditors, led by Deloitte & Touche, BCCI's
liquidator.

The creditors are suing the Bank of England for up £1bn, claiming senior
officials at Threadneedle Street were warned about fraud at BCCI but turned
a blind eye. They hope the secret papers will help their case.

The Government has fiercely resisted their claim but failed in July to
overturn a High Court judgment forc ing it to surrender the documents. At a
court hearing last week, however, it presented a fresh application to
withhold sections of the MI6 papers on security grounds.

The relationship between Britain's intelligence services and BCCI has long
been debated, with speculation that MI6 used accounts at the secretive bank
to pay sources and operatives around the world. It has also been claimed
that the bank channelled funds in the Eighties from the US and Saudi secret
services to Mujahideen fighters in Afghanistan.

Most of the classified evidence being turned over to creditors was collected
by Lord Bingham's 1992 inquiry into BCCI's collapse. Bingham criticised the
Bank of England for failing to supervise BCCI, but kept many findings
confidential.

Creditors won the right to sue the Bank of England last year, and the trial
will begin in October 2003. Senior officers, including the Bank's present
Governor, Sir Eddie George, may give evidence.