Follow the money: how John Kerry busted the terrorists' favorite bank

Washington Monthly, Sept, 2004 by David Sirota, Jonathan Baskin

In the spring of 1989, Kerry hit another obstacle. Foreign Relations Committee chairman Claiborne Pell (D-R.I.), under pressure from both parties, formally asked Kerry to end his probe. Worried the information he had collected would languish, Kerry quickly dispatched investigator Jack Blum to present the information his committee had found about BCCI's money-laundering operations to the Justice Department. But according to Blum, the Justice Department failed to follow up.

The young senator from Massachusetts, thus, faced a difficult choice. Kerry could play ball with the establishment and back away from BCCI, or he could stay focused on the public interest and gamble his political reputation by pushing forward.

BCCI and the bluebloods

Kerry opted in 1989 to take the same information that had been coldly received at the Justice Department and bring it to New York District Attorney Robert Morgenthau, who agreed to begin a criminal investigation of BCCI, based on Kerry's leads. Kerry also continued to keep up the public pressure. In 1990, when the Bush administration gave the bank a minor slap on the wrist for its money laundering practices, Kerry went on national television to slam the decision. "We send drug people to jail for the rest of their life," he said, "and these guys who are bankers in the corporate world seem to just walk away, and it's business as usual ... When banks engage knowingly in the laundering of money, they should be shut down. It's that simple, it really is."

He would soon have a chance to turn his declarations into action. In early 1991, the Justice Department concluded its Tampa probe with a plea deal allowing BCCI officials to stay out of court. At the same time, news reports indicated that Washington elder statesman Clark Clifford might be indicted for defrauding bank regulators and helping BCCI maintain a shell in the United States.

Kerry pounced, demanding (and winning) authorization from the Foreign Relations Committee to open a broad investigation into the bank in May 1991. Almost immediately, the senator faced a new round of pressure to relent. Jacqueline Kennedy Onassis and Democratic doyenne Pamela Harriman personally called Kerry to object, as did his fellow senators. "What are you doing to my friend Clark Clifford?," staffers recalled them asking, according to The Washington Post. BCCI itself hired an army of lawyers, PR specialists, and lobbyists, including former members of Congress, to thwart the investigation.

But Kerry refused to back off, and his hearings began to expose the ways in which international terrorism was financed. As Kerry's subcommittee discovered, BCCI catered to many of the most notorious tyrants and thugs of the late 20th century, including Iraqi dictator Saddam Hussein, the heads of the Medellin cocaine cartel, and Abu Nidal, the notorious Palestinian terrorist. According to the CIA, it also did business with those who went on to lead al Qaeda.

And BCCI went beyond merely offering financial assistance to dictators and terrorists: According to Time, the operation itself was an elaborate fraud, replete with a "global intelligence operation and a Mafia-like enforcement squad."