It's been disclosed that British Prime Minister John Major and his Chancellor of the Exchequer Norman Lamont, as well as the governor of the Bank of England, Robin Leigh-Pemberton, knew the Bank of Credit and Commerce International was in trouble for a considerable period before its closure — as far back as 1990, when Major was still the chancellor of the exchequer.
So it is only proper that their U.S. government counterparts — President George Bush, Treasury Secretary Nicholas Brady and Federal Reserve Chair Alan Greenspan — reveal to the public precisely what they knew about the bank's pending collapse, and when.
It is a matter of the highest political significance. Did each of the principal governmental authorities in Britain and the United States know about the pending collapse of BCCI, the worldwide Third World bank with 1,200,000 depositors around the globe and assets of $20 billion? And when did they know it? That's the critical issue.
The dates are rather significant. Robin Leigh-Pemberton, the governor of the Bank of England, whose official position is similar to that of Alan Greenspan of the Federal Reserve, asserts that he and the then-chancellor of the exchequer, John Major, knew about the impending collapse as far back as January 1990. He also says this information was communicated to the U.S., even to such low government officials as the Manhattan district attorney.
If this is so, then it must be assumed that the delay in taking action against the bank was based on the need of both the U.S. and the other imperialist allies to divert the worldwide banking crisis and the capitalist economic crisis in general into an imperialist war against Iraq.
The intervention in the Middle East by the imperialist powers was based on an agreement to divide markets and sources of raw materials. At the same time, a primary consideration was to divert the growing capitalist economic malaise into an imperialist war as a means of staving off or completely eliminating the emerging capitalist crisis.
Everyone now knows that the military stimulant to the capitalist economy did not stave off the economic crisis. It actually served to depress the economy. Now it is clear in more concrete terms how a pending financial crisis accelerated the military adventure against Iraq.
It should be noted that in addition to the BCCI debacle, England had a financial crisis arising from the failure of one of its big banks at about the same time that the S&L savings banks crisis here had reached such menacing proportions that the U.S. government obligated itself to resort to a bailout.
It is not enough for the U.S. press — its leading organs such as the New York Times, Wall Street Journal, Los Angeles Times and others — just to throw in names of prominent U.S. officials supposedly tainted by their connection with BCCI. These include former Atlanta Mayor Andrew Young, who was an officer of a consulting company to the bank; Clark Clifford, a former presidential adviser and secretary of defense; former President Jimmy Carter, who received some contributions from the bank for some of his so-called charitable organizations; and, more important, Paul Volcker, chair of the Federal Reserve during the Carter and Reagan administrations.
These are peripheral issues. The fundamental issue is whether President Bush, Treasury Secretary Brady and Federal Reserve Chair Greenspan knew as long ago as did their British counterparts about BCCI's problems.
The bank's problems, whatever they may be, are invested with the highest political significance precisely because BCCI is a top-to-bottom Third World bank. All its officers are from oppressed countries, mostly from Pakistan and the Middle East.
The continuing banking crisis involving more and more of the big banks is almost always explained in the capitalist press as the result of mismanagement, fraud, misappropriation of funds, deception and corruption. It's not surprising that a considerable number of bank executives are immediately removed and some are indicted for criminal bank-related conduct.
Bribery, corruption and criminal conduct in general are inseparable from capitalism. However, it achieves an acute form at a time of banking crisis. It is almost a given that if a big bank like BCCI is on the verge of collapse, a number of officials of the bank will either be replaced, or charged with mismanagement, malfeasance, criminal conduct, or both.
However, one has only to read the July 29 issue of Time magazine to conclude that the BCCI closing was politically motivated, in more than one way. On the one hand the imperialist governments that shut down BCCI had delayed their move against the bank in order to open the military offensive against Iraq. On the other hand they have re-opened a second offensive against the Middle East that may prove as deadly as the military one — only it is conducted by other means.
It's a financial and economic offensive intended to buttress and round out the earlier military offensive. It's part and parcel of the imperialist powers' larger strategy.
The Time article is clearly calculated to lay the ideological basis for the attack. The article is virulent, absolutely vituperative in its attack against both the bank and its officials. It is incredible that such a leading organ of big business with such a wide readership abroad, particularly in the English-speaking oppressed countries, could resort to such a strategy.
Time did, however, because such are the needs of U.S. imperialism in the struggle against the oppressed peoples. Beginning with the cover of the magazine all the way to the last line of the lengthy piece, it is full of racist invective, the kind that shows this is a calculated and deliberate effort.
The article accuses the bank and its officials of almost every crime — falsifying documents, making unauthorized loans, hiding and manipulating deposits, organizing global looting operations and running a "black network" that carries out all sorts of illegal activities.
The bank itself is characterized as a criminal operation, engaged in drug laundering and virtually every other crime under the sun, including kidnaping and murder and allowing terrorists to use bank facilities.
Worst of all crimes is that BCCI's ledgers are written in longhand and, moreover, in the Pakistani language of Urdu.
Of all the alleged crimes listed in this article, the only one on the public record is the operation in the U.S., where the bank was convicted of money laundering. However, U.S. banks like Bank of America, First Boston Corporation, Chase Manhattan, Manufacturers Hanover Trust, Chemical, Crocker National and Irving Trust Company were also convicted of similar charges. Yet they are still considered paragons of virtue.
Of course, Time mentions the CIA and other Western intelligence operations. But it's made to look like the crooked BCCI officialdom was using the CIA and other Western intelligence agencies rather than the other way around.
The reader loses track of what is actually being said because of the abusive language and the manner in which the article is written. It is clearly overkill from any point of view. In the article, Noriega, Marcos, Libya and of course Saddam Hussein are all thrown in for good measure.
However, it must have become obvious to Time's editors that the magazine's many English-speaking readers in the oppressed countries would dismiss the article as so much imperialist propaganda.
So at the very end they added a short accompanying piece titled "Scandal? What Scandal?" It asserts: "A senior executive with one of Bahrain's largest companies notes that the powers closing in on BCCI are `the same people who were involved in the coalition during the Gulf War, mainly America, Britain and France.' Many Gulf residents believe, he says, that the Western coalition members are `not satisfied with now controlling the Middle East militarily. Through this action against BCCI, the coalition is also seeking to control us financially and economically.' "
This confirms what Workers World wrote even before the BCCI news broke. The BCCI seizure is a counterpart to the military intervention in Iraq.
Whatever BCCI's vicissitudes during its tenure as a worldwide institution — and we hold no brief for its officers or the conduct of the bank — they probably were not much different than those of other banks around the world. But politically, it seemed to be a challenge, a show of independence. But it was only a show.
At the same time, the bank had become a depository. It had obtained more than 1.2 million depositors, an enormous number. It also had the potential to exercise some political influence, notwithstanding the power of the CIA and other Western intelligence organizations.
But along came the international capitalist crisis of the banking industry. It endangered the existence of many, many banks in the United States. At the same time, the crisis might have created some formidable difficulties for BCCI as well.
It would have been easy as pie to extend the same kind of considerations to this bank as is done with U.S. or British banks. When they have some of the same problems as BCCI the central bank — the Federal Reserve in the U.S. or the Bank of England in Britain — intervenes on their behalf.
Instead, however, BCCI was shut down — illegally, arbitrarily and contrary to all precedent. The imperialist countries thereby became the beneficiary of billions of dollars of deposits drained from oppressed people in 69 to 73 countries, mostly in the Third World.
It is a form of robbery of the financial assets of the oppressed. It comes at a time when the U.S. is viewing its military victory as a Pyrrhic one. What good is a military victory, asks the U.S. bourgeoisie, if it cannot be translated into an economic and financial one, especially for domination over the oil assets in the Arabian peninsula?
It was an unmistakable warning first of all to Saudi Arabia and also to Syria, Iran and Libya as well, of course, as Iraq. (Note foreign affairs writer Flora Lewis's column in the New York Times July 19 titled "Cut Saudi Arabia Down to Size.") It proves that the objective of military aggression is domination over every aspect of economic and financial life in the Middle East.
Sheik Zayed bin Sultan al-Nahaytan, BCCI's principal shareholder who owns 77% of the stock, was rudely brushed aside as Bank of England regulators shut the bank's operations down and opened up a phase of BCCI shutdowns and liquidations all over the world.
It was the imperialists' cruel and brutal way of saying, "You may be legally the owner of the stock, but we are in control and don't you forget it."
In this context, it is very important to take into account the Leninist conception of the national question and the right of nations to self-determination. That is the key issue in connection with the struggles in the Middle East in general and the BCCI takeover in particular. The characteristic feature of monopoly capitalism is the struggle of the oppressed nations against imperialism.
So it is in this case. The working class struggle in all countries must be directed toward the struggle against imperialism and the defense of the oppressed nations against its ravages.
The struggle for socialism and against imperialist domination is of course directed against feudal bondage and against the bourgeoisie. In the oppressed countries, the latter will under some circumstances join with the struggle of the masses against imperialism, but it is always ambivalent and rent by a hundred contradictions within its own camp. The bourgeoisie rarely if ever consistently pursues with the masses the anti-imperialist struggle to the very end.
Last updated: 19 February 2018