Sen. Orrin Hatch, the powerful Republican from Utah who is a member of the Senate Judiciary Committee, worked behind the scenes on behalf of the Bank of Credit and Commerce International while at the same time pressing the bank to make a $10 million loan to a close business associate.
From documents and interviews with bank lawyers, a picture emerges of Hatch and an aide as integral parts of the bank`s efforts to escape Senate scrutiny and avoid bad publicity after the bank pleaded guilty in 1989 to federal charges of laundering drug money.
Hatch gave a widely reported Senate speech in 1990 defending BCCI and he later publicly acknowledged having asked the bank to lend money to Monzer Hourani, a Houston businessman. But an examination of bank documents and the interviews with lawyers and others found that the relationship went much deeper.
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These were among the findings:
– In late 1989, when a Senate subcommittee began a formal investigation of the bank`s ties to dictators and terrorists, Michael Pillsbury, a longtime aide to Hatch and an expert on national security, advised the bank`s lawyers on how to counterattack another senator`s inquiry.
– After BCCI resolved the money-laundering case in Tampa by reaching a plea agreement that many government officials complained was far too lenient, Hatch urged high-ranking Justice Department officials to step forward and defend the plea deal. A senior Justice Department official acknowledged the call. And a BCCI lawyer in Washington, Raymond Banoun, said he was present in Hatch`s office when the senator placed the call.
– The senator said he made his Senate speech on behalf of BCCI after the bank`s lawyers had assured him that the money-laundering case involved only low-level corruption. But some of BCCI`s lawyers, including Banoun, said in interviews that they were actually reluctant to meet with the senator, fearing such a meeting would backfire and anger the Justice Department. The lawyers said they only sat down with the senator under pressure from Mohammad Hammoud, a close friend of Hatch and also a large BCCI shareholder. Hammoud died in 1990.
– Hatch earlier acknowledged news reports that he telephoned BCCI`s president in London, Swaleh Navqi, to ask him to consider lending money to Hourani. He portrayed this as a casual request that had no results. But BCCI documents show that Hourani, who is a close friend and campaign contributor to Hatch, himself made a detailed proposal for the loan. The loan apparently was never made.
Hatch`s motivation for helping the bank was not clear. But at least three of his friends stood to benefit if BCCI could remain a going concern in the U.S.: Hammoud, a large shareholder in BCCI; Robert Altman, one of the bank`s chief lawyers, and Hourani.
Hatch declined an invitation to discuss the details of a New York Times examination of the documents. In a recent statement responding to questions from the Times, Hatch said he would ask the Senate Ethics Committee to investigate the activities of Pillsbury, the aide who met with the BCCI lawyers.
Pillsbury, in an interview last week, said the discussions with the lawyers were held at the senator`s behest. Pillsbury, formerly a high-ranking State Department official, said he did not know of the senator`s attempts to secure a loan for Hourani. Pillsbury said he encouraged the senator to request the ethics panel investigation ”to show there were no improper contacts by me.”
BCCI was shut down last year after regulators around the world accused it of one of the biggest financial frauds in history. Since the shutdown, law-enforcement officials have accused the bank of bribing officials throughout the Third World to attract government deposits to BCCI.
Clark M. Clifford, a former defense secretary, and Altman, his law partner, have been charged with taking bribes from BCCI.