BCCI Scandal Spawns Wild Rumors, Limited Evidence

With its seizure around the world, the Bank of Credit & Commerce International became a catchall for wild allegations. More surprises are almost a certainty in this far-reaching scandal, but here is a sampling of charges for which facts seem in short supply so far:

* In a sensational cover story on July 29, Time magazine said BCCI maintained a 1,500-member “black network” that used bribery, extortion, kidnaping and murder to further the bank’s goals. A criminal investigator on the case says no reliable evidence has yet been found to support the allegation.

* Several stories have reported that BCCI financed Pakistan’s nuclear weapons program, but to date the only link is a minor one. A Pakistani-born Canadian was convicted in Philadelphia of trying to buy super-strong steel for Pakistan in 1987. He had planned to finance the transaction with a letter of credit from BCCI. However, the letter of credit expired even before the deal was interrupted by federal agents.

* Persistent rumors have circulated that BCCI used First American Bank in Washington to curry favor with politicians through sweetheart loans. Supposedly, the Federal Reserve has a list of politicians who got favorable deals of one sort or another from the bank. Federal Reserve officials have denied any knowledge of the list and, to date, there has been no evidence of such loans.

* When he died in West Virginia in August, free-lance reporter Danny Casolaro was reportedly investigating a mega-conspiracy involving BCCI, the Iran-Contra affair and the allegation that release of U.S. hostages in Iran was delayed to aid the 1980 election of Ronald Reagan as President. Authorities have ruled the death a suicide, but his family and others persist in calls for a full-scale inquiry. Accusations that a free-lance reporter for the Financial Times of London was murdered in Guatemala while working on a story about BCCI also have gone unsubstantiated.