Mugabe named in BCCI scandal -- report says he accepted money in return for favours

It had to come out one day. President Mugabe, who has almost been untouchable in the past 12 years, maintaining a seemingly clean slate with even some of his lieutenants likening him to Jesus Christ, may not be that clean after all.

He has been named as one of the Third World leaders who accepted money in return for favours from the now defunct Bank of Credit and Commerce International (BCCI), which had one of its branches in this country. The amount he allegedly received is not mentioned.

President Mugabe's name was mentioned in the respected British weekly newspaper, The Observer, which is owned by Lonrho chief executive Tiny Rowland, a long time friend of almost all the political leaders of this country.

Ironically, the story was published on October 4, when President Mugabe and Tiny Rowland, were both in Rome trying to broker the signing of the Mozambican ceasefire agreement which Renamo leader Afonso Dlakama appeared to be backing out of.

The story must obviously have had clearance from Rowland because last time The Observer wrote a controversial story about the atrocities committed by Five Brigade in Matebeleland, Rowland personally took up the issue with his editor and apologised to the Zimbabwean government after the editor refused to retract the story.

The Observer correspondent, the late Godwin Matatu, also at one time, had his press card withdrawn by the then Minister of Information Nathan Shamuyarira because of his anti-government stories but he defied this and continued to file.

Efforts to establish whether there was any retraction to The Observer story have so far been unsuccessful. In previous cases the retraction was within a week. Early this year The Observer carried a story by Julie Flint about Malawi and the following week, Malawi's virtual ruler John Tembo was given space to react to Flint's story.

President Mugabe's name is allegedly mentioned in a 794-page report by a United States Congressional subcommittee which investigated the US$20 billion collapse of the fraud-ridden Bank of Credit and Commerce International.

The Insider has been tracking the story for almost nine months following a tip-off that the head of American operations of BCCI, Abdur Sakhia, had alleged that the bank had given gifts and loans to former United States President Jimmy Carter and one-time presidential candidate Gary Hart.

The report also said payments were also made to Indira Gandhi's family, relatives of Pakistan's General Zia and "leading Zimbabwean politicians." The aim was to "develop relationships with everyone of consequence" and the gifts were "to buy influence."

After writing to the US in April The Insider was sent a congressional report which centred on the banking system in the United States. It was in this report that The Insider learnt that the right person to approach was senator John F Kerry who headed another subcommittee investigating BCCI. The Insider wrote to Senator Kerry in July and one of his aides phoned to confirm that The Insider will be sent a copy of the report which it has not yet received.

According to The Observer, even Senator Kerry admits that BCCI's operations could not be fully exposed in one report. "The scope and variety of BCCI's criminality, and the issues raised by that criminality, are immense and beyond the scope of any single investigation or report," he says. "BCCI had relationships that ranged from the questionable to the improper, to the fully corrupt with officials from all over the world."

The CIA even had an account with BCCI when it knew as early as 1985 that the bank was breaking the law.

Britain's former Prime Minister Lord Callaghan also accepted gifts from BCCI and so did President Alan Garcia of Peru and General Noriega of Panama.

Even the Bank of England comes in for some flak over its handling of BCCI whose operational headquarters was in England. The bank is reported to have withheld information about BCCI's frauds from public knowledge for 15 months before closing it.

Senator Kerry says form April 1990, the Bank of England, BCCI's British auditors (Price Waterhouse) and the bank's Abu Dabi owners "had become BCCI's partners, not in crime, but in cover up." He says the three agreed upon a plan in which they would each keep the true state of affairs at BCCI secret in return for cooperation with one another in trying to restructure the bank to avoid a catastrophic multi-million dollar collapse.

BCCI also provided sexual favours to some of its influential clients including girls below puberty, virgins, prostitutes and even young males for those known to have homosexual preferences.

In Africa, BCCI is reported to have exerted influence on the African Development Bank (ADB) by paying its top officials to make deposits with the bank. The ADB had deposited US$26 million with BCCI when the bank was closed in July last year. It also made payments to the government and other senior executives of the Central Bank of Nigeria and the chairman of the Nigerian National Supply company.

BCCI is also alleged to have helped Senegal, Zambia and Nigeria to evade fiscal restraints placed upon them by the World Bank and IMF.

It is reported to have transferred some money from its London branch in 1986 and 1987 to help Senegal deceive the IMF about the levels of its cash reserves.

It also reportedly arranged a US$45 million loan from its Paris branch for Zambia, which urgently needed to make a US$35 million repayment to the World Bank. Reports say that although the World Bank had insisted that repayments could not be made from the proceeds of new loans, it accepted Zambia's payment and granted it a new loan of US$60 million.

BCCI is also alleged to have paid off officials in Cameroon, Congo, Cote d'Ivoire, Morocco, Tunisia and Ecowas (the Economic Community of West African States).

There have also been reports that hundreds of African politicians, including Zimbabweans, lost their money in secret foreign accounts with BCCI. Under Zimbabwe's strict foreign currency regulations it is illegal for anyone to bank money outside the money. Those who lost their deposits with BCCI could therefore not seek any compensation openly as this would have exposed them to the law authorities who should have rightly arrested them for violating the country's exchange regulations.

The only Zimbabwean organisation so far to have admitted losing money to BCCI is the former Rhodesia Railways which was jointly owned by Zimbabwe, Zambia and Botswana.

The unified railway had been banking its money with National Westminster Bank but it transferred 32 million pounds sterling (about Z$280 million at today's rates) to BCCI in 1985. It also deposited a further US$43.5 million (about Z$220 million at today's rates) in 1989 following the sale of company assets when Botswana broke away from the unified system.

Transport and Energy Minister Dennis Norman says the best Rhodesia Railways can hope to get back is only 30 percent of the money deposited with BCCI.

BCCI opened its branch in Zimbabwe then known as the Bank of Credit and Commerce of Zimbabwe (BCCZ) in October 1980. The bank almost operated along the same lines as its parent company giving loans to politicians or people referred to it by politicians.

There were also claims that it favoured Asian businessmen and was almost exclusively their bank.

Reports say it only changed its stance after the BCCI scandal when it was renamed the Commercial Bank of Zimbabwe and tried to shed off the image of being the Bank of Crooks and Criminals international.

*Editor note:  We later obtained the Senate Report on BCCI and it names several top Zimbabwean politicians. We will publish it on Friday after tomorrow’s instalment which names more senior politicians.

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