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Subject: Clifford Aided BCCI, N.Y. Prosecutors Say; Court Filing Alleges Active Role in
Date: Sat, 31 Oct 92 08:47:18 EST
Message-ID: <42.1992Oct31.084718@AmeriCast.com>

Clifford Aided BCCI, N.Y. Prosecutors Say; Court Filing Alleges
Active Role in Fraud<By Sharon Walsh=Washington Post Staff Writ-
er=

 New York prosecutors said yesterday that they have an unidenti-
fied witness who will testify that it was Clark M. Clifford's own
idea that BCCI use front men in 1977 to purchase what is now
First American Bankshares Inc. - contrary to the former defense
secretary's long-standing claim that he was duped by BCCI.

 The  disclosure was included in court papers that opposed
Clifford's request on Monday that the state charges - that Clif-
ford misled banking regulators - be dropped because he is too ill
to stand trial. Clifford's attorneys denied that he ever suggest-
ed using front men.

 "Clifford's motion (for dismissal) must be denied," New York
District Attorney Robert M. Morgenthau's office said. "The crimes
of which Clifford stands accused encompass nearly  15 years of
manipulation and deceit ... of fraud on bank regulators, deceit
of his law partners and receipt of millions of dollars at the ex-
pense of the victims of the largest bank fraud in history."

 The lengthy court filing said more than was previously known
about the prosecution's case against the 85-year-old Clifford.
State and federal prosecutors charged in July that Clifford and
his law partner, Robert A. Altman, deceived banking regulators
when they told them that the Bank of Credit and Commerce Interna-
tional would have nothing to do with the ownership or control of
Washington-based First American.

 But the prosecutors had never before said that Clifford himself
authored the conspiracy by proposing using agents to skirt
federal banking regulations.  Clifford has said for the last year
that he was "duped" by the foreign owners, and did not know that
they were nominee shareholders who were buying the bank for BCCI
and with BCCI's money.

 "Clifford suggested that (BCCI) use the names of wealthy allies
as nominees to purchase (First American), rather than having BCCI
itself openly purchase the bank," the filing said. It later said
there is "a witness who will testify" to that.

 "Any witness who said that would not be telling the truth," said
Carl S. Rauh, Clifford's Washington attorney. "Mr. Clifford
adamantly denies this."

 Another of Clifford's attorneys warned that the issue of a wit-
ness - whom prosecutors declined to identify - may never be set-
tled because Clifford's poor health will prevent a trial.

 "We may never have the opportunity to test whether they have a
witness," said Charles A. Stillman, Clifford's New York attorney.
"The notion that Clifford will be able to have his day in court
is foolish" because of his heart condition, Stillman said.

 New York Supreme Court Justice John Bradley will decide whether
to dismiss the charges. The prosecutors suggested that Clifford
should at most be entitled to a postponement of his trial to al-
low further medical examinations and possibly heart surgery. A
hearing is scheduled for Nov. 16.

 Both Clifford and Altman have pleaded not guilty to the state
and federal charges against them.

 BCCI, which collapsed last year, was at the center of a global
financial scandal and has pleaded guilty to illegally owning
First American.

 The key issue in this country concerning BCCI is how the
London-based and Arab-owned bank came to illegally own First
American and three other U.S. banks after regulators rejected its
early attempts, including the one in 1977, to purchase banks here
because it was virtually unregulated.

 Because of those rejections, Clifford assured regulators in 1980
that BCCI would have no role in the management or ownership of
what was then Financial General Bankshares and later was renamed
First American.

 But the court filing yesterday said that when Clifford gave
those assurances, he knew they were untrue and they in fact began
the pattern that Clifford and Altman maintained over more than a
decade of taking their orders concerning First American, which
they headed, directly from BCCI's founder, Aga Hasan Abedi, and
its president, Swaleh Naqvi. In return, according to yesterday's
filings and the earlier indictments, Clifford and Altman received
millions of dollars in bribes in the form of legal fees and stock
profits.  The court papers outlined the seriousness of the
charges because under New York law that must be considered by the
judge in deciding whether to dismiss them.

 Clifford's motion said that there were no depositors who were
harmed because of BCCI's illegal ownership of the bank, and cites
Clifford's long reputation for probity and public service as ad-
ditional reasons the charges should be dropped.

 Prosecutors argued that it was Clifford's towering reputation
that was essential to his ability to commit the crimes he is
charged with.

 The prosecutors called the defense motion that the charges be
dropped "forum shopping" and an effort to "manipulate the system"
so that Clifford would face what some see as weaker charges in
the federal case in Washington.

However, Clifford's personal physicians and three independent
doctors have said that Clifford's heart disease is so serious
that the stress of a trial could kill him, regardless of the ve-
nue.

The papers filed yesterday by Assistant District Attorney John W.
Moscow suggest that if the judge decides that Clifford is not
able to undergo a trial on Jan. 4 as scheduled, the best that he
would be entitled to is severance, or separation of his trial
from that of Altman and a postponement until his medical condi-
tion could be reevaluated.

 In that case, the filing said, Clifford could undergo heart
bypass surgery and then be fit to stand trial.  Clifford's
lawyers and friends have said that because of other health prob-
lems, Clifford fears he would not survive heart surgery.

"This is an effort to avoid doing simple justice. Severing the
trial would leave this sword of Damocles hanging over Mr. Clif-
ford for the rest of his life," Stillman said. <02:34 10-31

Copyright 1992, The Washington Post.  This story is from the
Washington Post's Capitol Edition On-Line and is not to be ar-
chived or redistributed.

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