Clinton's Bert Lance?
Adams, James Ring
Clinton's Bert Lance? Arkansas banker Jackson Stephens, deeply involved in BCCI, has had access to the last three Presidents, and both candidates in this election owe him big. by James Ring...
...Ever since denouncing McAlary's article as ridiculous, Clinton and his aides have refused to say anything more about one of their principal benefactors...
...I'm all the parties...
...The Wall Street Journal even dismissed it in an article on the Post's savaging of Clinton in the raucous New York primary...
...From the Financial General Bankshares takeover, Saudis and their agents began to show up in force...
...Even in the mid-eighties, these patterns astonished the senior regulators who confronted them...
...Remember Marvin Warner and his Home State Savings Bank of Cincinnati...
...In 1980, he backed the Republican candidate who unseated first-term Arkansas governor Bill Clinton...
...Jack's faction was willing to turn over control to a foreign buyer, even if it meant a hostile ouster of the group then running the bank...
...A Worthen spokesman says the bank parted ways with the Riadys several years later, so that Little Rock had no role in the latest regathering of loose ends...
...These connections may be perfectly legal and even in the best interests of both countries...
...As chairman of the Rose Law Firm in Little Rock, he gave Hillary Clinton the job she still holds...
...At the end of the 1990 campaign, Governor Clinton needed a $50,000 loan for last-minute television "ads...
...Manhattan District Attorney Robert Morgenthau indicted Sheik bin Mahfouz this July for a "scheme to defraud" in connection with his investments in BCCI...
...But he had borrowed heavily to buy it, and a sale at market price would have wiped him out...
...But Jack Stephens was smarter...
...tried to emulate his father's business success in the Oil Patch by setting up a series of drilling partnerships...
...In the months that followed, it emerged that Home State was tied in "a symbiotic relationship" with a fraudulent government securities company in Fort Lauderdale, Florida, which was stuffing the bank's balance sheet with worthless assets...
...Stephens himself held stock as part of an investor group that had split in a bitter quarrel...
...Clinton telegraphed his attitude toward the crisis when he intervened with state regulators on behalf of a failing thrift owner with whom he and Hillary had entered a real estate partnership...
...He's one of us...
...Whatever one makes of this mix of respectability and rogue as an agent for BCCI and its Saudi backers from that bank's first encroachments in America...
...20 The American Spectator October 1992 director of the Office of, Management and Budget as Carter's first cabinet appointment, and during his confirmation he promised to sell his NBG stock by the end of 1977...
...The election of Jimmy Carter redirected this group's energies from regional banking to global finance...
...But Jackson Stephens really came into his own in 1976 with the presidential campaign of Jimmy Carter, his classmate in the U.S...
...Saul and Middendorf responded to the threat with a campaign of their own...
...The apparent proof that Washington is protecting a somewhat sinister crew of political fundraisers has generated disgust with both parties and all incumbents...
...The extreme version of this outlook—that the commercial interests actually control the government—doesn't necessarily follow...
...Thanks to him, the University of Arkansas law professor became a big-time corporate lawyer...
...One, we can get together...
...The SEC piled on, charging that the takeover group was illegally acting in concert...
...But the fascinating details came in the financial history that put George Jr...
...William Middendorf, former secretary of the Navy, and the Washington developer B. Francis Saul spoke for the incumbent managers...
...Jack, shrewdly writing off President Carter in 1980, gave a hand to the Reagan-Bush ticket and grew close to the family of George Bush...
...Several conversations with Bert Lance reinforced his own conviction that he needed a base in the United States, the world's greatest financial power...
...His lawyers managed to convince the government that he acted only as a broker, and he was dropped as a defendant...
...His investment banking house Stephens Inc...
...The sale of Bert Lance's National Bank of Georgia left the Little Rock broker with an unusual partner, a very From here on things get complicated...
...Worthen collected $20 million in insurance on the loss, barely averting insolvency...
...They list names that lead to entirely different scandals too intricate to describe here, except to note that their shadow falls in unexpected ways on the BCCI case...
...It's about access, access for the same vast network...
...A government-securities trading company from Livingston, New Jersey, called Bevill, Bresler & Schulman went bankrupt on Easter Sunday, a month rich Indonesian banker named Mochtar Riady...
...The one now gaining most notoriety put together Saudi money men, elements of the BCCI network, and George W. Bush, eldest son of the President...
...Beyond the economic loss is a political erosion...
...kept their foreign deals going...
...Sometimes they start from totally mundane encounters, and in tracing these connections, it's important to resist the constant temptation of paranoia...
...Jack Stephens backed U.S...
...Born-again Christians, Zionists, and anti-Jewish Saudis work hand-in-glove, pursuing mega-deals from one fly-speck bank haven to another...
...The chain was Financial General Bankshares...
...into a brokerage with almost as much capital as Morgan Stanley & Co...
...Petrodollars of course were eagerly courted by businessmen who could offer political access in turn...
...John Glenn in 1983, of which more later...
...Warner was making a lot of money from the firm, ESM Government Securities, and he and its principals ultimately went to jail...
...The foreign involvements stretch from Abu Dhabi and Jeddah to Hong Kong and Jakarta, and deal extensively with the notorious Bank of Credit and Commerce International (Bcci), the central bank of global corruption...
...Something like Operation Desert Storm had been anticipated, and planned for, for decades...
...Stephens and the Indonesians Although Stephens escaped from the BCCI snare, he continued his foreign entanglements...
...Naval Academy in 1946...
...Representative Tommy Robinson, a populist demagogue who had recently converted to the Republican party, vowing to "take [it] away from the country club elitists and give it to the working people...
...The immediate cause was Bert Lance's need to divest his stock in the National Bank of Georgia...
...18 The American Spectator October 1992 in the superpower that provides its security umbrella...
...Gennifer Flowers was easier to grasp...
...In the late 1970s, George Jr...
...The break was complete when he urged pay raises for the utility's employees, one-third of whom, he said, qualified for food stamps...
...Then in 1984, Riady gave his backing to Mr...
...After losing a run for governor of Georgia in 1974, he took over the National Bank of Georgia in Atlanta and began talking about building a network of Southern regional banks to counter the power of New York's...
...is the most important of those headquartered away from Wall Street...
...The feds eased the Riadys out of Little Rock and ended Worthen's dreams of global expansion...
...Under pressure from a separate shareholders' suit, Worthen sued its director Joseph Giroir to recover $2.1 million in profits the bank said he had made illegally on his side deals with the Riadys...
...But the public should know what's going on...
...The gangly, expansive Mr...
...The one now gaining most notoriety put together Saudi money men, elements of the BCCI network, and George W. Bush, eldest son of the President...
...Giroir still represents Worthen and Jack Stephens...
...of Houston...
...The first meeting took place in August 1990, days after Iraq's invasion of Kuwait, and Othman has drawn stormy criticism from other American Palestinians for his staunch support of the American defense of Kuwait and Saudi Arabia...
...He called the president of Stephens Inc., who by now was Warren A. Stephens, the son of Mr...
...The two first joined hands in a Hong Kong brokerage...
...He cut loose from the project in 1978 as soon as the SEC filed its suit...
...Jack Stephens found himself dealing with banks from Pakistan to Indonesia...
...Orval Faubus, Arkansas' segregationist governor in the fifties and sixties, remembered the two as the state's "most powerful single political force," and by the mid-seventies they had built an extensive network of regional banking contacts...
...Steven Emerson documented this gold rush in his 1985 book The American House of Saud (Franklin Watts), which is still must reading among BCCI investigators...
...Jack Stephens is a straight arrow," said Roberts...
...he said...
...The national press covered the primary as a comic opera whose moral was the pervasive influence of the Stephens family...
...During the meeting, Stephens brought up another proposition...
...In a busy first quarter of 1984, Stephens and Riady pumped capital into a statewide chain called First Arkansas Bankcorp, merged with another group of banks owned by C. Joseph Giroir, Jr., and renamed it Worthen Banking Corporation...
...When the New York Post first broke the story about Jackson Stephens, Clinton was in New Hampshire, blaming that state's recession on overzealous bank regulators...
...When bank and S&L owners start pulling political strings to muzzle their regulators, the public will ultimately pay a very high price...
...In October 1990 he revealed in an SEC filing that he had bought a 9.6 percent stake in Jack Stephens's Worthen Banking Corporation, the same percentage as the holding relinquished earlier by Mochtar Riady...
...Witt" borrowed $15,000 to set up a brokerage in Little Rock and toured back-country banks like a traveling salesman with a satchel full of municipal bonds...
...I am the reform party," says the boss...
...utility...
...Ironically, Mr...
...Jackson Stephens The district attorney's leak about Clinton was almost certainly prompted by a New York Times series on the candi...
...As Twersky of the Forward first reported, Othman not only sat on Harken's board, he attended three White House meetings with President Bush as part of a small group of Arab-Americans close to former chief of staff John Sununu...
...Although a severe snowstorm kept Dr...
...The Stephens family fortune began with Jack's brother Wilton R., ,his elder by sixteen years, who left the family cotton farm in the late twenties to sell Bibles and belt buckles...
...22 The American Spectator October 1992 Stephens and Bush Even after the sharp contraction of Worthen Bank's ambitions, Jack Stephens and Stephens Inc...
...Lance later devoted a lot of energy to denying he said these words, but they were recorded in a memo dictated by Saul and confirmed by Middendorf immediately after the meeting...
...He did it, too, and it cost the taxpayers several hundred billion...
...Political influence is a means for such eminent people to gain an edge for their clients...
...He cultivated the Alabama-born Democratic fundraiser Marvin Warner, who was force-feeding Cincinnati's Home State Savings Bank into a cash cow...
...Clinton] was somewhat in a panic," Warren recalled...
...Abedi quickly put together a group of Arab friends as his front men, including the just-retired head of Saudi intelligence, Kamal Adham...
...The Arkansas bankers talked of exporting rice to Asia and predicted that their twobillion-dollar bank would quickly grow to ten billion...
...in this position...
...The American Spectator October 1992 19 Witt played the colorful Southern banker, while the taciturn, bespectacled Mr...
...Once again, however, Jack Stephens persuaded the government that he was an innocent party...
...Jack backed Rep...
...I71 • • • Postscript: Although Jackson Stephens and Stephens Inc...
...In 1933, "Mr...
...Hammer himself from attending, representatives from the FGB board factions met for lunch in the Washington office of Occidental Petroleum on February 7, 1978...
...What do these networks mean for the candidates...
...The career of Jack Stephens shows that the game isn't about ideology or party politics...
...banking laws forced the Swiss bank to sell its holdings, and Stephens found another buyer...
...Jack pinched pennies in the back room...
...U.S...
...But state and federal bank regulators had rebuffed his earlier attempts to buy a bank outright...
...After the meal, Lance called Saul aside for a private chat...
...The tragic downfall of Clark Clifford was underway...
...after the ESM collapse and the Home State crisis, leaving Worthen with $52 million in uncollectible loans...
...Jack was becoming known as a national Democratic fundraiser, however, he threw in his lot with the Republican party...
...He has had unbroken access to the White House from Jimmy Carter to George Bush...
...My calls to the Clinton campaign were not returned...
...When the candidates need money, they turn to the same faces, and the networks flourish across party lines...
...The Stephens family and friends raised more than $100,000 in crucial early money...
...At this level, political, national, and religious differences melt away...
...Consider Stephens's fund-raising for Sen...
...According to depositions filed in a subsequent federal suit, Stephens had fallen out with the bank's president after the latter refused to meet with salesmen from the bank data–processing firm Systematics, Inc., owned by the Stephens brothers...
...Called Arbusto '78, Arbusto '79, and so forth, they attracted capital from, among others, a Houston aircraft broker and financial manager named James Bath, who according to a former associate had acted as liaison between Saudi businessmen and the Central Intelligence Agency in 1976, the year in which George Bush, the elder, served as director of central intelligence...
...The Federal Election Commission reports for Glenn's 1983 presidential campaign list as contributors the full range of the Stephens family, executives from Stephens Inc., and employees of the Stephens utilities...
...Jack obtained a $25 million cash infusion for Harken from Union Bank of Switzerland, which rarely invested in small American companies...
...Eyebrows were raised when this small and untried company landed a "potentially lucrative" offshore drilling contract with the Persian Gulf princedom of Bahrain...
...have a policy of not granting interviews to the press, the distinguished conservative economist Paul Craig Roberts called this writer out of the blue with a ringing endorsement of Mr...
...Stephens's name rings a loud gong with anyone who has investigated the career of BCCI in the United States...
...The occasion was a peace meeting brokered by none other than Armand Hammer, chairman of Occidental Petroleum...
...Witt sunk his profits into natural gas and hired Jack to manage his businesses...
...His business is based on his entrepreneurial skills...
...But Stephens offered Riady an even better deal...
...On the other hand, repeated scandals over the past seven years have revealed that their operations are far from benign...
...When federal S&L regulators seized FirstSouth in 1984, the story in Washington goes, members of the Arkansas delegation wrote letters of protest to the Federal Home Loan Bank Board...
...David Pryor announced that because of the regulators' crackdown in Arkansas and Texas, he would hold up the bill to bail out their deposit insurance fund...
...Warren and some friends placed their names behind the loan, helping Clinton to win re-election to the statehouse yet again...
...Although Jackson Stephens has escaped the network's criminal entanglements, he clearly deserves the scrutiny the press has so far failed to provide...
...At some point in the campaign, perhaps the press will look at the case of the FirstSouth S&L of Pine Bluff, Arkansas, the first thrift failure to exceed a billion dollars...
...dates' campaign finances...
...The Saudis and their Middle Eastern allies tapped into a network of American bankers, businessmen, politicians, power brokers, and financial frauds, who flowered under Jimmy Carter but have had access to the White House ever since...
...The "elitist" Republican candidate was a prominent Little Rock lawyer named Sheffield Nelson, who had previously run the public utility owned by the Stephens family...
...In March 1985, Home State collapsed, in a precursor of the savings and loan crisis...
...These GOP loyalties, however, didn't prevent the entire Stephens clan and its business associates from raising some $75,000 for the Democratic presidential primary campaign of Sen...
...The BCCI case dramatized a new element in "these "connections...
...Securities fraud has been so rife that the "bond daddies" of Little Rock, the fly-by-night salesmen of worth-less issues, have gained national notoriety...
...As the municipal bond market recovered in the New Deal, doubling and tripling the value of discounted bonds, Mr...
...Lance developed ties with—and took large loans from—Jake and C. H. Butcher, who were developing parallel bank chains in Tennessee and Kentucky...
...His family has dominated the politics and economy of Bill Clinton's Arkansas for nearly fifty years...
...Or, three, we can take you over...
...Within days, Washington papers began to blare about a, hostile takeover of the town's largest bank, launched by a sinister group of Arabs...
...Thanks to Lance's goodol'-boy bluntness, the meeting was a disaster...
...The BCCI officer running the show in Washington was a Pakistaninamed Abdus Sarni...
...The Seamless Web What does all this intricate weaving signify...
...He has been mentioned as a possible senior financial appointee in a Clinton administration, even as secretary of the treasury...
...John Glenn, mentioned earlier...
...When a District Court judge sided with the SEC, the handwriting was on the wall...
...Clifford and his young partner Robert Altman had represented Lance during his Senate troubles...
...But Harken itself needed help, and George Jr...
...Jack Stephens hadn't yet built up his own Worthen National Bank, but he was a player in this group...
...Even after the sharp contraction of Worthen Bank's ambitions, Jack Stephens and Stephens Inc...
...The NBG purchase offered Abedi a roundabout (and illegal) way to gain his American foothold through the front men he represented as "financial adviser...
...According to a 1976 Forbes profile, he held stock in Bankers Trust, Mercantile Texas, and Lance's own National Bank of Georgia...
...Jack the day this issue went to press...
...Lance had become the Whatever one makes of this mix of respectability and rogue banking, Bill Clinton now offers it another avenue to political power...
...The Stephens family's contributions to Clinton, said Roberts, reflected the realities of doing business in Arkansas, not ideology...
...Arkansas has had one of the highest rates of thrift failures in the country...
...Networks flourish in business as in all other human endeavors...
...In it, Sen...
...As regulators caught on to the sophisticated fraud, they discovered that—lo and behold—the same thing was happening at Jack Stephens's Worthen Bank and Trust...
...But the partings were friendly...
...Stephens's bank and his personal lawyer, the former banking, Bill Clinton now offers it another avenue to political power...
...But no major paper followed up on the story...
...as one exclaimed to me, "It's the damnedest thing I've ever seen in my life...
...George Jr...
...George W. Bush has given conflicting statements about Bath's investment in Arbusto, finally admitting to the Wall Street Journal that he was aware that Bath represented Saudi investors...
...Robinson, suggested the Wall Street Journal, "in a straight-out business deal" to install a governor friendly to Stephens Inc.'s far-flung business deals...
...itself called for a crackdown, fearing an erosion of its own reputation...
...Jack was still a $100,000 donor to the national Republican party, but his network had already begun to fall in with Clinton's campaign...
...On the eve of the triumphant Democratic national convention, Clinton's campaign owed $4 million, much of it to Worthen...
...Jack's other business ties, especially with T. Bertram Lance...
...Abedi also hired Bert Lance to act for BCCI in the deal...
...In his decade in office in Arkansas, Governor Clinton has appointed every member now in place on every state regulatory panel, and his attitude toward the protection of the public should be apparent from the results...
...This prophecy came true, as Nelson beat Robinson and then lost narrowly to Clinton...
...But the federal regulators went through its books with heightened diligence...
...It was a good thing he did: Clinton made a comeback in 1982 and stayed in the Governor's mansion for the rest of the decade...
...He doesn't remember the details of the lawsuit, he said recently, but "whatever it was, it was settled amicably...
...The deal, first reported by David Twersky of the Forward and then covered in some depth by the Wall Street Journal, provided financing for the Harken Energy Corp...
...Jack's party-building took a bizarre turn in 1990, when the Arkansas GOP nearly tore itself apart in selecting a challenger to Governor Clinton...
...Jack became reacquainted with Carter through a mutual friend, the candidate's political guru T. Bertram Lance...
...How about buying not only a bank but a whole bank chain, with branches in New York and headquarters in Washington...
...Then the deal blew up in everyone's face...
...Anderson died in disgrace a few years ago after pleading guilty to federal charges of tax evasion and money laundering...
...Two, we can buy out...
...According to a memo circulated in...
...He entered the bidding for Lance's bank in 1977 through the intercession of an international broker named Robert B. Anderson, who had been secretary of the Treasury under President Eisenhower...
...But Mr...
...Witt, no longer active, died in December 1991 at the age of 84...
...Jack Stephens has done wonderful things for the cause of liberty," Roberts said...
...Two years later Saul and Middendorf dropped their opposition, Clifford reassured the regulators and Abedi installed him as chairman of the institution, renamed First American Bankshares...
...he permanence of T these networks ironically bears out the populist vision of politics to which Clinton sometimes claims to adhere...
...Jack demurred, in a remarkable statement that deserves more exegesis: "It would be awfully easy for Stephens [Inc.], if we wanted to be close to a governor, tobe close to Bill Clinton...
...Why did the watchdog press so quickly lose interest...
...Bert Lance had big ambitions even before he helped put Jimmy Carter in the White House...
...Behind the diversions of party politics stand the real powers, the financial interests whose main concern is to maintain their access to government and the economic advantages it can confer...
...Roberts, an undersecretary of the treasury in the Reagan Administration and a former columnist for the Wall Street Journal, insisted that Stephens was and is a Reaganite...
...Remember Joe Giroir's name...
...Partners in its dealings have included ambassadors, party fundraisers, Washington super-lawyers, and the occasional former treasury secretary...
...The Jeddah-based real estate mogul did business with some of the kingdom's most prominent private figures, such as former Oil Minister Ahmed Zaki Yamani and current Oil Minister Hisham Nazer...
...His family has dominated the politics and economy of Bill Clinton's Arkansas for nearly fifty years...
...The savings and loan scandals, the banking crisis, the case of BCCI itself have cost the ordinary citizen billions in lost deposits and squandered tax money, and have ultimately caused a prolonged recession...
...It came directly from a sterling source, the office of Manhattan District Attorney Robert --,, t„k - Morgenthau, a distinguished Democrat...
...Many saw it as no coincidence that George W. Bush, often called George, Jr., sat on the board of Harken with a consulting contract worth as much as $120,000 a year...
...At times Agha Hasan Abedi seemed fated to draw every controversial figure in the world into his orbit...
...by James Ring Adams ike McAlary, the New York Post's specialist on organized crime, M scored a genuine scoop last February: "Clinton and BCCI candidate's money man linked to scandal bank," the headline ran...
...for making "excessive loans at preferential terms" to companies controlled by the Stephens brothers and Mochtar Riady...
...By the end of the summer, the comptroller of the currency had cited Worthen Banking Corp...
...Although ambiguity still surrounds the case of BCCI, the savings and loan disaster offers blatant examples of political protection for outright criminals...
...Lance takes credit for introducing Clifford to BCCI) Sami also warned Abedi that each shareholder had to keep his stake below five percent, lest he trigger SEC requirements for public disclosure...
...West became Carter's ambassador to Saudi Arabia...
...Through the fall of 1977, and Lance's own fall from his position at OMB (he resigned in September under pressure from the Senate), Stephens negotiated directly with Bccr s founder and maximum leader Agha Hasan Abedi...
...Abedi eased Lance out and let Clifford smooth over the conflict...
...Lance's own NBG, the network included Bankers Trust of South Carolina, which was associated with Governor John West...
...The would-be rescuer was Mochtar Riady's Lippo Group...
...The new man was a Saudi named Abdullah Taha Bakhsh...
...Yet Stephens was always considered either an innocent bystander or a victim...
...Ethnically Chinese but well connected to the highest levels of Indonesian politics, Riady started his career in a Jakarta bicycle shop and built up a financial empire called the Lippo Group...
...Remarkably, at one point Bevill, Bresler and ESM had overlapping personnel...
...They list Marvin Warner and his family and the principals The American Spectator October 1992 23 of ESM Government Securities, many of whom wound up as convicts or suicides...
...He has been mentioned as a possible senior financial appointee in a Clinton administration, even as secretary of the treasury...
...In spite of his absentee position in Harken, Abdullah Bakhsh continued his American investments...
...Warner later dated Carter's powerful personal secretary Susan Clough and was appointed ambassador to Switzerland...
...Giroir left the board and ultimately resigned from the Rose Law Firm...
...We can do three things," he continued...
...they warned—presciently, it turned out—about his lack of backing by a strong central bank...
...Its main figures are known as upright patriots...
...But new developments make this "October Surprise" unlikely...
...Puzzled, he asks the boss, who controlled the disgraced incumbent and his establishment party, how he can deliver the reform party nomination...
...JRA 24 The American Spectator October 1992...
...In January 1992, the Stephens-controlled Worthen National Bank of Arkansas granted the campaign a $2 million line of credit...
...The Arbusto partnerships were busts as money-makers, but the investors managed to recoup their stakes through several stock swaps that wound up giving them shares in Harken Energy...
...Just as Mr...
...If you bring together all members of our group, we've already acquired twenty percent of the bank's common stock and intend to take control," he said...
...Links forged over two decades between American politics and Saudi business interests may even help Ve explain American policy toward the Middle East, including the mid-eighties tilt toward Iraq and its absolutely necessary correction in Desert Storm...
...Riady sent his son James to Little Rock as president of the national bank subsidiary Worthen Bank and Trust and started to buy out Joe Giroir's shares...
...They like to take complete control...
...With attention to detail, shrewd investments, and a lot of oil and gas wells, the two built Stephens Inc...
...While Lance ran into a hot, humid summer of trouble over his other bank deals, Stephens tried to broker an NBG sale at favorable terms...
...Nelson recalls that he had first antagonized the Stephens brothers by resisting their attempt to raise the price of the natural gas their wells supplied to their...
...Bath's associate also disclosed in the course of a bitter legal fight that Bath managed millions of dollars of Houston investments for Sheik Khalid bin Mahfouz, the most important commercial banker in Saudi Arabia and for a time one of the largest shareholders in BCCI...
...BCCI always wants control...
...Some have received substantial prison sentences, and these were just for domestic misdeeds...
...Through the 1980s, by his own testimony, Jack Stephens devoted himself to building the Republican party in Arkansas...
...by the end of January 1978 he reported to Abedi that he had hired a prominent Washington attorney to help with takeover suits and filings with the regulators...
...Then another disaster struck...
...Although this web seems devoted both to personal enrichment and political influence, it would be paranoid to call it a criminal conspiracy...
...In their turn, the Saudis had an overwhelming strategic need to buy influence in Washington...
...access is all these people really need, and the occasional high-level intervention to protect their interests...
...But neither party may want the public to hear much about them...
...Perhaps -that is why the Clinton campaign is so sensitive on the subject of Jack Stephens and his friends...
...Abedi's agents quickly snapped up the available stock from Stephens's faction and in mid-December commissioned Stephens to buy more on the open market...
...Stephens, Lance, and BCCI The relations between the Stephenses and Clinton give a sharp insight into Arkansas politics, but they become truly notable because of Mr...
...What are you going to do if they can cut your balls off every day...
...Quite possibly it was because McAlary had been handed a can of worms too tangled for most reporters to follow...
...Everyone in business tries to influence the government at one point or another...
...All the strands so neatly tied into Bert Lance's dream of a Southern network of regional banks begin to fray and snap into one tangled financial failure after another...
...It involved large-scale Arab influence on American politicians of both parties...
...One of the principals in the FirstSouth disaster, by the way, was C. Joseph Giroir, Hillary Clinton's employer...
...In all his dealings, his personal prestige has remained unchallenged...
...He also cultivated the political friends who gave his firm first crack at underwriting their public financing...
...The phenomenon of H. Ross Perot had less to do with the virtues of Perot than with the failings of everyone else...
...Stephens, in fact, belongs to the handful of notables who are always just off-stage in national politics: less Washingtonian than Clark Clifford and less publicized than Robert Strauss but nonetheless big players in their league...
...He was one of the crucial figures in opening American banking to Agha Hasan Abedi, the mystical Pakistani founder of BCCI...
...Lance repeated his message to the entire gathering...
...More was involved than the understandable Saudi attempt to buy influence James Ring Adams is the co-author of A Full-Service Bank: How BCCI Stole Billions Around the World (Pocket Books) and author of The Big Fix: Inside the S&L Scandal (Wiley...
...UBS, coincidentally, held the minority interest in the Bcci subsidiary in Geneva, the Banque de Commerce et de Placements, and you can spin threads from that web for as long as you like...
...Neither Jack Stephens nor his friend Joe Giroir have been indicted for any of their institutions' misadventures, but it's fair to say that their record makes federal regulators very nervous...
...The bidders included a business friend of the Butchers, an Indonesian banker, and a Saudi businessman named Ghaith Pharaon, indicted last year as a front man for the BCCI...
...Even more unnerving to those who guard the public purse is the company Stephens keeps, powerful company like Clark Clifford and Robert Strauss, who have had the run of Washington for decades...
...This practice, charged the comptroller, amounted to a violation of federal law...
...The situation got so out of hand that Stephens Inc...
...It's like the scene in the Preston Sturges movie The Great McGinty, in which McGinty, formerly a homeless bum who distinguished himself by voting thirty-five times in one election, finds himself being groomed by the city's political boss as the mayoral candidate of the reform party...
...kept their foreign deals going...
...After it became clear that criminal fraud was involved, the Arkansas congressmen wrote a second set of letters, asking to get the first ones back...
...attended a meeting in Little Rock between Harken officials and Jackson Stephens that pro-duced an unusual rescue plan...
...So every time purchases for one of the Arab front men reached 4.9 percent of the total shares, his account abruptly closed, and further buying went on in the name of the next one in line...
...Some pundits speculated privately that the mainstream press held back because the story had been leaked prematurely, that the political insiders who normally spoonfeed such material mond to Bigfoot journalists were holding it in reserve for the fall campaign...
...They list in-laws of Jake Butcher, Lance's multi-million dollar creditor, whose banking empire had collapsed earlier that year...
...gave it a boost in finding new financing through Stephens Inc...
...The lawyer was Clark Clifford...
...One of these letters has come to light...
...The story points to Bill Clinton's camp surely enough, but it also leads straight to President Bush's family...
...The agent for the BCCI-backed challenge was Bert Lance...
...The FGB filed The American Spectator October 1992 21 suit against Lance, Kamal Adham and his group, and Jackson Stephens...
...Ohio declared its first bank holiday since the Great Depression...
...When BCCI was closed around the world last year, setting off riots at its Hong Kong branch, a buyer stepped forward, offering a highly favorable deal for the Bank of Credit and Commerce Hong Kong Ltd...
...Without appreciating the significance of the news, Jeff Gerth reported that Clinton had received about $100,000 in contributions from associates of the Little Rock financier Jackson Stephens and a $2 million line of credit from the Worthen Bank of Little Rock, which Stephens substantially controlled...
...Bluntly, it is appalling...
...By February the Arab bloc, combined with Stephens's holdings, in effect controlled the bank...
...He doesn't need any scandal or crookedness to make money...
...But the question is how much the private interests are asking and how far the men in office are willing to accommodate them...
...Abedi himself flew to Little Rock in November to consummate the deal...
...The Pakistani banker had launched BCCI in 1972 with the intention of making it the first global bank based in the Third World...
...Yet their friends, and friends of their friends, share a startling propensity for financial scandal...
...Jack's most ambitious venture, an attempt to turn a chain of home-town Arkansas banks into a world-class financial player...
...But the real powerhouse was the Texas Mercantile Corporation, holding company for the politically plugged-in Mercantile Bank of Dallas...
...The force behind the FGB takeover, Lance announced, was the Bank of Credit and Commerce International...
...Although Bakhsh picked Up 17.6 percent of Harken's shares, he delegated his role in the company to a Palestinian from Chicago named Talat Othman...
...Witt, however, continued to support the ambitious young Clinton...
...It's ironic that Bill Clinton stands to reap the ultimate benefit from this disillusionment, for his campaign has been deeply indebted to a figure who stands as close to this permanent network as anyone still active in American finance, and who has actedemployer of Hillary Clinton, were separately involved in the local versions of two of the largest financial scandals of the 1980s...
Vol. 25 • October 1992 • No. 10
