chapter  15
16 Pages

The Genesis of the BCCI Scandal

ByNikos. Passas

Bank of Credit and Commerce International (BCCI) was established in 1972 with capital from the ruler of Abu Dhabi, Sheikh Zayed, and the Bank of America. This chapter examines the social and political (external) as well as BCCI-related (internal) conditions that enabled controllers to prosecute and close down BCCI. It offers an alternative, structural theory of the genesis and development of the BCCI scandal and argues that the most important factor is geopolitical changes that robbed BCCI of its past instrumentality and usefulness to powerful interests and groups. BCCI managers went to trial in Florida, only to be convicted and receive record penalties. The fact that this was the first time an international bank was convicted of money laundering was taken up by the international press and caused substantial injury to BCCI's reputation, loss of business, and lower morale among employees.