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Bush hoping two big bank scandals are kept in the closet

Published Oct. 12, 2005

Perk up people, because things are getting downright bloody around here.

No, I'm not talking about this week's political debates. They were down in the mud and messy, but not bloody, at least not yet. What I'm talking about are two scandals the Bush administration hopes to keep in a deep, dark closet until after the election.

If you've been reading the newspaper lately you know the scandals involve two foreign-owned banks _ the Banca Nazionale del Lavoro, or BNL, and BCCI, the Bank of Commerce and Credit International.

One of them, BNL, funneled billions of dollars from the United States to Iraq in a series of bogus loan deals. Saddam Hussein then took the money and bought many of the guns and tanks his army used against us in the gulf war.

The other bank, BCCI, laundered Colombian drug cartel money, financed international terrorism and, oh yes, helped the Reagan administration sell weapons to Iran and outfit the Contra rebels in Nicaragua.

This last bit of business is the scandal-within-a-scandal known as Iran-Contra, and evidence is starting to come out that President Bush may have been in on it from the start.

But for now anyway, the BNL scandal is the one on the front burner. This is because the Bush administration's incredible generosity toward Iraq before last year's gulf war _ sometimes called "Iraqgate" _ is a hot topic for Democrats hoping to nail the president with a foreign policy debacle between now and Nov. 3.

Conceivably, we could be looking at a situation where administration officials are accused of circumventing U.S. banking laws to give Iraq money they knew was being used to buy weapons. Then, when the enormity of the blunder became clear, they tried to cover up evidence of their involvement.

Judging by the shooting match that broke out this week among Bush's Justice Department, FBI and CIA, whatever it is the administration is trying to hide about the BNL scandal must be pretty hot stuff.

In case you haven't heard, the Justice Department and CIA are accusing each other of covering up or holding back evidence in the case, and the FBI has been called in to find out which side is telling the truth.

This is where things get peculiar.

The Justice Department, it seems, has now begun investigating the FBI chief, William Sessions, to see if he has been abusing his government travel and long-distance telephone perks and giving his administrative assistant and his wife too much power around the office.

That's right, Bush's attorney general, William Barr, has launched a criminal investigation of Bush's FBI chief, who in turn is supposed to be investigating Barr's dealings with the CIA. Makes you wonder how serious these people are about getting to the bottom of things, doesn't it?

As if all this wasn't enough, the CIA, led by controversial Bush-appointee William Gates, is supposed to be investigating its own conduct in the BNL case.

Uh huh.

This whole BNL thing might seem ludicrous if it didn't involve _ among other things _ subversion of America's legal system, foreign policy and national security apparatus.

Sen. David Boren, the Oklahoma Democrat who runs the Senate committee that monitors the CIA, stated the obvious on Wednesday when he said that under the circumstances an honest investigation was impossible. He called on Barr to appoint an independent counsel to look into the BNL case and determine if anybody at Justice or CIA should be charged.

Barr has already refused once to appoint an independent counsel, saying the administration was perfectly capable of investigating itself without outside interference. With less than three weeks to go before the election, nobody expects him to change his mind.

The attorney general, of course, has also refused to appoint an independent counsel to look into that other big scandal threatening the administration _ the Iran-Contra mess involving BCCI.

It should come as no surprise that BNL and BCCI are closely linked, not only as scandals, but as banking institutions. It turns out that BCCI was giving the BNL branch office in Atlanta billions of dollars a year in so-called "off-book" short-term loans that, among other things, helped finance the money transfers to Iraq.

But for the moment, anyway, the big question in this one is how much then-Vice President Bush knew about the arms sales to Iran and illegal transfer of money to the Contra rebels in Nicaragua that BCCI helped arrange in the mid-1980s. Bush claims he was "out of the loop" when the deal was done by Oliver North and Robert McFarlane, national security aides to President Reagan.

But for some reason, few people outside the administration believe that Bush was truly "out of the loop." Maybe it's because Bush is a former CIA chief who prides himself on keeping his finger in all the pies.

The really strange thing to me, though, is the fact that none of this stuff has come up yet in the presidential and vice presidential debates. Two presidential debates are left and it will be mighty weird if they go by without BNL, BCCI and the Iran-Contra mess poking up their ugly heads.

That's when the debates could get bloody indeed.