The Bank of Credit and Commerce International turned out to be popular with many dictators and wealthy lawbreakers as it grew at an unprecedented pace in the late seventies and into the eighties. To some it seemed there were few clients who were turned away. From its offices around the world, BCCI was becoming a cash conduit for drug traffickers, terrorists, despots, arms merchants, and other scam artists and lawbreakers.

Under the euphemism of EMP, cash was being bounced electronically around the world, from BCCI branch to BCCI branch. With each transaction, the origins of the money were obscured further. And all of this growth was taking place with no effective meddling by banking regulators. BCCI was a stealth bank, the institution that did not show up on the radar screen long enough for any regulator to get a fix on its position.

This secrecy went hand in hand with other cultlike qualities at BCCI. Irom the start, Agha Hasan Abedi was a charismatic leader who defined his mission in terms that were more philosophical than businesslike. He dreamed of forging the world's largest bank out of the ruins of Pakistan's nationalized banking industry, of creating an Islamic financial institution to rival and eventually surpass the banks of the Western world. And his employees were inspired to follow him in this grand and exciting scheme. Converts to the vision, they worshiped Abedi and carried out his orders without question. And if they got rich along the way, all the better.

In a business, people resign and go off to other jobs. In a cult, people defect and they are hounded and pursued.

One of BCCI's London managers became a chronic gambler at the Playboy casino there. After losing all of his own funds, he dipped into some Iranian accounts at the bank. To protect the bank's secrecy, the manager was given a $600,000 "redundancy" payment to restore the embezzled funds. The bank could not risk the publicity involved in firing the man or, far worse, reporting the crime to the police. Cults cannot tolerate bad publicity.

BCCI demanded total loyalty from its employees on all issues, as one long-time employee, Masood Asghar, discovered. Asghar became disenchanted with BCCI and quit the bank in 1978. When he left, he claimed that he had a contract worth $3 million. Abedi offered a buyout

$250,000 and a new Mercedes. But Asghar threatened to sue the bank and write a book exposing its inner workings. Since he had spent a good deal of his time in the Caymans, this was a potentially dangerous vow.

Ignoring advice from his friends, Asghar returned to Pakistan and planned to bring out his family, but one morning while inside his house in Karachi, Asghar answered a knock on his door to find a group of soldiers on his front step. They rushed into the house and beat and raped him. Asghar subsequently decided that his days at BCCI were better left unchronicled.

A Pakistani named Aziz Rehman did not have any success when he tried to blow the whistle on BCCI either, although he was never beaten. In the early 1980s, Rehman was working as a chauffeur and jack-of-all- trades at the bank's office in Miami. His chief job was driving important customers around the city in one of the bank's cars, either the Lincoln Continental Town Car or the Cadillac Seville. When the customer wanted to do some shopping or stop to eat, Rehman was always there to pick up the tab.

Sometimes his job entailed driving to a customer's business or a freight office at the airport to pick up a cash deposit for his bank. Once he thought he had hurt his back lugging a bag containing $700,000 in small bills. Pickups were generally twice a week, and over one three-month period he deposited $3 million in the bank. Some of the deposits, he said, were recorded at a phantom branch the bank claimed to maintain in the Bahamas. It was a way to invoke Bahamian bank secrecy laws before BCCI had an office there.

The flow of drug cash into Miami was matched only by the savagery of the gun battles that were occurring on the city's streets. Rehman grew afraid. He worried that someone would kill him to steal the huge sums of cash he was transporting. "My life is in danger," he complained to his supervisors. "I don't want to do these deposits anymore. I will do anything else. Somebody will kill me. This is not my job. You send somebody else."

Rehman's bosses were unmoved. "This is part of our job," he was told by the office manager. "We do this same thing, you know."

But Rehman was adamant that he would no longer perform what he deemed a dangerous chore. It was decided by the bosses that they could no longer trust Rehman, and they fired him. Rehman responded by going to the IRS, taking with him reams of bank records to support his tale of extensive money laundering at the Miami branch.

In April 1984, shortly after he was fired, Rehman was interviewed by several agents in the IRS criminal division in Miami. Based on his tip and evidence, the IRS opened an investigation of BCCI in Miami. Near the middle of 1985, the head of the criminal division in Miami recommended that the IRS open an undercover operation targeting BCCI in Miami. The request was approved within the Miami office but rejected at the next level within the agency.

The agent pushing the investigation was told only that she was fighting a losing battle. Few within the IRS were pushing undercover operations at the time anyway, and BCCI in Miami was a small operation, just an agency office that was supposed to serve foreign nationals. But no one gave the Miami agent a reason for refusing to start the inquiry. So, for reasons that remain a mystery, the U.S. government lost an early opportunity to get behind the scenes at BCCI, and the bank managed to escape scrutiny that could have started its collapse far earlier.

There were other reasons for maintaining strict secrecy at the Bank of Credit and Commerce, such as the account maintained at the bank's marble-and-glass branch office on Sloane Street, in the heart of London's Knightsbridge shopping district.

This branch was the BCCI office frequented most often by the royal families of the Middle East when they were in London. One morning in 1980, the manager of the branch summoned one of his senior assistants, Ghassan Qassem, to his office. Qassem was told that an important client was coming to the bank to open a large account. The client was a representative of the government of Iraq, and his account was to be handled efficiently and with the utmost discretion. The manager also instructed Qassem to make sure the branch looked active and that the staff were hard at work when the client arrived.

About an hour later, a man arrived at the branch and was escorted immediately to the manager's office. When the manager emerged, he told Qassem that the client wanted to transfer a substantial amount of money to BCCI from a branch of Midland Bank near Marble Arch. The manager provided Qassem with the documents authorizing the transfer and Qassem carried them himself to Midland Bank and arranged the transfer of $50 million to BC CI.

Within months, the mysterious account was being used to finance arms transactions. The first two transactions totaled $32 million and BCCI collected about $100,000 in fees on the deals. In addition, the client had agreed that his account would not pay interest, which provided BCCI with a no-cost source of funds.

The Iraqi representative traveled often in Europe and the Middle East. When he was in London, he often used the Sloane Street branch as a personal office. He sometimes spent the entire day in one of the offices, making telephone calls around the world and sending telexes over the bank's machine. Providing special services for a big client was nothing new at BCCI. However, Qassem noticed something strange about the client's telexes: they were coded. Few of BCCI's customers were as security conscious as this one, whose name Qassem eventually learned was Samir Najmadeen.

Too, some of the transactions arranged by Najmadeen were unusual, even for someone who was dealing in arms. At one point, he used BCCI to provide the financing for six Mercedes-Benz sedans. A letter of credit was provided to the manufacturer, listing the destination of the vehicles as Iraq, and instructions were sent along for some unusual options. The sedans were to be equipped with launchers for grenades and small rockets, concealed at the front corners of each car. However, when the Mercedeses arrived in Iraq they were deemed unacceptable by Najmadeen's contacts there: the weapons were too visible. The bank refused to provide the payment to the manufacturer and the vehicles were returned.

Qassem was born in Syria in the middle fifties, but he was raised in Jordan. He had come to Britain in 1969 to attend university and joined BCCI in 1973. He was a trusted employee, so when Najmadeen told the bank that an extremely important contact was arriving at Gatwick Airport outside London one day in 1981, Qassem was dispatched in one of the bank cars to pick up the contact at the airport.

The contact carried an Iraqi passport in the name of Shakar Farhan. He said little to Qassem, identifying himself only as a businessman based in Kuwait who sold electronics and photocopying equipment. He seemed to speak little English, but he spoke so little at all that Qassem was never sure about his fluency. Qassem drove him to his hotel that first day and, in a pattern that continued for several years, often escorted Farhan on shopping trips around London. One time, they went to a tailor's on Oxford Street so the customer could buy some suits. Another time, it was a cigar store on Jermyn Street just behind Piccadilly Circus. Farhan's favorite store seemed to be Selfridges, the large department store where he was able to stock up on all sorts of items.

The balance in the account at Sloane Street always hovered around $50 million. Money would be paid out for arms transactions and it would flow in from commissions on those deals and from other sources. Among the other sources were governments of various Middle Eastern states, which Qassem found provided regular monthly deposits to the account.

The focus of Farhan's business with BCCI, like that of Najmadeen, was arms transactions. Over the years, BCCI provided letters of credit and other forms of financing for transactions that sent weapons of all sorts to various destinations in Europe and the Middle East. In 1985, BCCI provided financing for the shipment of riot guns and ammunition intended for Syria. When British authorities refused to approve a license to export the sensitive equipment to Syria, the bank arranged for an African diplomat to be paid to sign documents claiming that the material was destined for his country. In fact, records showed that the shipment was diverted to East Germany, where it was divided between East German state police and the Palestinian terrorist Abu Nidal.

The organization run by Abu Nidal, the nom de guerre for Sabri al-Banna, was one of the most violent and ruthless in the world. By 1985, its agents were blamed for the deaths of more than 200 people in dozens of attacks on Western locations as well as spots in moderate Middle Eastern companies. In the early 1980s, the organization was based in Baghdad and protected by the Iraqi government. By 1985, Abu Nidal had worn out his welcome there and moved his headquarters to Syria.

Qassem believed that the man he knew as Farhan was a representative of the Iraqi government when he first started doing business at the bank. The earliest arms deals supported that view. At the time, Iraq was mired in its long war with Iran. Qassem said that he had been told by his superiors that assisting Farhan and Najmadeen was part of the bank's efforts to show its wealthy Middle Eastern backers that it was a staunchly pro-Arab institution. "During the Iran-Iraq War, the bank wanted to show to the Arab world that we supported Iraq," explained Qassem later.

There was more at play, however, as the banker would find out later when he discovered that Shakar Farhan was actually Abu Nidal himself.

By 1982, when Abu Nidal's organization was beginning to use BCCI extensively, the bank was well-suited for someone who needed to shift money around the globe quickly and quietly. The bank had fifty-nine offices in Europe, ninety-three in the Middle East, fifty-eight in Africa, thirty-four in the Far East and Southeast Asia, and fifteen in North America and the Caribbean.

There was a long-standing banking operation in Hong Kong and another in Switzerland. There were branches in South Korea and Indonesia, and a major unit in Manila. Two branches had recently been opened in Colombia, two were operating in Panama, and a new one had opened in Jamaica. BCCI owned forty percent of a bank in Nigeria and had a profitable operation in Zimbabwe. In Swaziland, on a vital border

of South Africa, BCCI had become so powerful that it was functioning as the central bank. The nation's king was a shareholder in the local affiliate.

In the United States, despite its rejection by the Federal Reserve, the bank had received permission from state authorities to open limited- service offices in New York in 1978, and Miami and Los Angeles in 1982. These offices could not take deposits from American citizens and the money they took in from foreigners was not insured. However, the offices were permitted to provide trade financing and other business loans to corporate clients. In its pitch to California regulators, BCCI had stressed its connections to the home countries of new immigrants to the state.

"New Californians wishing to establish businesses in California may have difficulty in making financing contacts because they have no credit history here," the bank said in its application. "BCCI would have the advantage of either knowing them from their home countries or having the capability of establishing their worth and reputation in their country of origin."

Because they were not full-service branches and would not be federally insured or take deposits, banking regulators in all three states did not conduct major inquiries into the bank's finances, practices, or background.

In public statements, the bank was attributing its growth to trade financing and retail banking, which means consumer deposits. It did not make public the fact that one of its most important source of consumer deposits was flight capital.

Most Third World countries have strict currency controls designed to keep capital at home, where it can contribute to economic development. Rich people do not like such restrictions, often because they fear that they could lose their fortunes in these politically and economically unstable nations.

What BCCI became particularly adept at doing was taking deposits from these rich individuals in their own countries and moving them to BCCI branches in more hospitable countries, such as Switzerland or Britain. This was a highly profitable line of business because most Third World depositors are so pleased to have a foreign cash hoard that they are not concerned if the nest egg does not yield much interest. Among the countries where large amounts of flight capital originated were India, Pakistan, and many African nations.

BCCI was far from the only bank in the world accepting flight capital. Many international banks are eager to accept deposits from these customers when they smuggle money abroad. Not often, however, are the banks themselves accused of violating currency-exchange laws. Usually it is an individual within the bank who takes the fall and is quietly dismissed. The fact that BCCI got caught and punished in public as an institution, however, was an indication of how widespread the practice was within the organization.

In the eighties, BCCI was accused of breaking exchange laws at least half a dozen times. The countries where laws were violated included Mauritius, Sudan, India, Kenya, Colombia, and Brazil. The bank was found guilty in India, Mauritius, Kenya, and Colombia. In Kenya, a BCCI branch manager and two senior officers were arrested on charges that they had failed to report $34 million in foreign exchange earnings from coffee exports; the bank was fined $30 million. In Brazil, the president of the BCCI subsidiary was stopped by police at Sao Paulo airport and accused of trying to smuggle $150,000 in traveler's checks to Paraguay. Those charges were later dropped.

In Colombia, the bank was found to be running a secret flight capital operation on the second-floor of its main office in Bogota. The bank was helping rich Colombians move money out of the country through its affiliate in the Bahamas. When the operation was discovered, Colombian authorities found that BCCI's Nassau branch had $44.6 million in illegal deposits from Colombia. BCCI was fined $11,000 and two of its top administrators were ordered out of the country.

The punishment might have been more severe, except that BCCI had strong ties to the Colombian government and banking community. Colombia had strict laws about ownership of its banks by foreign entities. However, BCCI had acquired a medium-sized Colombia bank, Banco Mercantil, in 1984 after receiving the first waiver of the regulations granted by then-President Belisano Betancur. The acquisition, which took nearly two years to complete, was arranged with the assistance of Rodrigo Llorente, a prominent leader of Betancur's Conservative Party and a former finance minister and ex-president of Colombia's central bank.

Nonetheless, for a bank that crowed about its dedication to serving the needs of Third World nations and did seventy-five percent of its business in those countries, moving money out of poor nations was a particularly cynical practice. Capital flight can prove disastrous for developing countries. It undermines prospects for long-term development, robs the government of the ability to build the infrastructure vital to economic prosperity, and can make paying a country's foreign debt harder. In the end, capital flight steals the opportunity for the poor to improve their standard of living and enriches only the wealthy.

It was not only in the Third World that BCCI was running into legal and regulatory trouble. When BCCI's branches reached forty-five in Britain in 1978, the Bank of England asked the bank to freeze its growth. Saying they had no clear picture of the bank's finances, the regulators also refused it permission to engage in some forms of currency-exchange trading.

Despite its limited public presence in the United States, BCCI also ran into trouble there. Agents from the Internal Revenue Service and Drug Enforcement Administration stormed a BCCI representative office in Chicago and arrested an officer on charges of conspiracy, fraud, and failure to report cash deposits over $10,000. The arrests climaxed an eighteen-month investigation that also implicated an officer of the Bank of Pakistan.

The BCCI representative office in Chicago was not supposed to conduct banking business. It was supposed to restrict its operations to marketing the bank's services outside America. U.S. regulators had never granted BCCI a license to take deposits from domestic customers. State regulators in New York, Florida, and California had granted the bank limited licenses for what are called agency offices. These offices, which were located in New York City, Miami, and Los Angeles, were permitted to transact business with foreign customers but could not take domestic deposits. In addition to the one in Chicago, by the mid-1980s the bank had representative offices in Boca Raton, Houston, San Francisco, Tampa, and Washington.

BCCI also had a growing secret empire. Despite attempts by U.S. regulators to ensure that BCCI had no domestic banking presence in the United States, it operated its restricted agency and representative offices in direct cooperation with First American Bank in Washington and the National Bank of Georgia in Atlanta.

The links between the operations were demonstrated on April 24, 1985, when representatives of the American operations met in New York for the first strategy session of a new group created on orders from Abedi. It was called the Americas Coordinating Committee and its task was to coordinate all of the bank's operations in North and South America.

"BCC has been a success in the Third World and now we are embarked on establishing an equally successful business in the most competitive country in the world," said Aijaz Afridi, the First American Bank of New York executive vice president who opened the meeting. "We must work together to overwhelm the U.S. market and act in a unified manner and be supportive to each other."

Afridi had served as BCCI's general manager in Luxembourg and Geneva before joining First American Bank of New York in July 1983. He took the First American job at the request of Abedi, and phone records showed that he was in contact with BCCI's London headquarters almost daily.

The others present also had long-standing ties to BCCI. Among them were Amjad Awan, who was now assigned to BCCI's Washington representative office; Raja Allahad from BCCI in Canada; Dilip Munshi from the Los Angeles agency office; and Tariq Jamil, an executive at the National Bank of Georgia and a former BCCI officer.

According to the later Federal Reserve charges, by this point BCCI had maintained a controlling interest in First American for several years as a result of its loan agreements with the original investors. On January 1, 1985, the Fed said, BCCI had obtained similar control over the National Bank of Georgia through a loan to Ghaith Pharaon that granted BCCI control over his shares at any point BCCI sought to exercise it.

The two-hour session was brought to a close by Khusro Karamat Elley, a senior vice president of First American Bank of New York. Elley had been head of BCCI's New York agency office in 1983 when he moved to First American. He had been hired after Swaleh Naqvi suggested that he would be a good man for the job to Robert Altman, the lawyer, prot6ge' of Clark Clifford, and president of First American's parent company. (Clifford and Altman later defended the consultations with BCCI officials by saying that it was their belief BCCI was acting as the financial adviser to First American's Arab shareholders; the two American lawyers denied that BCCI exerted any control over the management decisions at First American.) While working at First American, Elley's pay was allegedly supplemented by BCCI.

This was a familiar pattern for First American executives. Bruno Richter, the first president of First American in New York after the acquisition in 1982, was suggested for the job by Abedi. When he recruited another American for a post at the bank, the applicant was interviewed by Elley and Altman and then flown to London for interviews with Abedi and Naqvi.

So it was natural that, in his concluding address to the strategy session, Elley should refer to the banks as one big family. "In America, we are sitting on seven billion dollars in assets and this is just the beginning," said Elley.

At the time, BCCI's assets in the United States, through its agency offices, were less than $1 billion. However, the combined assets of First American Bankshares, National Bank of Georgia, and those BCCI offices did total about $7 billion.

Many of the same faces were on hand later in 1985 when Agha Hasan Abedi showed up to address what was billed as the "Bank of Credit and Commerce International Conference of the Americas." It was held at the Grand Bay Hotel in Miami, where Abedi was staying in a $600-a-night suite. The highlight of the conference occurred on Sunday, November 3, in one of the ballrooms at the hotel. It was the chance to listen to Agha Sahib exhort the bank managers to work together as a single dynamic force to grow and prosper. The speech was a sparkling example of Abedi-speak.

"Management is providing a purpose and a direction to the dynamics of an organization, to the dynamics of an energy system," said Abe di. "I have to reach to you the meaning of this. What is the meaning of dynamics in the literal sense? What are the components and ingredients of the dynamics, the productions, the elements that have to be there and that have to be built in the meaning of dynamics? What is the quality of energy, flow movement, power?

"You live, you exist, for your dynamics is part of the order of dynamics of existence," continued Abedi. "It is the dynamics of cosmos, during which that dynamics of our universe that is known to us."

For those who may have been confused, Abedi offered another definition of dynamics: "Technically this is an organization. This is the universe. This is the organization of the universe. This is dynamics. Don't call it organization. Now call it dynamics. And the function of the manager is to put a purpose and a direction into that dynamics. Whether it is your branch, it is a dynamics. Your branch is nothing. Call it from today by the name of dynamics. BCC is a dynamics."

At various points in the three hours of remarks, Abedi interrupted his monologue to address individual members of the audience. Someone near him was smoking and Abedi told him it was all right. Abedi enjoyed the man's smoking. He benefited from it because he could see how much the man relished it. A few minutes later, when Abedi was talking about a dynamic force that was driving BCCI to open more and more branches, he singled out Amjad Awan.

"Mr. Awan," said Abedi, "may I ask you, do you feel the force within, which within you drives you? How many times do you feel? And what does it make you feel? What do you become when you feel that? How many times do you feel it? For what do you feel? And where is that driving force located in you? What does it taste like? What does it feel like?"

"Sir, I certainly feel the force," replied Awan. "Off and on, not all the time."

"How often do you feel and then what is that feeling?" asked Abedi, refusing to let Awan escape without a full testimonial.

"It's a feeling of living within, something much greater, which you try to relate to," said Awan.

Sometimes the force failed. In fact, not long after Abedi's Miami speech, Masihur Rahman was back in London wondering how the bank was going to survive.

BCCI's management organization was loose, to put it kindly. Abedi and his top aide, Swaleh Naqvi, stressed repeatedly to those around them that the officers in the field were the ones who produced results, who fueled the all-powerful growth and profits. When Rahman, as the bank's chief financial officer, challenged the assumption that upper management had no oversight role to play, his advice was rejected.

"What can you do, sitting in London?" Abedi asked once. "So leave them alone."

So when a new division was created within BCCI in 1983 to handle the bank's growing trading in the world's stock and commodities markets, there was no centralized control at the London headquarters. The division was called the treasury department and its head was a Pakistani banker in his early forties named Syed Ziauddin Ah Akbar. While Akbar would execute the trades out of London, they were to be entered on the bank's books in the Cayman Islands.

American banks are prohibited from participating in stock and commodities trading. The prohibition stems from the collapse of the nation's banking industry in 1932. At the time, many blamed the collapse on the stock market crash of 1929. So in 1933, Congress passed the Glass-Steagall Act forbidding banks from playing the market or underwriting stocks, although they have been trying to beat down that wall ever since.

European banks were under no such restrictions and so, in its quest to join the big international banks, BCCI had opened its treasury depart ment. The idea was to pool surplus deposits within the bank and invest them in conservative assets, such as U.S. Treasury bonds, British government bonds, and blue-chip stocks. This would enable the bank to earn a higher rate of interest than they were paying to the depositors, a traditional means of making a profit in banking. No more than ten percent was to be used for riskier trading in commodities and the foreign currency exchange markets.

But, as sometimes happened at BCCI, that restriction was ignored almost from the outset. Akbar and an assistant, under the supervision of Naqvi, soon began taking large positions in commodities transactions, including the highly volatile options markets, where an entire invest ment can be wiped out in a few ticks of the stock. The result was that they began to lose substantial amounts of money that belonged to the bank's depositors. With each loss, they resorted to the gambler's solution and bet more on the markets in hopes of recouping the previous losses. By the middle of 1985, the traders were taking exposures equal to $1 billion or more.

At the time, the bank was being audited by two big accounting firms. Price Waterhouse did the books in the Cayman Islands and Ernst & Whinney was responsible for audits of operations out of Luxembourg. Between them, the two firms were collecting fees of $4 million or so a year from BCCI.

In January of 1986, accountants from Price Waterhouse came to Masihur Rahman with startling news. In auditing the books of the treasury department for 1985, the accountants said, they had come across a series of irregular transactions. As a result, they went on, the bank had lost somewhere between $300 million and $500 million in commodities trades. That was equivalent to the entire cash capital of the bank. There was no way BCCI could survive such a devastating loss.

Rahman was angered both by the losses and impending disaster and by the failure of Price Waterhouse to pick up the transactions earlier.

"Look," he said, "the department has ten people. It has maybe a hundred files. And they were all sitting in one small section of one floor and you did not find them until now."

There was no satisfactory explanation. In the coming days, the magnitude of the losses became clear. A total of $430 million had vanished in bad trades. Most of it had been lost when interest rates went up at a time the bank had bet they were going down and bought U.S. Treasury bond options that were wiped out.

After Rahman broke the news to Abedi, the bank's founder got on the first plane to Abu Dhabi for a meeting with Sheik Zayed and his financial advisers. When he returned, he told Rahman that he had secured $150 million in new cash. It was enough to keep the bank afloat for at least the time being. When Rahman asked Abedi the source of the funds, he got no clear answer. When he asked the accountants from Price Waterhouse, who would have to verify the money in order to sign off on the bank's audit report, he was told that it had come from the staff benefit fund, ICIC Holdings. Confronting Abedi with the information about the raid on the employee assets, he was told not to worry.

"Yes, we have done it," said Abedi. "But do not worry. More is coming from other shareholders and you soon will see a complete revival and we will have more capital and more shareholders. Very heavyweight."

Indeed, soon after that, one of the most powerful and wealthy nonroyal families of Saudi Arabia acquired a big chunk of stock in the Bank of Credit and Commerce. The bailout came from the Bin Mahfouz family, which was led by Khalid Salem bin Mahfouz and his brothers. Their holdings included The National Commercial Bank, the largest bank in Saudi Arabia. In exchange for injecting $150 million in new capital into the bank, five nominee companies controlled by the Mahfouz brothers acquired twenty percent of the stock in BCCI. Most of the stock was purchased from Ghaith Pharaon. The Mahfouz brothers also acquired shares in First American at the same time. During this period, the Mahfouz family obtained $141 million in loans from BCCI. The loans were made, outside auditors would later say, without loan agreements, promissory notes, or security documentation for collateral.

The huge treasury losses were kept secret within the bank. Only the top four or five executives were aware of what had happened. There was some fallout outside the bank, however. Ernst & Whinney, angered that the treasury losses had jeopardized the entire banking company, with drew as auditors of BCCI's Luxembourg operations. Responsibility for auditing the entire operation fell to Price Waterhouse.