The chartered Learjet out of Tampa described lazy circles in the crystal-blue sky above Omar Torrijos Airport in Panama City before receiving permission from the control tower to set down. With a thump and a squeal of rubber tires, the jet landed on the runway and taxied rapidly to a spot near the military portion of the field.

Armed guards in khaki uniforms watched distractedly as a handsome young man in a business suit stepped down the stairs of the private jet and walked toward a waiting limousine. He was carrying a large suitcase and a leather attach6 case, but no attempt was made to search his luggage or examine his passport.

Steven Kalish, who was lugging the two bags, had a problem. He had too much money, literally. His lakeside home in Tampa, Florida, had a swimming pool, a Jacuzzi, a carport for his Ferrari and BMW, and several rooms filled with cash.

On September 22, 1983, the day his private jet landed in Panama, the high school dropout was sitting on $35 million in profits from recent marijuana smuggling operations. The money machines used to count the dollars had been shut off. They could not keep up with the volume, so the counters had switched to weighing the money. A single U.S. currency note weighs one gram, about 450 bills to the pound.

For several weeks, Kalish had been searching for a new way to move his cash out of the United States and into the banking system of some foreign country. The dilemma had taken on an air of urgency because he had just bought one million pounds of high-grade marijuana in Colom bia. He expected to earn $300 million when it was brought to the United States and sold. His organization had been doing some of its illegal banking in the Cayman Islands, but Kalish did not think that the banks there could handle the volume of cash he was about to generate.

So he decided to try Panama. It had a reputation as a place where bankers did not ask too many questions about large cash deposits. Through two intermediaries, Kalish had arranged a trial run. Bring at least $2 million, he was told, as a sign that he was a serious person.

The suitcase that Kalish shoved into the trunk of the waiting limou sine weighed about forty-four pounds. It contained $2 million, all in one-hundred-dollar bills. The briefcase, which Kalish kept by his side, contained $300,000, also in hundreds. This smaller amount represented the token gift he had been instructed to bring for an important person, General Manuel Antonio Noriega, who had just become military com mander of Panama.

After the short drive from the airport, the limousine pulled up in front of the Bank of Boston building in downtown Panama City. Kalish got out with his bags, but he bypassed the American bank branch. Instead he took an elevator to a private club atop the building. There, he met Cesar Rodriguez.

A one-time drug pilot whose friendship and business deals with Noriega were making him rich, Rodriguez liked to flaunt his wealth and his connection to Noriega. He had bought a $1.2 million house next to one of Noriega's homes and operated a fleet of limousines and jets. Often both the planes and the cars were used for drug trafficking. He owned the Tower Club, where he was meeting the young drug smuggler.

When Kalish explained his cash flow problem, the Panamanian was eager to help. He offered an entire package of banking and investment services, right down to an armored car that would pick up the cash at Torrijos Airport and transport it to a bank downtown-naturally, all without the formality of customs checks and under the watchful eye of the military. And naturally, all for an up-front payment and a percentage of each shipment.

As for a bank, Panama City was a very cosmopolitan city and a small town. Rodriguez said he knew all the important bankers. Many of them belonged to the private club where they were sitting.

With the help of Rodriguez and local lawyers, Kalish that day set up a dummy corporation and deposited the $2 million in an account at a bank in Panama that afternoon. The following afternoon, he was taken to meet Noriega at one of the general's homes. They had a brief conversa tion. As Kalish was leaving, Noriega mentioned that he had forgotten his attach6 case.

"Oh, it's for you," said Kalish as he walked out the door, leaving that famous pockmarked face smiling behind him.

Less than a month later, Kalish was back for more. Again, he brought $2.5 million in cash. Again, his jet taxied to the military portion of Torrijos Airport and Kalish was picked up by a limousine. When he arrived downtown, Rodriguez treated Kalish like an old and honored friend. The first deposit and the forgotten briefcase had clearly worked. He was a serious person.

"The general wants to see that you get the best service, so I will help you open an account with General Noriega's favorite bank," said Rodriguez. "It is called the Bank of Credit and Commerce Interna tional."

BCCI's man in Panama was Amjad Awan. Since his arrival two years earlier in his post as country manager, Awan had presided over a sharp rise in deposits, the ultimate measure of success at BCCI anywhere in the world.

Not only had he made BCCI the favorite bank of Noriega, Awan himself was Noriega's favorite banker, thanks to an array of professional and personal services that he had lavished on the general. In return, Noriega often referred customers to BCCI and helped fuel its growth in the country.

Though chilling stories would one day be told about his violence, perversity, and venality, Noriega could be a charming associate. In part because of his own background, Awan got along well with the general.

Amjad Awan was born in Kashmir on July 30, 1947, two weeks before the creation of Pakistan. His father, Ayub Awan, had joined the government of the new nation as a top police official. Eventually, he became chief of Pakistan's domestic intelligence service, a post that Noriega once held in Panama. Awan's father-in-law, Mohammad Asghar Khan, was Pakistan's first air force chief of staff and later chairman of Pakistan International Airlines.

After his graduation in 1968 from a leading Pakistani university with a degree in economics, Awan had pursued a career in banking, rather than government service. He spent three years with United Bank in Karachi, where he brushed shoulders with its president, Agha Hasan Abedi.

Unlike Abedi, however, Awan stayed on at United Bank for two years after it was nationalized. Much of Awan's career had been spent in United's London office. That is where he was working when, in 1976, he joined a subsidiary of the Bank of Montreal as a vice president of marketing. Part of Awan's territory was Dubai, the small Persian Gulf nation next to Abu Dhabi.

Late in 1978, Awan received a telephone call from his countryman and former United Bank colleague. Similar calls had been placed to Pakistani bankers around the world in recent years as BCCI sought to staff its swelling network of branches.

"I need you to come work for me," said Abedi.

Awan was young and full of energy, and he was well aware of BCCI and its growth. Many friends from his days at United already had joined the bank. Awan was not inclined to resist the overtures to patriotism and membership in the family of BCCI profferred so persuasively by Abedi. By early December, he had signed on and was marketing manager of BCCI's main branch in London.

BCCI's major customer base was still the immigrant community in Britain, particularly the Pakistanis whose savings and transfers of money home had formed its original base. Many Third World customers came to BCCI because they felt they were treated shabbily at Britain's staid institutions, such as Barclays and Lloyds. Shortly after Awan arrived at BCCI there was an influx of Ugandans who told him that they found BCCI a far more comfortable place for their banking than the other London banks. The bank did a booming business in North London, where it catered to hundreds of small Asian-owned businesses. At the same time, BCCI was still wooing the rising number of free-spending Arabs who had discovered gambling and other pleasures of life away from the parched desert shiekdoms.

The Bank of England's concerns about BCCI remained, although its regulatory actions were limited. When Britain passed a new banking law in 1978, the regulators were able to divide banks into two classes. A "recognized" bank was a full-service institution deemed to have met the highest standards. A "licensed deposit taker" was a lower class of bank that was prohibited from doing some forms of banking business. BCCI was denied the higher status, but there was no indication that the action affected its growth or its management.

Indeed, although still registered legally in Luxembourg and the Cayman Islands, the bank's headquarters were in London. And it was from those offices that its headlong expansion was being guided. Espousing its radical Third World political rhetoric and exploiting its association with an organization called the Third World Foundation, BCCI was making inroads with developing nations throughout Africa, Asia, the Middle East, and Latin America. Often it did so by cultivating local leaders and by aligning itself with various self-help projects designed to polish its image.

In this milieu, who you know can be more useful than what you know, and Amjad Awan was a welcome addition to those who were cultivating this part of the world on behalf of BCCI. The prominence of his family and that of his wife's opened many doors, including those of the diplomatic circles. His own intelligence and polish made him instantly likable.

"He can talk about international banking or any number of other subjects with knowledge and humor," one of his later associates said in describing Awan. "He is just a charming fellow to be around. A real gentleman."

In his rounds of the various diplomatic emissaries in London, one of the men Awan met soon after he arrived at BCCI was Guillermo Vega, the Panamanian ambassador to London. Vega was already a friend of Awan's boss, a Pakistani named Allaudin Shaik, and he took an immediate liking to Awan, adding him in his social and business circles.

When Panamanian President Aristides Royo came to London in 1979, Awan and Shaik were among those invited to a dinner at Vega's residence. There, Awan met Royo and an entourage of ministers and military leaders. Royo's party included General Omar Torrijos, the military dictator of Panama since 1968 and the man who had picked Royo as the puppet president. Another member of the group was a lieutenant colonel named Manuel Antonio Noriega.

Noriega was chief of G-2, the Panamanian intelligence service, and a man of increasing power in Panama. Torrijos, who had negotiated the Panama Canal Treaty the year before, was beginning a gradual retreat from the day-to-day running of the country.

For years, Noriega had been selling information to the American and Cuban intelligence services. During the Panama Canal Treaty negotia tions, he had even supplied the Central Intelligence Agency with information about his own country's positions and strategy. At the same time, he plotted with other military men and flunky politicians within Panama. As Torrijo's interest in ruling Panama waned, Noriega's waxed.

BCCI was trying to open a branch in Panama, so Shaik, who was head of central marketing for the bank, had instructed Awan to be as helpful as possible to the visiting Panamanians. In a pattern that he would repeat often in the coming years, Awan arranged dinners for the Panamanians at fancy restaurants and escorted them around the city. Noriega loved traveling and staying in lavish hotels, and he was in London often. Over the course of his many visits, he was escorted frequently by Awan.

This type of coddling paid off. In 1980, the government of Panama granted the Bank of Credit and Commerce International a license to open for business. Abedi flew over to Panama from London for the opening festivities. President Royo dedicated the office, and Colonel Noriega attended as the personal representative of General Torrijos. Abedi gave a speech announcing that Panama would be his bridge to Latin America. The ceremony was followed by a lavish reception in the Portobello Room of the Panama Hilton. It was the most extravagant bank opening the town had seen. And why not, for BCCI had just received the key to a golden kingdom of green money and white powder.

Bank competition in Panama was intense, with virtually every major international bank in the world operating there. Barclays was in Panama, as were Citibank, Chase Manhattan, Bank of Boston, Union Bank of Switzerland, and dozens of others. Part of the lure was the trade that moved through the Panama Canal and the Col6n Free Trade Zone, which served as a jumping-off point for much of the world's exports to South America. But there was a greater appeal, at least to some of the bankers.

During the late 1970s and early 1980s, illegal dollars began to enter Panama in vast quantities via private planes, baggage on commercial flights, and as air freight. The corruption in the Panamanian military made it all easy and risk-free; soldiers supervised the off-loading of cash into armored cars that hauled the money directly to the banks. Once the money was tucked away in a bank account, anonymity was guaranteed by tight bank secrecy laws and a coterie of lawyers willing to serve as front men.

By the end of the administration of President Jimmy Carter, U.S. intelligence had recognized Panama's increasing importance as a center for laundering drug money, particularly for the cocaine kingpins of neighboring Colombia. Not long after that, a Panamanian justice minis ter, Jorge Riba, summed up his country's attitude when he said: "There is no such thing as good or bad money. To me, money is neutral."

Late in 1981, Awan asked for a transfer out of London. After three years in London with BCCI and two with Bank of Montreal, he was eager for a new country. He was offered Zambia or Panama. He chose Panama.

Outside influences also were at work. The first manager of the Panama City branch was not working out to Noriega's satisfaction. He was too cool to Noriega's business partners, too cautious to play the drug-money game. Noriega showed his displeasure without much subtlety. When the manager's brother flew in for a visit, airport immigration officials kept him sitting for eighteen hours while they checked to see if his visa was genuine. When the manager complained about the incident to London, the bank's higher-ups decided that his services were no longer needed in Panama. Another BCCI official was dispatched to tell Noriega that a new, more flexible manager would soon arrive.

When Awan arrived with his wife Sheereen and two preteen children, they were met at the airport by a local BCCI employee and Noriega's secretary, Marcela Tason. The secretary ushered Awan and his family to the diplomatic lounge while Panamanian officials rushed his baggage through customs.

"It's curious," said Awan. "As an executive of this bank, I've had the opportunity to travel a lot, but this is the first time I've been received in the diplomatic lounge." He would soon get a taste of what real power could do.

At the time, BCCI's operation in Panama was prospering but not prosperous. The bank served businessmen on the periphery of the large international trading community built around the Col6n Free Trade Zone. Mostly they were Palestinian and Lebanese merchants living in Panama. Accounts averaged from $50,000 to $200,000. Few inroads had been made into the world of international finance and corrupt cash, where the real money was to be made.

One of the keys to changing that was Noriega. In July of 1981, Torrijos had been killed in an airplane crash. After the death of Torrijos, Noriega had been vying with three other generals to grab control of the country. He was clearly a man on the rise, and an account with him would send a signal to others that BCCI was a player in Panama.

Renewing his relationship and cultivating Noriega became Awan's top priority. It took several weeks and a series of expensive dinners and long conversations, but Noriega finally agreed to open an account at BCCI.

"This will be a secret account, a secret service account," explained Noriega, who was still intelligence chief. "You must keep it highly confidential. None of the staff at the bank must know about the account, particularly the Panamanian employees. I am the only one who will control this account. You will act only on verbal or written instructions from me and nobody else."

The account was opened in the name of the Panamanian Defense Forces with a deposit of around $200,000 in cash. Soon, it swelled to several million dollars. Eventually, the balance would exceed $20 million.

As instructed, Awan handled the account personally. Credit cards were issued to Noriega, his wife, and his three daughters. The bills were sent directly to Awan at BCCI and paid out of the account. As Noriega's confidence in him grew, Awan began handling even more sensitive matters.

Noriega became military commander of Panama in August 1983 after promising to support the presidential candidacy of another general, Ruben Dano Paredes. Secretly, however, Noriega moved quickly to prepare for the elections scheduled for the following May. Acting behind the scenes, he used other politicians to denounce and neutralize Paredes. Within weeks, Paredes was finished as a politician. The way was open for Noriega's candidate for president, Nicolas Barletta.

Up to that point, the secret BCCI account had been used to finance trips and lavish spending by Noriega and his family. With the campaign, the general found another use for it.

He began to telephone Awan at the bank. Someone will be coming by with a note signed by me, Noriega would say. Give him the amount of cash on the note. When the visitor arrived a BCCI's head office in a complex attached to the Panama City Hilton, Awan would draw the cash from Noriega's account and hand it over to the man bearing the note. Many of the faces he recognized. They were prominent Panamanian politicians.

On election day, Panamanian soldiers fired on demonstrators and the military slowed the vote count to a crawl, afraid that Barletta was going to lose. In the end, more cash payoffs were made so that Noriega's candidate could win by a narrow margin.

Noriega's inner circle also was doing business with Awan and BCCI.

One of the general's closest friends and business partners, Enrique

Pretelt, opened an account for his chain of exclusive jewelry stores.

Pretelt in turn brought in Cesar Rodriguez, who opened accounts at the bank for some of his many enterprises. He often referred customers to BCCI, too.

Among those recommended by Rodriguez was Ricardo Bilonick, an American-educated Panamanian pilot and sometime-diplomat who owned an airfreight company that specialized in flying cocaine for Colombia's Medellin cartel. For each load, Bilonick paid a fee of several hundred thousand dollars to Noriega on behalf of the cartel.

One day in 1983, Bilonick walked into the main BCCI branch in downtown Panama City and told Awan that he wanted to open an account with a $1 million line of credit for his cargo business. No, he said, he did not intend to put up any security for the account. When Awan politely told him that he would need security for such an account, Bilonick left.

A few days later, he returned and opened an account through one of Awan's assistants. He deposited a large amount of cash into the account and immediately took out a loan against it. The amount of the loan was almost the same as the account, minus a one percent fee charged by the bank. Bilonick never returned and the bank simply took his cash deposit in payment on the loan.

This was not an unusual transaction for BCCI or other banks in Panama. BCCI even had a name for it-"a cash-collateralized advance." Fancy name aside, it was a simple but effective form of money launder ing. The bank accepts drug cash as a deposit and makes a loan of almost an equal amount to the money launderer. To curious law enforcement or tax authorities, the loan looks like a normal business transaction, except no one involved expects it to be repaid.

Questioned later about the Bilonick transaction, Awan would deny any knowledge of illegal motives or suspicions about the origins of the cash deposit. "I can only conjecture to what his motives were," said Awan. "But it can be a business-related transaction which is normal over there."

Such services also were normal in BCCI's London offices, where Awan had first joined the bank. In those cases, the cash involved was not necessarily tainted. Usually, the intent was to assist businessmen in evading Britain's heavy taxes, such as its Value Added Tax or VAT. All the person needed to conceal business income from the tax collector was a relative or friend abroad.

"The businessmen would deposit 'black money' that did not go in their VAT records with the bank in the name of one of their relatives abroad," a former BCCI executive in London explained. "In return, the bank would extend to them a loan of the same sum, charging one percent of the amount as its fee. Because nonresidents do not pay UK tax, the system also enabled them to get out of paying composite rate tax."

The former executive said it was easy to spot these transactions on the bank's books. The loans were always matched against the deposits, but first one had to be able to see the books, of course.

This simple technique for hiding money had been around far longer than BCCI. Meyer Lansky perfected it in the 1950s for the American Mafia. He used Swiss banks and a plainer name. It was called a "loan back."

BCCI also did a brisk business in cash at its branch at the free-trade zone in Col6n, the Atlantic port that was Panama's second-largest city after the capital of Panama City. In the free-trade zone, contraband of any nationality could be bought and sold. Many of the buyers were smugglers running the American economic embargo on Cuba. For instance, one of the bank's best customers in Col6n maintained a substantial business selling hotel equipment made in the United States to Cuba. Other merchants dealt in high-tech items and arms. For all, the preferred method of payment was cash.

Steven Kalish had returned to Panama on October 11, 1983, carrying another $2.5 million in drug profits. As promised, Cesar Rodriguez was going to see that the marijuana smuggler got the preferred-customer treatment at General Noriega's favorite bank.

The next morning, Rodriguez and Enrique Pretelt took Kalish to the main office of the Bank of Credit and Commerce International. There, they introduced him to Amjad Awan. With the banker's assistance, Kalish opened an account at BCCI and deposited $2 million of the cash. He received a top-secret manager's ledger account, M/Li8. A month later, he withdrew half a million dollars as down payment on a Boeing 727 jet he was buying for Noriega. The remainder of the currency was used to buy Kalish a twenty-five percent interest in a Panamanian corporation. His partners were Rodriguez, Pretelt, and Manuel Noriega.

BCCI was not the only bank laundering money in Panama, as U.S. drug investigators would soon discover. The practices used by Amjad

Awan were employed at many neighboring bank offices. The National Bank of Panama made substantial amounts of money by charging banks a one percent fee for the cash they transferred to the central bank. And many of the big American banks operating in Panama made use of variations of the loan-back scheme. The most popular variation was to take in cash in Panama as a certificate of deposit and loan it out in New York or elsewhere as a legitimate loan.

In his testimony before the U.S. Senate Subcommittee on Terrorism, Narcotics, and International Operations in early 1988, Ramon Milian Rodriguez, a Cuban-born accountant who spent years as a top money launderer in Miami and Panama for the Medellin cartel, explained the eagerness of the big banks for such deposits in the early eighties.

When he flew to New York to arrange such transactions, said Rodriguez, the banks would have a limousine meet him at the airport. Though he said he no longer remembered their names, Rodriguez claimed to have met with top officials at major banks in the nation's financial capital for transactions that he said both sides knew were charades.

"We were breaking laws in a very big manner and you always have to have plausible deniability," said Rodriguez. "And the New York banks are no fools."

Neither was the Bank of Credit and Commerce International. And, among all the financial institutions operating in Panama, only BCCI could boast that it was General Manuel Antonio Noriega's favorite bank. Unfortunately, the relationship was not enough to keep Awan in Panama after he made a mistake of the worst kind, one that cost the bank money.

Criminals learn the advantage of keeping a distance from some aspects of their schemes. Often, they use lawyers to maintain that distance. One of the reasons Panama had turned into such a booming money-laundering haven was that its laws allowed a lawyer to set up a shell corporation and never have to reveal to anyone the identity of the real owner. The principal occupation of Panama City's thousands of lawyers is creating and administering these shell companies on behalf of offshore owners. As a convenience to clients, many lawyers set up the corporations and kept them "on the shelf," complete with corporate papers and ready directors.

One day in the fall of 1984 one of these lawyers came into Awan's office at BCCI in Panama City. He wanted to open an account in the name of one of these dummy corporations. He said a substantial amount of money would be transferred into the account soon in the form of U.S. Treasury checks.

"We never know who the beneficial owners of the corporation are,"

Awan said years later, in explaining what happened. "We base our account opening on the reputation of the attorneys."

A risky business in any country, let alone Panama, as Awan discovered in this case.

Not long after the account was opened, $3.7 million worth of Treasury checks did indeed come into the account. BCCI sent them to The Bank of New York in Manhattan and they were cleared, which means they were deemed legitimate. The day they cleared, the bank paid out money from the account on the basis of the checks in the name of the dummy corporation.

Later that same day, a couple of U.S. Treasury Department investigators paid a call on Awan at the BCCI office. The checks, they explained, had been forged. They were the work of a sophisticated gang operating out of Hong Kong and Taiwan. The credit on the checks was being reversed and BCCI would have to eat the loss of almost $3.7 million. Family or not, this was fiscal humiliation. The BCCI brass in London reacted the way bankers everywhere respond to embarrassment and loss of money. Since Awan had accepted the bogus checks and the bank needed a scapegoat, it was decided that he would be transferred out of Panama, even though his three-year tour was not up. And he would be going to work in the bank's representative office in Washington. The office was not a banking operation; rather, its primary job was to serve as liaison with the World Bank. BCCI was working with the World Bank in its capacity as banker to many Third World nations, which received development loans from the World Bank. The BCCI representative office was in the headquarters building of First American Bank, the new name of Financial General.