BCCI AND KISSINGER ASSOCIATES

Introduction
Beginning in the fall of 1986, and continuing through
early 1989, BCCI initiated a series of contacts with
perhaps the most politically prominent international
and business consulting firm in the United States --
Kissinger Associates.

At the time, Kissinger Associates had five partners:

former Secretary of State Henry Kissinger, former
Assistant and current National Security Advisor Brent
Scowcroft, former Under Secretary and current Acting
Secretary of State Lawrence Eagleburger,
international economist Alan Stoga, and investment
bank T. Jefferson Cunningham III.

Ultimately both Stoga and a retired Brazilian

Ambassador working as a consultant to Kissinger
Associates, Sergio Correa da Costa, seriously
explored finding ways to link BCCI's global network of
banks with the services being offered by Kissinger
Associates. Discussions between representatives of
BCCI and representatives of Kissinger Associates took
place over an 18 month period concerning the
possibility of merging the capabilities of BCCI and
Kissinger Associates on various, mostly unspecified,
projects. Following BCCI's indictment, discussions
continued as to whether Kissinger Associates could
help BCCI respond to the ramifications of that
indictment. These discussions ended in early 1989 at
Henry Kissinger's personal insistence.

During the discussions, Stoga provided advice to

BCCI on a possible public relations campaign. At their
conclusion, Kissinger Associates referred BCCI to one
its own directors, former Assistant Secretary of State
William Rogers, and his firm, Arnold & Porter, who
already represented Kissinger Associates on its own
legal work. Rogers and Arnold & Porter in turn agreed
to provide BCCI with legal services arising out of its
indictment, although few services were provided as a
consequence of the opposition of Clark Clifford and
Robert Altman to the firm's involvement.

Although discussions concerning a broader

relationship were cut short by the indictment, the
BCCI-Kissinger Associates correspondence reveals
much about BCCI's approach to seeking political
influence in the United States. The correspondence
also highlights BCCI's focus on doing business with,
and ability, given its $23 billion in reported assets
and 73 countries of operation, to attract interest
from, some of the most politically well-connected
people in the United States.

Genesis of Interest in BCCI-Kissinger

Relationship

And Position Of Kissinger Associates

Concerning BCCI
In late July, 1991, the Subcommittee received
documents from BCCI's liquidators describing BCCI's
use of a retired Brazilian Ambassador, Sergio da
Costa, as a front-man for its purchase of a bank in
Brazil while da Costa was also working -- according to
the BCCI documents -- as a partner in Kissinger
Associates.

In September, 1991, staff was advised by press that

there were a number of documents at BCCI's
document depositories concerning its relationship
with Kissinger Associates. Staff were provided some
of these documents by reporters, and found others in
subsequent reviews of BCCI documents at its former
offices in New York. These documents, on both
Kissinger Associates and BCCI stationery, discussed
in general terms the services Kissinger Associates
might perform for BCCI, and were dated both before
and after BCCI's indictment on drug money
laundering charges in Tampa. Accordingly, they
raised the question of whether Kissinger Associates
had ever been retained by BCCI.

In November, 1991, the Committee on Foreign

Relations authorized a subpoena for all documents to
Kissinger Associates and related entities, for all
documents pertaining to BCCI, and for its client lists.

In response, Kissinger Associates promised to

cooperate with the Subcommittee investigation and
to provide all documents pertaining to BCCI, under
an agreement that the subpoena not be served.
Kissinger Associates refused, however, to provide the
client list, arguing that the list was beyond the
parameters of the investigation into BCCI by the
Subcommittee, and advising the Subcommittee that
if it pursued the list, Kissinger Associates would
litigate the matter, if necessary, through an
extensive appellate process to the Supreme Court.
In providing several dozen documents material to the
Subcommittee investigation on January 30, 1992,
Kissinger Associates, represented by its attorney,
former Presidential counsel Lloyd Cutler, made the
following representations:

At the outset, it should be made clear that Kissinger

Associates, Kent Associates, and China Joint Ventures
(collectively referred to hereinafter as "Kissinger
Associates") have never represented or provided any
services for BCCI, ICIC, or any BCCI shareholder.
Neither BCCI or ICIC nor any person known to be a
BCCI shareholder has ever been a client of Kissinger
Associates.

The only substantive contact between Kissinger

Associates and BCCI occurred in late 1988-early
1989, when [BCCI officer] Abol Helmy met several
times with Alan Stoga of Kissinger Associates to
discuss a possible consulting arrangement for BCCI . .
. In December, 1988, Mr. Stoga advised Mr. Helmy
that Kissinger Associates was not interested in a
consulting relationship with BCCI. At Mr. Helmy's
request, Mr. Stoga met with Mr. Helmy again in
January, 1989, at which time in response to a further
inquiry from Mr. Helmy he again advised Mr. Helmy
that Kissinger Associates did not want to proceed
with a relationship. In February 1989, in response to
Mr. Helmy's request for a recommendation for
Washington-based legal counsel, Mr. Stoga
recommended Arnold & Porter. Mr. Stoga has had a
number of other meetings with Mr. Helmy since
February, 1989, but these meetings have been of a
purely social nature.(1)
While this account of the relationship is not untrue, it
does fail to characterize the full extent of the
contacts between BCCI and Kissinger Associates and
the series of meetings and contacts between
representatives of the two organizations. In fact, both
Stoga, as a partner of Kissinger Associates, as well as
its consultant, da Costa, worked over an extended
period to bring the two organizations together, and
such a relationship could well have developed but for
BCCI's drug money laundering indictment. The
following account, while not necessarily complete, is
intended to provide a fuller picture of the contacts
between BCCI and Kissinger Associates, of BCCI's
goals and intentions in soliciting the relationship with
Kissinger Associates, and of the assistance, albeit
limited, provided to BCCI by Kissinger Associates in
BCCI's time of trouble.

Background: BCCI and Ambassador Sergio da

Costa
In the fall of 1986, Sergio da Costa, the most senior
member of the Brazilian diplomatic corps and a close
associate of then Brazilian president Jose Sarney,
decided to retire at the age of 67 after four decades
of serving Brazil as its Ambassador to such
significant postings as England, Canada, the United
Nations, and the United States. Da Costa was
anxious to enter the private sector, and ultimately
accepted offers from three organizations. Da Costa
would move to Paris and set up an office there as a
consultant to an international law firm, Coudert
Brothers. He would simultaneously also work for
BCCI, on a monthly retainer. And he would become a
consultant to Kissinger Associates, for a third
monthly retainer.

At the time, BCCI already knew Ambassador da Costa

well. Months earlier, he had provided BCCI with
advice on selecting possible front-men for BCCI's
intended acquisition of a bank in Brazil. Under
Brazilian law, foreign banks were not permitted to
own a majority interest in any Brazilian bank.
Accordingly, BCCI had decided to buy a Brazilian
bank, purchase a minority interest in the bank
openly, and hold additional shares to guarantee
BCCI's control of the bank through cooperating
Brazilian nominees, in what was essentially a
conspiracy to circumvent Brazilian banking laws.

Da Costa was extremely politically well-connected in

Brazil. He had been brought to BCCI by BCCI
shareholder and front-man Ghaith Pharaon, who in
late April, 1986 had met with Da Costa in Miami to
seek Da Costa's help in responding to the problems
posed for BCCI in circumventing the Brazilian bank
laws. A telex from Miami branch manager Abdur
Sakhia to BCCI-London on May 6, 1986 described the
meeting having ended positively for BCCI:

Ambassador Da Costa has promised Dr. Pharaon to

assist the Bank in any way he can and he also had
asked Mr. Ferreira [a prominent Brazilian
businessman close to President Sarney] to use his
association with the President of the Republic to
assist BCC.(2)
By September of 1986, da Costa had agreed to
himself become a front-man for BCCI in Brazil. In
return, BCCI agreed to pay him $150,000 a year, with
no further responsibilities beyond being a front-man
and using his influence to help BCCI with Brazilian
authorities in Brasilia, the capital city.

Under the terms of the arrangement, da Costa

agreed to be a director and shareholder, secretly
acting as BCCI's nominee, of the bank BCCI was
purchasing in Brazil, in a transaction structured by
BCCI officer Abol Helmy, who later himself had a
series of contacts with Kissinger Associates.

Helmy drafted a memorandum, "Strictly Private and

Confidential," regarding "Brazil," on September 2,
1986, under which da Costa and a second prominent
Brazilian would each own 50 percent of a Brazilian
company that would buy 12,622,500 voting ordinary
shares in BCCI Brazil, pledge those shares to BCCI,
give BCCI the right to vote its shares, and give BCCI
the right to buy those shares. Da Costa would agree
to serve on the three man board of directors as
BCCI's front-man, to guarantee BCCI control of the
bank. He would 'pay' $1,233,580 for his 'share' of
BCCI Brazil's stock, and BCCI would reimburse him
that amount in New York. The internal BCCI
memorandum drafted by Helmy makes explicit the
fact that these arrangements were designed to
deceive Brazilian authorities:

It must be emphasized that the Brazilian economy

and bureaucracy are highly sophisticated. As such
any payments made by Brazilians must have the
appropriate ORIGINATION OF FUNDS. That is, the
Brazilian 'investors' must have the necessary net
worth for Brazilian taxation authorities' purposes to
support any investments made. . .

Messrs. Da Costa and Leoni to ensure that the

transaction is fully acceptable to the Central Bank
and to ensure that there are no adverse public
consequences will be purchasing their shares in cash.
..

Both Ambassador Da Costa and Mr. Leoni are

reluctant to take loans from any bank to finance the
transaction for Central Bank and public image
purposes . . . I have negotiated, subject to BCC
management approval, an interest free loan to the
individuals concerned . . . to enable them to
complete the transaction.(3) (emphasis in original)

The memorandum demonstrated that BCCI would

provide da Costa with $2,467,160 for the purchase of
his stock in BCCI Brazil, every penny the stock would
cost. In a staff interview, Helmy acknowledged that
da Costa was not at risk and that the transaction was
a standard nominee arrangement by which BCCI
circumvented local laws and that this approached
had been used a numerous of times previously by
BCCI. Helmy also said it was BCCI's understanding
that da Costa would take care of arrangements with
Brazil's central bank and other Brazilian officials to
make sure that they acquiesced in the transaction as
structured.(4) Thus, in essence, Helmy at BCCI and da
Costa, while still Brazil's Ambassador to the United
States, had with other BCCI officials and other
prominent Brazilians, created a plan by which they
would together make possible BCCI's purchase of a
bank in Brazil to circumvent Brazilian law.

BCCI officials were ecstatic at da Costa's participation

in their plan for Brazil, and his agreement to be a
Senior Advisor to BCCI. On October 28, 1986, while
da Costa was still Brazil's Ambassador to the United
States, the head of BCCI's Miami office, S. M. Shafi,
sent him a congratulatory telex at the Embassy:

congratulations from myself and my colleagues on

your joing [sic] our Brazilian project. We welcome you
to the fold BCC family. I am very certain your
experience, qualifications and contacts not only in
Brazil but also internationally will go a long way in
turning our subsidiary in Brazil into one of the most
successful units of BCCI.(5)

Da Costa signed a three-year consultancy agreement

with BCCI on November 3, 1986, under which he
committed to acting as "Director of [BCCI's]
investment bank in Brazil," and a front-man for BCCI
there.(6) Da Costa then followed through in
participating in the plan developed by Helmy under
which BCCI would secretly purchase a majority
interest in BCCI Brazil through nominees. He received
his 'loans,' from BCCI, and purchased his 'stock' in
the Brazilian bank. BCCI duly reported its loans to
him on its books in Panama, characterized as
"International Loans," as if they were normal loans
that BCCI anticipated would be repaid. By April 30,
1988, da Costa's 'loans,' from BCCI amounted to
$1,563,723.85. In fact, da Costa did not pay interest
or principal on the loans, which were shams to mask
BCCI's ownership of the 'da Costa' shares of the
bank.

Among themselves, BCCI officials were also pleased

about another aspect of being connected to da
Costa. As he entered his agreement with BCCI to
circumvent Brazilian banking laws, he had told them
that he was also joining Kissinger Associates. A BCCI
telex that circulated in New York and London in early
December, 1986 described da Costa's principal work
to now be as a partner in Kissinger Associates, with
BCCI understanding the Coudert Brothers work, by
comparison, as merely a consultancy.

Da Costa and Kissinger Associates

In September, 1986, while da Costa was
negotiating the terms of his consultancy with
BCCI, he also reached out to determine if he
could reach a similar relationship with Henry
Kissinger. In early September, he sent
Kissinger a copy of a biography he had written,
"Every Inch a King," concerning Brazilian
emperor Dom Pedro I.

In November, 1986, da Costa and Kissinger

concluded their discussions concerning the
services da Costa would provide Kissinger
Associates. Letters between da Costa and
Kissinger, dated November 3, 1986, set forth
the terms of their agreement, under which da
Costa would be paid $40,000 a year as a
consultant to Kissinger Associates, plus a 10
percent to 20 percent fee for putting together
transactions for Kissinger Associates. The
letters show that Kissinger sought an
agreement from da Costa that he would work
only for Kissinger Associates and for Coudert
Brothers, and that da Costa told Kissinger in
return that he would also be working for BCCI,
as he and Kissinger had previously discussed.
As da Costa wrote Kissinger:

From our brief conversation, I gathered that

you had in mind, basically, the Brazilian
"market", i.e. you would expect me to channel
through Kissinger Associates whatever Brazil-
related project is secured by me. . . What
concerns me is the case of companies that
have already indicated their firm intention of
retaining my services as consultant under a
permanent retainer agreement soon after
November 1st . . . There is particularly the case
of B.C.C.I., mentioned to you when we first
discussed our association. They not only wish
to retain me as a permanent consultant, but
insist that I become member of the Board and
shareholder of their Brazilian operation,
obviously seeking to benefit from my standing
in the country. . . In short, since we are both
acting in good faith and are reasonable men, I
cannot even visualize a possibility of
discomfort in our business relationship. I am
convinced that a simple reflection in a side
letter like this would be far better than any
attempt at spelling out a paragraph on the
exact meaning of "exclusivity."(7)

Kissinger accepted da Costa's simultaneous

involvement in acting as a consultant to
Kissinger Associates and BCCI, and da Costa
signed up for a two-year commitment.

On December 8, 1986, da Costa received the

first of a series of payments of $12,500 a
month from BCCI Grand Caymans to his
account at BCCI's agency in New York for his
consultancy to BCCI. In the same period, he
received the first of a series of payments from
Kissinger Associates of $10,000 a quarter.

Beginning in early 1987, da Costa began to act

as a business agent for Kissinger Associates in
Brazil on projects involving purchases of
companies, plants, or assets in Brazil by
foreign companies. During 1987, he made
several trips to Brazil on behalf of Kissinger
Associates, and attended in the summer of
1987 what he described in a letter to Kissinger
Associates as "that amusing luncheon with the
BNL crowd," referring to a meeting with people
involved in the Banco Nationale del Lavaro, an
Italian bank from whom Kissinger was a
consultant, and which has recently been under
investigation by the House Committee on
Banking, Finance and Urban Affairs for its role
in the illegal arming of Iraq using U.S.
commodity credits.(8)

Da Costa, Kissinger and Ghaith Pharaon

On September 20, 1987, da Costa wrote
Kissinger to invite him to a party hosted by
BCCI front-man Ghaith Pharaon, suggesting
that Kissinger might want to obtain Pharaon as
a client for Kissinger Associates:

I was asked to convey an invitation of Dr. Gaith

Pharaon to a dinner at his plantation at
Richmond Hill, Georgia, Saturday October 31st.

Although with residences in Paris and in Saudi

Arabia, his real "home" seems to be the River
Oaks Plantation, which once belonged to Henry
Ford. His main local asset was the National
Bank of Georgia, which he recently agreed to
sell to First American Bankshare Inc of
Washington DC for some $230 million. I believe
that the latter bank is owned by the main
shareholders of BCCI, of which Pharaon was or
still is a shareholder . . .

As [Pharaon] admires you intensely and has a

wide range of business interests in the US, I
have thought of him for some time as a
potential client. Hence my acquiescence to
forward the invitation.(9)

In October, 1987, while da Costa was seeking

to put together an acquisition of a plant in
Brazil involving the New York firm of Kohlberg
Kravis Roberts & Co., ("KKR") on behalf of
Kissinger Associates, he wrote Lawrence
Eagleburger and Alan Stoga, again referencing
his invitation to Kissinger to attend the
Pharaon dinner with da Costa.(10) However,
Kissinger declined the invitation.
 Da Costa Introduces BCCI to Kissinger
Associates
On May 28, 1987, da Costa decided to
introduce BCCI acquisitions officer Abol Helmy,
who had crafted BCCI's purchase of the bank in
Brazil, and da Costa's participation as a BCCI
front man, to Kissinger Associates partner Alan
Stoga. A chronology provided the
Subcommittee by Kissinger Associates'
attorneys, and apparently prepared by Stoga
in November, 1991, describes the meeting as
follows:

Da Costa introduces Abol Helmy to Stoga

without any specific purpose. Helmy is
described as responsible for BCCI's
acquisitions in Latin America.(11)

According to the Stoga chronology, on June 10,

1987, Stoga met Helmy again to discuss the
possibility of a relationship between Kissinger
Associates and BCCI. According to the Stoga
chronology, no specifics of the relationship
were discussed.(12)

On August 26, 1987, Pakistan's former

Ambassador to the United States, Sultan M.
Khan, who now worked at BCCI's
representative office in Washington, D.C.,
wrote Kissinger, on BCCI stationery, to invite
Kissinger to attend a dinner he and BCCI were
hosting, honoring the leader of the Chinese
delegation to the annual International
Monetary Fund dinner. Although Khan had
worked closely with Kissinger when he was
U.S. Secretary of State and Khan was
Pakistan's foreign minister, Kissinger declined
the invitation.(13)

The Stoga chronology shows no further

meetings between Stoga and Helmy until
September, 1988. However, Helmy told
Subcommittee staff that he had a series of
meetings in this period with Stoga regarding
possible links between BCCI and Kissinger
Associates. Moreover, a November 2, 1988
letter on Kissinger Associates letterhead from
Stoga to da Costa states, "I have been in
regular contact with Abol Helmy for more than
two years and, during that time, we have
discussed the possibility of a consulting
relationship [by Kissinger Associates for BCCI]
several times."(14)

Helmy and Stoga's Attempts to Develop

Business Between Kissinger Associates and
BCCI

Helmy viewed his meetings with Stoga as a

means to engage in business development for
BCCI, and believed that Stoga also believed
that it could be to both of their benefits within
their respective organizations to provide one
another with business.(15)

This process moved forward slowly, and it was

not until October 7, 1988 that Stoga sent
Helmy and BCCI written material from
Kissinger Associates describing the nature of
their business and the possible benefits to
both organizations of a relationship. As Stoga
wrote Helmy:

I enjoyed lunch yesterday and, even more, your

suggestion that BCCI might be interested in
developing a relationship with Kissinger
Associates.

As you suggested, I am enclosing a brief

explanation of our firm and biographical
sketches of our principals. I am not sure the
former really does us justice, but I am
reluctant to be more specific, at least on paper,
about the kinds of consulting projects we
undertake for clients. . .

I agree that a next step should be for me to

meet your [BCCI's] management in London or
in New York.(16)

The materials enclosed by Helmy, and

retrieved later by Subcommittee staff at BCCI's
offices in New York, consisted of a six
paragraph summary of Kissinger Associates
approach to its business, and a two page
biographical summary of its partners'
credentials. According to the summary:

Kissinger Associates' purpose is to utilize the

diverse backgrounds, experiences, contacts,
and relationships of its senior personnel to
assist client companies in sorting through and
coming to terms with the increasingly
complicated international environment. . . The
firm does not provide detailed written
materials to clients, in large part to assure the
confidentiality and the frankness of
communications.(17) (emphasis in original)

Less than one week later, BCCI was indicted in

Tampa, prompting an immediate memorandum
from Helmy to Swaleh Naqvi, then BCCI's chief:

Further to our recent conversation in London, I

met with Mr. Alan Stoga who is one of the 3
partners of Kissinger Associates, Inc.
Subsequently, the developments in the United
States took place. Judging by the high level of
adverse publicity that is being generated by
the media, it is imperative that a firm response
be made.

I received a call today from Mr. Stoga who

informed me that Dr. Kissinger recommends
that a public relations offensive be made by us
and in that context has suggested using
Burson-Marstellar, a highly reputable public
relations firm that successfully dealt with 1st
Chicago crises last year. Kissinger Associates,
Inc. have indicated that they shall be happy to
use their personal contacts with the firm and
make the necessary recommendations. I shall,
of course, not proceed in any way without
explicit instructions from you.(18)

The next day, Helmy sent another

memorandum to Naqvi, enclosing the materials
he had received from Stoga concerning
Kissinger Associates and advising Naqvi that
he would meet with Stoga on October 14.
Helmy and Naqvi then discussed the overture
to Kissinger Associates by telephone, evidently
to discuss the qualms that Kissinger Associates
might have to working with BCCI now that it
had been indicted. Following Helmy and
Stoga's next meeting, Helmy reported back to
BCCI London as follows:

I just met with Mr. Alan Stoga, Dr. Kissinger's

partner, and discussed the relevant matters as
per our phone conversation of yesterday.

I emphasized to Mr. Stoga that our

conversations in getting our two respective
organizations together have been going on for
over a year and hence, have not been
generated as result of the present
circumstances.

I feel that a relationship could be established

in the near future depending on how fast the
present publicity ends.

I shall keep you duly informed of my next

meeting with Dr. Kissinger himself which
should be sometime next week.(19)

The correspondence makes clear Helmy's

desire to secure this important relationship for
BCCI as a means of helping BCCI reduce its
current problems in the United States, and as a
means for Helmy himself to increase his power
within the BCCI organization.

While Helmy pursued the relationship from his

office at BCCI New York, da Costa in the
meantime also tried to push a relationship
forward. Kissinger Associates had decided to
end his consultancy in September as a
consequence of his not having developed
enough business in Brazil to justify his $40,000
a year stipend, and sent da Costa a letter to
that effect which he evidently did not receive.
In the meantime, Helmy had contacted da
Costa to seek da Costa's assistance in
reassuring Kissinger Associates that BCCI was
truly an ethical institution.

On October 25, 1988, da Costa wrote

Eagleburger and Stoga to remind them that the
discussions to link the two organizations went
back many months and were not prompted by
the indictments:

On two or three different occasions last year

and early this year, I suggested to BCCI to seek
the assistance of K.A. [Kissinger Associates] to
obtain their assessments worldwide and
particularly regarding the Untied States. The
suggestion was well received and matter
virtually cleared six months ago. However, the
situation created by the serious heart
condition which stroke [sic] BCCI's president
and founding father delayed the
implementation until September 29th when I
was asked to a meeting in London.
During the meeting, a few questions were put
to me as to the type of work that KA did
normally for their clients and the Deputy
Chairman [Naqvi] indicated that instructions
would be promptly sent to Mr. Abol Helmy in
new York to approach KA and negotiate a
contract.

That was Thursday September 29th. Thirteen

days later, October 12th., the blow of the
accusation for money-laundering, of which the
bank expects to be entirely cleared, having
offered the fullest cooperation with the
investigators.

Mr. Abol Helmy has already contacted Alan

Stoga last week and asked me to refer to the
early conversations held at the bank about my
recommendation, not to appear that he is
seeking support in a moment of distress. . .

Perhaps you could start talking to Mr. Helmy in

the clear understanding that a contract would
be signed only after you had the opportunity to
ascertain - to your satisfaction - that the
procedures adopted by the bank to defend
itself from the allegations are adequate
enough.(20)

In response, Stoga wrote da Costa November

2, 1988. The letter from Stoga to da Costa was
not to advise him that Kissinger Associates
was sufficiently concerned about BCCI's drug
money laundering indictments to preclude a
relationship. The letter instead politely advised
da Costa that as far as Stoga was concerned,
the prospective relationship was Stoga's, not
da Costa's, and that da Costa was not welcome
to participate in further discussions between
BCCI and Kissinger Associates. As Stoga wrote
da Costa:

Thank you for your fax regarding BCC. After

your kind introduction, I have been in regular
contact with Abol Helmy for more than two
years and, during that time, we have discussed
the possibility of a consulting relationship
several times. Abol raised this issue again in
September saying that he was urging Mr. Naqvi
to consider hiring us. Helmy did not mention
your involvement during any of these
discussions and said he, too, was surprised by
your fax.

I am not sure how we will proceed with respect

to BCC, but I will remain directly in contact
with Abol.(21)

Da Costa acknowledged Stoga's position and

had no further involvement with Kissinger
Associates until December, when he wrote to
remind the firm that he had not received his
quarterly stipend, and was told that his
consultancy was at an end, other than on a
case-by-case basis should da Costa generate
transactions for Kissinger Associates. Da Costa
replied with a fax transmission to Kissinger,
thanking him for being welcomed to Kissinger
Associates "at that precise moment when I was
leaving a life-long protected life to explore on
my own the other side of the fence," and
promising to do his best to generate more
business in Brazil on a case-by-case basis in
the future.(22)

Kissinger Associates Says No to BCCI, Provides

Legal Referral
Kissinger Associates determined to take its
time in considering the risks and benefits of
any relationship with BCCI, with Kissinger
himself apparently taking the view throughout
that the relationship was not worth having,
while Stoga sought to continue to explore it.

The chronology provided the Subcommittee by

Kissinger Associates states that Stoga
telephoned Helmy in December to advise him
that Kissinger Associates would not be
interested in any relationship with BCCI, but
that Helmy requested another meeting with
Stoga "after holidays to discuss."(23)

BCCI files tell a different story. According to a

December 19, 1988 memorandum from Helmy
to Naqvi, he continued to be in communication
with Stoga about the proposed relationship,
and continued to anticipate that they would
work something out despite the drug money
laundering indictment:

I am in communication with Mr. Alan Stoga,

Partner of Kissinger Associates, Inc. Their
response was they are interested in principal
but would like to wait a bit longer. I will be
meeting Mr. Stoga in the first week of January,
1989 and will be discussing the issue further. It
would be of interest for you to know that Mr.
Scowcroft is now the National Security Advisor
Designate in the Bush Administration and
another Partner of Kissinger Associates is
being tapped for Assistant Secretary of State
in the Bush Administration. I shall keep you
informed of my next meeting. You may agree
that this association with Kissinger Associates,
Inc. needs time to be cultivated. I am working
in that direction.(24)

Evidence of what Helmy was referring to is a

proposal which Kissinger Associates found in
its files from Helmy to Stoga, dated January 9,
1989.

The proposal refers to a California bank known

by Stoga to be available for a price of $76
million, a price which he estimated was less
than 10 times the bank's expected earnings.
The bank was for sale, and if Kissinger
Associates could find a buyer, there was an
opportunity for everyone to make money.
Helmy provided Stoga with a 17 page outline
for the proposal transaction, and asked him to
consider it.

The proposal revealed that the bank involved

was the Independence Bank of Encino, held by
BCCI shareholder and front-man Ghaith
Pharaon.

There is no record that Helmy advised Stoga or

Kissinger Associates of what he also knew
about Independence Bank -- that the bank was
secretly owned by BCCI, in arrangements
similar to the nominee arrangements Helmy
had personally crafted for da Costa in Brazil.
Helmy himself may not have known
Independence Bank's other secret -- that at the
time, it was already in the deep financial
trouble that three years later lead to a $150
million bailout of Independence Bank, with
funds lent by the U.S. Treasury, of the Bank
Insurance Fund.

At about this time, in January, 1989, according

to the Stoga chronology, Stoga again met with
Helmy to repeat that Kissinger Associates
would not proceed with a relationship with
BCCI. The Stoga chronology states that Helmy
said he understood that the time was not right
and he hoped if circumstances changed, the
firm would reconsider.

The Stoga chronology is again contradicted by

BCCI files. A memorandum written January 11,
1989 from Helmy to Naqvi, found in BCCI's
Kissinger Associate files in New York, presents
an entirely different picture of the relationship
at this stage:

I had a lunch meeting with the gentleman in

January 5, 1989 and a follow up telephone
conversation on January 10, 1989. It was
established that it is in our interest for both
parties to continue with the conversations. As
such, the door for an eventual relationship
remains open.

They were far more knowledgeable of the

details of our situation during this meeting and
made certain "unofficial" general
recommendations which I shall convey to you
at our next meeting. I am meeting my contacts
senior partner by the end of January with a
view of discussing our overall worldwide
activities.(25)

In staff interviews, Helmy later confirmed that

the memorandum referred to Stoga and to the
"senior partner" to an intended meeting with
Kissinger.

There are four possible explanations of the

difference between Helmy's understanding and
the Kissinger Associates chronology.

First, Helmy could have been wilfully

misleading his superiors at BCCI about the
relationship, although it is hard to understand
why he would do this, persistently, for months,
unless he had in fact received some
encouragement from Stoga. Moreover, Stoga
had in fact continued to meet month after
month with Helmy.

Second, Helmy could have misunderstood what

Stoga was telling him. Again, this would fail to
explain why Stoga continued meeting with him
to discuss these matters.

Third, Stoga could himself have been trying to

keep the door open, despite instructions from
Kissinger to the contrary. There is some
evidence for this from the various memoranda,
including Stoga's later representations as to
what happened. It would be plausible that
Stoga as the most junior member of the
partnership would at the time have had a
greater need than Kissinger himself to take
advantage of BCCI's 73 nation financial
network and reported $23 billion in assets to
generate new business,

Finally, Kissinger Associates as an organization

might at the time have been seeking to keep
its options open concerning a possible
relationship with BCCI, and rewritten history
once BCCI had become notorious. The
documents provided do not either preclude
such a possibility, or prove it.

It is impossible to make a definitive judgment

on this issue because of the remarkable
absence of any contemporaneous documents
concerning Kissinger Associates' rejection of
the relationship with BCCI, at least among the
documents provided the Subcommittee by
Kissinger Associates. While Kissinger
Associates did provide the Subcommittee with
Stoga's November, 1991 reconstruction of what
took place, for better or worse, the only
contemporaneous documents available to the
Subcommittee concerning this issue were
those created by Helmy while he was at BCCI.

However, there is no evidence from any source

that Helmy ever met with Kissinger, as Helmy
had implied he would do in two of his
memoranda to Naqvi. Moreover, there is no
evidence that Stoga took any action to follow
up on Helmy's business suggestions.

It is not contested, however, that Kissinger

Associates did make "certain 'unofficial'
general recommendations" to BCCI, just as
Helmy's January 11, 1989 memorandum stated.

The Stoga chronology shows that Stoga did

stay in contact with Helmy through January,
1989. The chronology states that Helmy asked
to meet with Stoga, and did so on January 25,
1989, when Helmy told Stoga that he was now
in charge of the Tampa legal case, and would
appreciate Stoga recommending new lawyers
for BCCI in Washington.

As Helmy later explained, he, among others at

BCCI, felt that Clark Clifford and Robert Altman
had their own agenda and own problems, and
were not ideally situated to manage the overall
handling of the Tampa case. He had received
authority to try to go around Clifford and
Altman, and was using the best contacts he
had to develop an alternative.(26)

According to the Stoga chronology, Stoga

reported the request for assistance to
Kissinger, and after consulting with Kissinger,
told Helmy he could recommend William
Rogers and a team of lawyers at Arnold and
Porter, which Kissinger Associates had long
used to handle legal matters pertaining to the
firm and its principals. According to the Stoga
chronology, this was "without reference to
HAK," that is, Henry Kissinger. At the time,
Rogers was also on the Board of Directors of
Kissinger Associates.(27)

Referral to William Rogers and Arnold and

Porter
BCCI's records in New York first alerted the
Subcommittee to the possibility that BCCI had
been represented by Arnold & Porter and
former Assistant Secretary of State William D.
Rogers. An undated document maintained in
the Kissinger Associates file at BCCI listed as
BCCI's team of representatives:

FIRM: ARNOLD & PORTER

1. Mr. William D. Rogers

(Formerly Assistant Secretary of State)

2. Mr. Jerry Hawke

(Formerly General Counsel Federal Reserve

Board)

3. Mr. Irv Nathan

(Formerly Deputy Attorney General of the US)

FIRM: Kissinger Associates

1. Dr. Henry Kissinger

2. General Scowcroft

(Presently: National Security Counsel Chief)

3. Mr Eagleburger

(Presently: Assistant Secretary of State

(Designate)

4. Mr. Alan Stoga(28)

The listing of the present and former

government titles of the "team" BCCI was
seeking to assemble gives a clue as to BCCI's
intentions. Consistent with BCCI's historic
approach to responding to its problems, it was
seeking to retain people as close to the heart
of the U.S. government as it could find to fix its
problems, and in its view, this appropriately
included people who worked for the Justice
Department, State Department, and Federal
Reserve.

In fact, while Kissinger Associates did not

perform any services for BCCI apart from its
referral of Arnold & Porter, Arnold & Porter did
agree to represent BCCI, although that
representation never developed into any
substantial activity on the part of the firm.
According to BCCI officers Abol Helmy and
Abdur Sakhia, the principal reason the
representation did not ultimately take hold
was that Clifford and Altman did not want BCCI
to develop any independent representation in
Washington, and squelched the Arnold &
Porter representation. As Sakhia recollected, in
the period after BCCI's indictment:

We had a longish meeting about Kissinger

representing us. I came in late in the meeting,
and the upshot of it was they referred him to
William Rogers. Then Rogers met with Naqvi
and Abedi, but Clifford did not want Rogers
involved.(29)

As Rogers described the representation:

Our relationship with BCCI consisted of about

10 meetings and telephone calls with BCCI
people, one meeting with Messrs. Clifford and
Altman and related office work. The purpose of
the discussions was to explore legal services
that Arnold & Porter might render BCCI. We
geared up to provide services with background
reading and the like. But we did not
communicate on behalf of BCCI with any public
official in connection with any BCCI matter,
either orally or in writing. We made no
appearances on behalf of BCCI in any judicial
proceedings or in any administrative matter.
We did not lobby on behalf of BCCI. And we did
not communicate with any Senator,
Representative or Hill staff.(30)

In all, four Arnold & Porter partners worked on

BCCI matters between June 12, 1989, the date
Arnold & Porter agreed to "provide legal advice
from time to time to BCCI and its affiliates as
and when requested to do so by BCCI," and
January, 1990, including the three referred to
in the BCCI memorandum concerning Arnold &
Porter and Kissinger Associates. The firm did
about $16,000 in legal work for BCCI in all, a
fraction compared with the $20 million BCCI
paid the various attorneys whose services
were managed on BCCI's behalf by Clifford and
Altman.(31)

Further Contacts Between Stoga and Helmy

During the spring of 1989, Abol Helmy,
frustrated in his attempts to wrest control of
BCCI's legal strategy in the U.S. from Clifford
and Altman, and BCCI's unwillingness to take
advantage of the Arnold & Porter
representation he had arranged, decided to
leave BCCI and form his own company, Equicap.

During this period, Helmy had several

meetings with Stoga which the Kissinger
Associates chronology characterized as
"social." Helmy also provided Stoga with copies
of detailed proposals he was working on for a
Brazilian investment fund, which appears to be
a suggestion to Stoga that Stoga help him
solicit possible investors for the fund.
 Response to Press and Congressional Inquiries
In November 1991, after BCCI's global closure,
Kissinger Associates began to receive queries
from the press concerning its contacts with
BCCI. In response to those queries, Kissinger
asked Stoga to reconstruct his contacts with
BCCI. Stoga reviewed the documents
concerning BCCI contained at Kissinger
Associates files that were later provided the
Subcommittee, and prepared a memorandum
to Kissinger on November 11, 1991 that
described the contacts as follows:

The most titillating passage in Helmy's memos

claim I passed along a recommendation from
you about a public relations offensive involving
Burson Marstellar which we would help
facilitate. Another memo implies that he met
you. And another says that we had been
discussing a client relationship for over a year.

To the best of my collection, I did not talk to

Helmy about Burson (which had not been a
client for almost two years at that point), in
particular, or about public relations in general.
The only "advice" I do recall giving is telling
him in an aside that, based on what I read in
the papers, BCCI would be lucky to survive as a
bank in the U.S. unless there was a thorough
house cleaning. And, of course, when Helmy in
February, 1989, asked for the name of a good
lawyer, we referred him to Bill [Rogers].

With regard to meeting you, as you know,

there is no reference on your calendars, you
have no recollection, and da Costa says it did
not happen. Additionally, I asked Helmy (with
whom I developed a social relationship after he
left BCCI) and he says he did not meet with
you.

Finally, I remember that Helmy said when he

approached us in September, 1988 that after
meeting me a year earlier he had begun
thinking about proposing a relationship. He
was concerned that we would think his 1988
overture was a product of the indictment, but
insisted that it was not. At the same time da
Costa -- whose contract had not been renewed
-- sent us a memo which said he had been
having conversations with BCCI about a
relationship with us for some time. If so, he did
not tell us about them until the moment it
looked like a contract might be in the offing.
Then da Costa tried to prove he would deserve
a fee.(32)

Stoga offers no explanation in the

memorandum to Kissinger as to how Helmy
could have set forth the supposed
recommendation to BCCI of Burson Marstellar
from Stoga and Kissinger himself if Stoga had
said nothing concerning the firm. But it seems
less than likely that Helmy would as a matter
of sheer coincidence fabricate the supposed
recommendation by Stoga and Kissinger of a
firm who had indeed been a client. An
alternative theory might be simply that Stoga
did make the recommendation, represented it
as Kissinger's, and failed to recollect it three
years later. A third possibility is that Stoga
chose not to remember the recommendation,
or whether it actually came from Kissinger
himself, given its "titillating" quality.

Helmy was by his own account distraught to

find out that his overtures to Stoga and
Kissinger Associates were about to become
public. As he later told Subcommittee staff, he
had sought to nurture his relationship with
Stoga before while he was at BCCI and since he
had left, considered him a personal friend, and
feared the exposure would damage a
relationship of some personal importance to
Helmy. Helmy understood that exposure of the
BCCI-Kissinger Associates letters could
potentially injure Stoga's standing with
Kissinger himself, and wished to help Stoga out
of a situation which Helmy felt Helmy had
created. Accordingly, after talking with Stoga,
Helmy drafted a letter, dated November 13,
1991, to describe his current view of what had
taken place.

In the letter, Helmy wrote Stoga as follows:

Obviously both you and I are distressed by the

recent articles in The Boston Globe and the
New York Times which discuss my 1988
recommendation to BCC that I retain the
services of Kissinger Associates after BCCI was
indicted in Tampa, Florida.

I am, of course, surprised that a

recommendation that BCCI retain the services
of an organization enjoying the fine reputation
held by Kissinger Associates warrants
publicity, but I suppose that in the current
milieu this kind of thing makes the news too. . .

On the merits, while we were discussing the

possibility of BCCI's retention of Kissinger
Associates, the fact is that you never told me
or led me to believe that Dr. Kissinger himself
actually made any recommendation. Only my
enthusiasm to encourage Mr. Naqvi and BCC
inadvertently resulted in my memorandum
suggesting otherwise. Also, as you told The
New York Times, and to the best of my
knowledge, Kissinger Associates was never
actually retained by BCCI in any kind of
professional, advisory, or any other
relationship. . .

Since no good deed goes unpunished, my

efforts to assist BCCI in gaining the valuable
services of Kissinger Associates, seem, now, to
have caused both Kissinger Associates and
myself a degree of harm for which I apologize
to you and your organization.(33)

Thus, Helmy sought to make clear that Henry

Kissinger himself had never to Helmy's
knowledge been involved in his attempts to
link the two organizations. His letter did not
refer to the one thing that definitely happened
during the course of his discussions with Stoga
-- the initially successful referral of BCCI to
William D. Rogers and Arnold & Porter.
 Conclusion
The solicitation by BCCI of a relationship with
Kissinger Associates was largely based on
personal contacts. It began with overtures by
Ambassador da Costa, a man Kissinger knew
was simultaneously a consultant to Kissinger
Associates and to BCCI. The solicitation then
developed through the burgeoning personal
relationship between BCCI officer Helmy and
Kissinger Associates partner Stoga.

Although Henry Kissinger was never himself

especially interested in this potential client,
BCCI become aggressively interested in
Kissinger Associates because of its political
connections, at a time when BCCI was
struggling for survival.

Following the Tampa indictments, Kissinger

himself recognized the potential risk to the
reputation of his firm should it perform
services for BCCI, and by December or January
instructed Stoga to advise BCCI that no
relationship was possible. Unable to respond to
Helmy's overtures directly, Stoga, with
Kissinger's participation, eventually agreed to
pass BCCI on to William Rogers at Arnold &
Porter as a means of helping Helmy and BCCI,
while protecting Kissinger Associates.

The result was that through the Kissinger

Associates connection, BCCI retained lawyers
who had previously represented the Justice
Department, State Department, and Federal
Reserve, agencies of some relevance to BCCI's
predicament. That relationship failed to
develop not because of any lack of willingness
by Arnold & Porter or Helmy at BCCI, but as the
direct result of Clifford and Altman's need to
maintain control over BCCI's affairs in the
United States.

This story highlights once again BCCI's

consistent strategy of responding to problems
through reaching out to prominent political
figures and retired government officials in
hopes that it could use political influence to
solve its problems. The failure of this strategy
was a reflection of BCCI's own naivete about
how to do business in the United States, the
care which Kissinger himself took to protect
his own reputation in dealing with clients, and
Clifford and Altman's role of primacy in BCCI's
U.S. affairs. BCCI's ability to get its foot in the
door at such politically well-connected
institutions, does, however, raise questions
about the general vulnerability of such
politically well-connected firms to providing
services that advance the secret agendas of
other clients who may be less notorious than,
but equally noxious as, BCCI.

1. Letter, Lloyd N. Cutler to Senator Kerry,

January 30, 1992.

2. Memorandum/telex, Sakhia to Siddiki, May

6, 1986, Senate document.

3. BCCI internal memorandum, Helmy to Ameer

Saddiki, September 2, 1986, Senate document
000653.

4. Staff interview, Abol Helmy, January 12,

1992.

5. Telex, Shafi to da Costa, October 28, 1986,

BCCI Senate Document 000645.

6. BCCI Luxembourg Letter of Appointment,

Ameer H. Siddiki to Ambassador Correa da
Costa, October 28, 1986, Senate document.

7. Letter, November 3, 1987, da Costa to

Kissinger.

8. Letter, Sergio Correa da Costa to Chris Vicks,

Kissinger Associates, August 13, 1987.

9. Letter, Da Costa to Kissinger, September 20,

1987.

10. Da Costa Memorandum to L. Eagleburger

and A. Stoga Re: Kohlberg Kravis Robert & Co
-- KKR; October 6, 1987.

11. BCCI Chronology, January 30, 1992,

provided to Subcommittee by attorneys for
Kissinger Associates.

12. Id.

13. Letter, Khan to Kissinger, August 26, 1987.

14. Letter, Stoga to da Costa, November 2,
1988.

15. Helmy staff interview, January 12, 1992.

16. Letter, Stoga to Helmy, October 7, 1988.

17. Attachment, KISSINGER ASSOCIATES, INC.,

to Stoga letter to Helmy, October 7, 1988.

18. Letter, BCCI New York, from Abol Fazl

Helmy to Swaleh Naqvi, October 12, 1988.

19. Memorandum, BCCI New York, Helmy to

Naqvi, October 14, 1988.

20. Memorandum, Sergio Correa da Costa, to

Kissinger Associates, October 25, 1988, Ref.
BCCI as client of KA, Attention: Mr. L.
Eagleburger, Mr. Alan Stoga.

21. Letter, Stoga to da Costa, November 2,

1988.

22. Letters, Cunningham to da Costa,

December 12, 1988; da Costa to Kissinger,
December 13, 1988.

23. BCCI Chronology, provided to

Subcommittee by Kissinger Associates.

24. Letter, BCCI New York, Helmy to Naqvi,

December 19, 1991.

25. Memorandum, BCCI New York, Helmy to

Naqvi, January 11, 1989.
26. Helmy staff interview, January 12, 1992.

27. BCCI Chronology provided by Kissinger

Associates to Subcommittee.

28. BCCI Document in Kissinger Associates file,

BCCI New York.

29. Staff interview, Abdur Sakhia, October,

1991.

30. Letter, Rogers to Winer, March 3, 1992.

31. Id and attachments.

32. Stoga to Kissinger, November 11, 1991, RE:

BCCI.

33. Letter, Abol F. Helmy to Alan Stoga,

November 13, 1991.