Van Raab Blames Treasury for BCCI

Ex-Customs Chief Says Officials Ignored His Warnings

William von Raab, the former commissioner of the U.S. Customs Service, blames the federal bureaucracy, especially the Department of the Treasury, for allowing the the Bank of Credit and Commerce International scandal to occur.

He claims that he spotted the problem long before anyone else did, but was ignored. In fact, he now claims, he resigned as commissioner of Customs in 1989 because he thought Treasury and other agencies had brushed aside his concerns about BCCI.

Mr. von Raab now works in Washington as an attorney. A Yale graduate, he received a law degree from the University of Virginia in 1966. He joined Customs in 1981.

Last week he spoke to the National Press Club. The Washington bureau's Bill Atkinson was among those asking him questions.

American Banker: Are we open to other scandals like BCCI? William von Raab: Yes, we are, with some reservations. There is no mechanism to prevent this kind of thing from happening again. I mean, a lot of the sleeping types - the Federal Reserve and other people - are now awake. But they would respond in a very wooden and unsophisticated way, because there is no mechanism to pull this [an international investigation] together.

AB: Who's to blame for BCCI? WvR: I lay the blame largely at the feet of the Treasury Department, because it is the banking-policy executive branch group. One of the problems of this case was there were no high-level people involved in it. The White House didn't even know this happened. Brady [Treasury Secretary Nicholas Brady] was completely out to lunch. He didn't even know what was going on.

AB: Was the Fed out to lunch too? WvR: I'm not sure. I had lunch on a regular basis with a senior Fed official and I used to tell this individual about what was going on. I didn't tell him about First American. One of the problems we [Customs] had ... was finding out who was responsible for this bank. Nobody knew who was responsible.

AB: You accuse official Washington of letting itself be wooed by influence peddlers. Who are the officials? WvR: It is hard to sort them out. Those who have been flattered would be the Carters [former President Jimmy Carter]. Those who have been paid is obvious: the PR firms . . . a bunch of lawyers. There are certainly people out there who are being investigated pretty seriously who made a lot of money out of this.

AB: Are you referring to Clark Clifford and Robert Altman? WvR: I'm saying it's possible that they were corrupted by their experience. They certainly started off by being flattered. Before they realized it, they were making a fortune. The question for the courts to decide is whether they ever crossed the line.

AB: Do you consider yourself a whistle blower? WvR: I don't think of myself as whistle blower. . . . I'm just a candid commentator.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.