Cruise

SENATOR John Kerry (D., Mass.) is currently a Washington hero for uncovering the nefarious deedsof the Bank of Credit and Commerce International. The villains--the folks being investigated in Congressand savaged in the press-are Justice Department and Federal Reserve functionaries who supposedly failed to crack down on the bank.

But how heroic is Senator Kerry really? When his investigation got too close, BCCI shut it down with relative ease.How it did so illustrates something abouthow Washington works.

In 1988, Panamanian defector Jose Blandon, formerly Manuel Noriega's right-hand man, testified that Colombian drug money was being laundered by BCCI in Panama and the United States. Kerry's subcommittee--theSenate Foreign Relations subcommittee on terrorism, narcotics, and international operations--voted to subpoena BCCI's records on its Panamaoperations and summon BCCI officials to testify. Had the investigation proceeded with appropriate speed, BCCI might have been shut down three years ago--with many millions of depositors' money saved.

But there weretwo major delays. The first has been well publicized. Congressional action was postponed several months to avoid compromising a Customs--Justice Department undercover investigation of the bank's money laundering. Thatinvestigation duly produced eight arrests of BCCI employees in Tampa in October 1988.

The second delay was more serious and less justified. When subpoenas were issued tobring documents and witnesses before the committee, Clark Clifford--Democratic elder statesman, sometime lawyer for BCCI, and Chairman of First American (a U.S. bank secretly and illegally owned byBCCI)--took evasive action. In August of 1988, he convinced Senate Foreign Relations Committee Chairman Claiborne Pell (R., R.I.) toextend the subpoena deadline. Next, he visited Kerry, shortly before hearings were due to begin in September. Kerry's office claims Clifford simply assured the senator that BCCI was squeaky clean and happyto cooperate. Even if that were so, Kerryshould have challenged the claim in light of Blandon's testimony and reports his staff had collected about BCCI's ownership of First American.

In any case,after Clifford's visit, Kerry canceled the planned hearings; they were never rescheduled. The following spring, for reasons which are still mysterious, Kerry dismissed Jack Blum, his chief investigator. Blum--a portly fifty-year-old attorney, aveteran of the Senate's ITT-Chile investigation of the Seventies, variously described by co-workers of both parties as a Sherlock Holmes and an Inspector Clouseau--went on tohelp Manhattan District Attorney Robert Morgenthau break the BCCI case.

John Kerry is an ambitious man. Had hekept the investigation alive, it would have boosted his career tremendously. Unstead, for over two years he made desultory attempts to get First American todeliver the subpoenaed documents. Only when other investigators--the Federal Reserve and the Bank of England as well as Morgenthau--came out with fines and indictments did he manage to hold further hearings, in August of 1991. Why didKerry drop the ball?

From the beginning, Kerry seemed to view his subcommittee's investigations asa political football. When he brought Blum on board in early 1987, he was probing for evidence of drug-running by the anti-Communist Nicaraguan resistance. Geryld Christianson, Claiborne Pell'schief staffer for the Foreign Relations Committee, says that though Pell had "aphilosophical aversion to having investigations done by his committee," he agreed to fund Kerry's probe to see "whether or not President Reagan may have been suppressing law enforcement for foreign-policy considerations."

Kerry and Blum spent a year tracking downevery leftist conspiracy theory along these lines, including the bizarre claims, emanating from the far-Left Christic Institute, of a thirty-year CIA-run drug ring that virtuallycontrols the U.S. Government. The claims would later be smirked at even by Mother Jones. Havingspent over a hundred thousand dollars to bring an assortment of Latin American rogues and Communists to Washington, to absolutely no avail, Kerry was becoming a laughing-stock, attacked by Republican subcommittee members like MitchMcConnell (R., Ky.) for irresponsible partisan use of the constitutional investigative powers, and losing the respect and trust of his own party.

This is not how congressional investigations are supposed to work. According to the conventional scenario, based on Watergate, the bizarre accusations and questionable testimony are picked up by thepress, repeated, perhaps even substantiated. The committee's subpoena power and the press's lack of responsibility combine for maximum information gathering or innuendomongering, while the committee's official imprimatur and the press's nominal objectivity lend credibility to the allegations. But Kerry had chased rumors too absurdeven for Washington. In a city where appearance is all, this is fatal.

In part, Kerry had fallen prey to the intrinsic problem of conspiracy theories: the overwhelming majority of them are not true, and Occam's Razor will reject the true-but-improbable along with the false. A good investigatior ispart genius, part crank: to ferret out one genuine conspiracy, he will pursue a thousand imagined ones. Jack Blum fitsthe bill.

Flights of Fancy

BLUM AND Kerry now decided to switch the focus ofthe investigation. Blum finally listened to the staff of Senator Jessee Helms (R., N.C.), who say they had been steering him away from the Christiclunacy and toward investigations which they had been engaged in, and which Senator Christopher Dodd (D., Conn.) declined to pursue when the Democrats gained control of theSenate in 1986. It was these staffers who put him in touch with Jose Blandon. In other words, the only real breakthrough John Kerry ever provided on BCCI was actually supplied to him by the Left'sbete noire, Jesse Helms.

With their funds and credibility running out, Blum and Kerry now scheduled hearings with Blandon--and they struck paydirt, linking Noriega to the Colombian cocaine cartels. They onlyincidentally stumbled on BCCI, the middleman. More enticing was othertestimony linking Noriega to the CIA--which all good conspiracy theorists know is linked to George Bush. Pell duly authorized Kerry's investigations for another year.

Later, when the hearings began to gothe wrong way, Pell shut them down. Geryld Christianson faults Blum for this. He blames Blum for delaying the subpoenas for four months (as requested by the Justice Department), pointing out that heand Pell only gave BCCI a one-month extension.Anyway, how long can you drag investigations out? "Someone like Jack would still be investigating today because he would bet sidetracked." On the other hand, says Christianson, "if some vital earth-shaking revelation had been produced by Blum's investigation, Senator Pellwould have extended it" for another budget year. A reasonableinterpretation is taht Pell was willing to reauthorize hearings in 1988 because any charge could be believed of Reagan, Bush, and the Contras. Not so of BCCI and Clark Clifford in 1989.

Meanwhile, Blum did get somewhere byproceeding on his own. According to documents filed in Miami Federal District Court, at the time Kerry canceled the September 1988 hearings,Blum had enough to make Clark Clifford very nervous indeed. Noriega'sbanker, Amjad Awan of BCCI's Tampa branch, told an undercover Customs agent that Clifford and/or his partner, Robert Altman, persuaded and aided him to attempt to leavethe country to avoid a subpoena. Before Awan could leave, he was caught by the October 1988 Customs--Justice sting against BCCI/Tampa. Clifford and Altman have denied telling Awan to flee (obstructing a congressional investigation would constitute afelony).

Kerry's justification to Blum for canceling those hearings, says Blum, was that partisan politics would paralyze the committee during an election year: "with Noriega as a majorissue in the presidential campaign, Senator Kerry thought the political environment was too tough." But this explanation is feeble: notonly was Noriega never a major campaign issue, but Kerry's probe was becoming bipartisan, the BCCI-Clifford connection replacing the Noriega--CIA-Bush one. To be sure, Kerry and Blum violated bipartisan protocol by failingto inform Republican committee members and staff thatthey had uncovered this second front. Eric Felton reports in the September 9, 1991, Insight that, when deposing Awan on September 30, 1988, Blum avoided mentioning Clifford, First American, or the warning to flee the country--even though he was aware thatAwan could give testimony damning Clifford.