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FBI Director Mueller was at center of alleged BCCI coverup in 1991

Published: May 26, 2009
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Source: RawStory

As the foiled Newburgh "terrorist plot" is increasingly revealed to be little more than a sham, it raises questions about why the FBI would have spent a year furnishing fake weapons and explosives to a bunch of small-time crooks in order to create an ersatz incident. It seems as though the real objective may, at the very least, have had more to do with public relations than with public safety.

The arrests came on the same day as FBI Director Robert Mueller testified before the House Judiciary Committee that bringing Guantanamo detainees to the United States could prove risky even if they were placed in supermax prisons. The risks he cited included such unlikely possibilities as radicalizing other prisoners or continuing to run criminal operations from behind bars.

Because Mueller's testimony has been so widely described as undermining the Obama administration's announced policy of closing Guantanamo, it seems fair to ask whether the FBI director may be following an agenda of his own in ramping up fears of terrorism just as 9/11 hysteria appears to be coming to an end.

As it happens, Mueller has been accused of politicized decision-making in the past. A week before his July 2001 nomination by former President Bush to head the FBI, an op-ed in the Wall Street Journal raised serious questions about both Mueller and the other leading candidate, George Terwilliger.

Last week ... we watched trial balloons floating over Washington with the names of Robert S. Mueller and George Terwilliger as Mr. Freeh's possible successor. These names set us to perusing the books on one of our long-lasting preoccupations, the Bank of Credit & Commerce International. The BCCI scandal was the most important corruption story of the 20th century. Crooked international bankers cast a world-wide web of influence. They bought and sold politicians around the globe, ripped off depositors for some $10 billion, laundered drug money, worked with assorted spooks and trafficked with terrorists. ...

Both Mr. Terwilliger and Mr. Mueller were senior Justice Department officials when BCCI got away. Mr. Terwilliger was Deputy Attorney General; and Mr. Mueller ran the Criminal Division at Main Justice from 1990 to 1993. When it came to making decisions about investigations and prosecutions in the BCCI affair they were the men at the switches. ...

When Mr. Mueller took over the Criminal Division, critics in Congress and the media were already raising questions about Justice and BCCI. He stepped into this breach, telling the Washington Post in July 1991 that maybe indeed there was an "appearance of, one, foot-dragging; two, perhaps a coverup." He denied the coverup claims, specifically rejecting a Time magazine report that the U.S. government was seeking to obscure its role in the scandal partly because the CIA may have collaborated with the bank's operatives.

Still, the problems with Justice persisted. And the timing of some of Mr. Mueller's moves raised eyebrows. In September 1991, Justice indicted six BCCI figures and a reputed Colombian drug lord on racketeering charges. The indictment was unveiled just minutes after then-Congressman Charles Schumer issued a report sharply critical of Justice Department handling of the case. ... Mr. Mueller also engaged in a running series of battles with the Manhattan District Attorney, Robert Morgenthau. According to news reports over the years, Justice prosecutors were instructed not to cooperate with Mr. Morgenthau's office, documents were withheld, and attempts were made to block other federal agencies from cooperating.

The December 1991 settlement of criminal charges against BCCI, which Terwilliger described as "a fair arrangement," uncovered "only $1.5 billion in the coffers of a bank that once held $22 billion in deposits." This missing money has never been traced.

Although the Journal op-ed concluded by suggesting that "on the evidence we can see, Mr. Mueller would be a peculiar choice indeed," he was Bush's final selection -- Terwilliger having been passed over because his work as lead lawyer on the 2000 Florida recount had left him with too blatant an appearance of political partisanship.

Mueller is now almost eight years into his ten-year term as FBI director, but the questions raised by such respected sources as Time and the Journal as to whether he might have been involved in a cover-up of the BCCI scandal on behalf of the George H.W. Bush administration and the CIA have never been addressed.

As a result, doubts remain even today as to where his true allegiances lie.

-- Muriel Kane

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