U.S. HOUSE OF REPRESENTATIVES
CQMMtrnt ON BANKING. FINANCE AND URBAN AFFAIRS
ONE HUNDRED SECOND CONGRESS
AY BURN HOUSE OFFICE BUtlOING WASHINGTON.IB
1
Mr. Richard J. Kerr Acting Director Central Intelligence Agency
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Mr. Kerr:
As you know, the Committee on Banking, Finance and Urban Affairs is conducting an investigation of the First American Bankts connections to Bank of Credit and Commerce Internationalnd the numerous allegations surrounding BCCI, from narcotics money laundering and hidden foreign ownership. banks, to regulatory evasion and conspiratorial activities. The Committee is conducting this investigation as part of its jurisdiction pursuant to House) (d) over banks and banking. Several public hearings have been held and numerous subpoenas have been issued for records that will trace this tangled international financial web.
The Committee has subpoenaed records of the First American Bank as part of this investigation. Some of the subpoenaed records involve your agency's relationship withill call these the "FABhis Committee understands that your agency has concerns about these records, and so the Committee staff, at my direction, has held numerous discussions with your agency's representativesengthy meeting on Septemberor discussions on how to proceed regarding these particular FAB records. in these discussions, your agency representatives have also described records within your agency that are pertinent to ourill refer to these as the "BCCI/CIAhe Banking Committoo intents to carry forward with its investigation, including access to both the FAB and BCCI/CIA records, while providing all legitimate security measures.
We are now seeking to complete our understanding of what specific security measures you agency would suggest, either for the FAB records, or for the BCCI/CIA records shared with this Committee. We understand there to be four such measures. First, the particular investigator on this matter, Dennis Kane,"should receive your review for an Special Compartmentalized Information (SCI) clearance or, in the short term, an interim SCI clearance.
His recent background investigation and Top Secret clearance should speed the requisite review, and an expedited completion of that review willall subsequent discussions and build confidence on all sides. There mayeed for other cleared staff, about which we will cownunicate separately. Second, we understand that while our own secure facilities are adequate for some sensitive records, some records should be examine! onlypecial Compartmentalized Facilityhird, the financial expert at your agencyesire to assure that in any collection of FAB records, we consult with him regarding tho personnel involved in the collection.
Fourth, and perhaps most important, we understand that your agency has different levels of concern regarding various records in question, and may strongly dosire that some records not be collected even under secure conditions. We expect to resolve such questions through further discussions. The Committee understands the pertinent objections your agency has expressed regarding the examination of banking relationships maintained by you agency. An important point to remember is that the issue of looking at bank records arises, not because of ordinary oversight regarding your agency, but because of tho special circumstance of this particular investigation, mainly the extreme nature of allegations regarding BCCI and FAB. There is no question of establishing some precedent here regarding oversight generally, but our intention is to limit such activity to the special circumstances involved in the BCCI/FAB banking scandal.
In discussions with my staff, your representatives have indicated that your agency might communicate an instruction to FAB to forbid and to block the provision to us, of all pertinent FAB records. Allusions were madeossible legal position by your agency along the line that none of these bank records could be produced by FAB and then provided to the Banking Committee basod on what your agency termed as "constitutional- grounds. This Committee is pleased to fully inform your agency of our broad constitutional powers of investigation, and its authoritative jurisdiction in the sphere of banking, if it appears that there are any questions in that respect. We have difficulty accepting that your agency wouldosition that would seek to preclude the Banking Committee from fulfilling its oversight responsibility related to banks and the bank regulatory system, especially in light of the serious allegations that have surfaced related to BCCI and FAB. The Banking Committee would prefer to work with your agency. We can discuss the details of when records are provided, and how, and which ones, but flatly asserted denials of our right to see any pertinent FAB or BCCI/CIA records would represent an unacceptable, if not inflammatory, step.
In this regard, briefings, internal reports, and other assistance by your agency are valued by us, and we are accepting your offers in this regard, we expect to examine the CIA Inspector General Report on BCCI as promptly as possible, and in the near future, expect to interview CIA employees regarding our BCCI
investigation. The Committee also expects to interview officers of
FAB, and to the extent your agoncyegitimate interest in
those interviews, we will arrange those interviews to safeguard
those interests. We look, at this time, with disfavor on
suggestions either of withholding of reports, delaying of
interviews, or our reliance on some other investigation, either
internal or external to your agency. The parallel separate
investigations by thaill be valuable, but
the Banking Committee has conducted numerous bank investigations,
and wo must say from our experience in banking scandals such as
BCCI, that our own examination of pertinent records is tho surest course.
The Committee's investigation, including its requirement of production of subpoenaed bank records, is proceeding without delay. Accordingly, we would request your written reply by the close of business on Wednesday, Octobers to whether you will proceed as promptly as possible with each of thecknowledging our legitimate interest in examining the FAB records while we acknowledge and satisfy your legitimate securityssisting us with the security measures noted aboveclearances, physical security for records, consultation on bank personnel, and interviow arrangements, so that there will be no extraneous delays;roviding access to tho agency's own FAB and BCCI-related documents (as distinct from the bank records) as the need mav arrive.
To avoid misunderstandings, we should re-emphasize, as our course of action over the past weeks has indicated, that we are not taking any precipitate steps with respect to the production of documents under our subpoena of FAB records, and that our discussions with you also call for no precipitate steps on your part, though we reserve our full authority if the method of consultation and discussion proves unavailing. This Committee recognizes that the positions taken by your agency representatives, while sometimesack of understanding of the investigative authority of the Congress and this Committee in the banking realm, simply reflect their understandable expressions of legitimate security concerns which are their duty to protect. We are nowtage where by further written and oral exchanges, weositivehare with you every confidence that we can resolve these matters fully consistent with our respective responsibilities.
Henry B. h(
Henry B. Gonzale Chairman
cc: Tho Honorable David McCurdy
Original document.
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