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U.S. Attorney’s Testimony Reopens Issue of BCCI Prosecution

May 14, 1992

WASHINGTON (AP) _ A former U.S. attorney told Congress today that Justice Department officials denied his request last year to enforce subpoenas in several countries against the scandal-ridden Bank of Credit and Commerce International.

The testimony at a Senate hearing of Dexter Lehtinen, a former U.S. attorney in Miami, reopened the issue of whether the Justice Department purposely delayed its prosecution of BCCI.

BCCI pleaded guilty to federal racketeering charges earlier this year and agreed to forfeit a record $550 million in U.S. assets.

Lehtinen said he and his assistants needed to subpoena documents from BCCI in foreign countries where the bank operated, in order to make a case in his investigation of BCCI and its links with the failed CenTrust Savings Bank of Miami.

″The key was getting documents,″ Lehtinen told the Senate Foreign Relations subcommittee on terrorism, narcotics and international operations. ″This was a very serious case.″

Lehtinen, who resigned in January, said that after BCCI failed to comply with subpoenas for bank documents, he asked Justice Department officials to enforce the subpoenas. The officials denied his request, Lehtinen said.

The subcommittee’s chairman, Sen. John Kerry, D-Mass., and other officials, including New York District Attorney Robert Morgenthau, last year accused the Justice Department of foot-dragging in its prosecution of BCCI. Kerry and Morgenthau have never advanced a reason why Justice might have delayed.

″I don’t recall a specific reason for the refusal,″ Lehtinen said.

Justice Department spokeswoman Kristen Gear did not immediately return a telephone call seeking comment. In a report Wednesday, NBC News quoted the department as saying there were no improper delays and that it did approve subpoenas where it found them appropriate.

In a related development Wednesday, the government expanded its criminal case in Miami against David Paul, the ousted chairman of CenTrust, by charging he padded the thrift’s bills to pay for decorating and renovation at his mansions.

Paul, whose free-spending ways made him a symbol of the savings and loan crisis, was charged in the new indictment with racketeering, conspiracy, fraud, perjury, filing false income tax returns and doctoring CenTrust records.

In February, Paul was indicted on federal conspiracy and fraud charges alleging that he propped up the failing CenTrust with a $25 million sham purchase of securities by BCCI.

At today’s hearing, Lehtinen said he wrote last year to Justice Department officials seeking permission to enforce subpoenas against BCCI in nine countries: Panama, Switzerland, Britain, France, the Netherlands, Luxembourg, the United Arab Emirates, the Bahamas and the Cayman Islands. Lehtinen said the officials at first denied his request entirely, then eventually permitted subpoenas to be enforced only in Panama and the United Arab Emirates.

NBC News said Wednesday it had obtained a letter showing that then-acting Attorney General William P. Barr directed Lehtinen last year not to indict BCCI and five bank officials just one day before an indictment was to be handed up. The indictment was not approved by the Justice Department until three months later, according to NBC.

Barr replaced Dick Thornburgh as attorney general late last year.

Lehtinen, who also oversaw the government’s prosecution of deposed Panamanian dictator Manuel Noriega, resigned in January after an internal Justice Department report criticized his conduct in office.

At the time, The Washington Post quoted unidentified law-enforcement sources as saying Barr did not want Lehtinen to remain in office after receiving the report.

But Lehtinen said the report concluded that he did not act in ″an unethical and improper manner″ when he publicly cleared a prominent fellow Republican office holder, Broward Country (Fla.) Sheriff Nick Navarro, in a corruption investigation without consulting with his assistants handling the case.

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