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Arms dealers are not the only ones to describe a pact between Abedi's bank and China's weapons industry: according to State Department sources, China has also used B.C.C.I. as a middleman in Silkworm missile sales to Iran, Iraq and Saudi Arabia. The Silkworm missiles sold to Iraq and Saudi Arabia were equipped with sophisticated Israeli-manufactured guidance systems, the government sources say. Arms dealers who have done business with B.C.C.I. say its officers attracted illegal deals because the bank provided documentation and letters of credit for arms being shipped, for example, as agricultural machinery, and that it routinely handled arms moving out of Eastern Europe and masked technology transfers from the West into Soviet bloc countries. The East bloc trade was so lucrative that Abedi traveled to Moscow in 1985 to promote more weapons deals and to lobby for permission to open B.C.C.I. branch offices in the Soviet Union. Former employees have told TIME that B.C.C.I. associates found it easy to bribe arms-factory managers and officials within the Soviet Union because of low pay, but that perestroika had cut into B.C.C.I. profits there. Reason: some government officials who favored the bank because of payoffs had been removed from their positions.
The very act of operating simultaneously as a bank and as a broker gives B.C.C.I. an enormous advantage: it is instantly able to fund virtually any deal it wants and empower any middleman it chooses to pull such a deal off. The B.C.C.I.-brokered sale of F-4 Phantom jet parts to Iran from the U.S. offers a good illustration of the process. The deal starts when B.C.C.I. learns from its sources in Iran that it wants to buy spare parts. B.C.C.I. and its agents then research the supplier market to obtain the price of the materiel. Because U.S. restrictions on the sale of such equipment to Iran make this particular deal illegal, B.C.C.I. next provides a falsified end-user ; certificate saying the jet parts will be sold to Israel. The bank then opens a letter of credit -- a form of financing only a bank can do -- in favor of the seller or the seller's agent and arranges to ship the parts. Because B.C.C.I. is a large bank, it can afford to pay off the seller immediately, then turn and collect a vastly larger sum from Iran.
In spite of the virtual global shutdown of B.C.C.I., the bank remains intact in its traditional haven, Pakistan. Though other press reports maintain that Abedi is physically frail and often incoherent, TIME has interviewed several business associates who say he remains a major figure in the international weapons trade. He has held a press conference within the past month, and is in the process of licensing a new bank in Pakistan, called the Progressive Bank.
In the meantime, B.C.C.I. is even now brokering an arms deal to Abu Dhabi, involving the sale of 45 South African G-6 mobile artillery pieces. If B.C.C.I. can hold it together, sources say, Abu Dhabi may buy as many as 55 more of the same pieces.