BCCI and Senator Kerry revisited.

BCCI AND SENATOR KERRY REVISITED

IN OUR October 7, 1991, issue, NATIONAL REVIEW published an article by Robert Stowe England, entitled "The Real Scandal," which harshly criticized certain aspects of the investigation of the Bank of Credit and Commerce International (BCCI) by Senator John Kerry's Subcommittee on Terrorism, Narcotics, and International Operations. Senator Kerry telephoned to protest our article, and he followed up with a 14-page single-spaced letter which listed 28 separate errors of fact or analysis. Mr. England, DaVid Kendall  NATIONAL REVIEW'S lawyer), and I met with the senator and his staff for nearly two hours, and we promised to investigate his criticisms.

Having conducted that investigation, we are now in a dilemma. In law, we could stand behind every comma and preposition of our original article. Mr. England, a distinguished journalist, our frequent contributor, and a man unknown to libel suits, had no animus against Senator Kerry, investigated carefully, uncovered knowledgeable sources, and firmly believed, as we did, that the article was entirely accurate as written. He had sought information from the senator's office and had been greeted with hostile suspicion. In the quaint legal formulation, we published without 'actual malice," because we neither knew of any untruths nor doubted what we printed. We would be fully entitled in law to reject the senator's protest entirely. But having carefully analyzed the senator's letter, rechecked our sources, and reviewed the new information and documents that the senator and his staff provided us, we have arrived at a conclusion we didn't anticipate. We still think our article contained valid and serious criticisms, and we reiterate some of them later in this note. In all honesty, however, we think we owe the senator an apology for some errors that would have been flagged in football as "unnecessary roughness."

Let me classify the various charges. Some of the senator's points strike us as tendentious and/or silly, and we think he can't really urge them with a straight face. For example, he attacks us for writing that Clark Clifford convinced Senate Foreign Relations Committee Chairman Claiborne Pell to extend a subpoena deadline (when it was a Foreign Relations Committee aide reporting to Pell who actually granted the extension); that investigator Jack Blum left the Kerry subcommittee to go on to help Manhattan District Attorney Robert Morgenthau break the BCCI case (Blum did, and Morgenthau did); that the subcommittee spent a lot of time investigating the far-Left theories of the Christic Institute (it did); and that the intrinsic problem of conspiracy theories is that the overwhelming majority of them aren't true (they aren't).

Several other points raised by the senator seem to us fairly debatable as matters of opinion or evaluation, We remain unrepentantly convinced that the senator often treated the subcommittee's investigation as a political football; that a key breakthrough on BCCI (in the person of Jose Blandon) was supplied to the subcommittee courtesy of the Left's least favorite senator, Jesse Helms; that Senator Kerry could have been more aggressive in trying to wrest documents from First American; and that the senator should have challenged Clark Clifford's claim, made in a meeting with the senator on September 14, 1988, that BCCI "was squeaky clean and happy to cooperate."

But we would correct certain other points. We accept that the senator's subcommittee did not bring Communists to Washington to testify, and we think we were mistaken to assert that the subcommittee's funds were running out when it scheduled hearings with Jose Blandon in the spring of 1988 (although we don't back down from our assertion that the subcommittee's credibility was running on empty at that time). We don't think our thrust that "the fall of BCCI would have hurt Kerry's career directly" is entirely a fair one. Yes, he was raising funds from fatcat lawyers beholden to BCCI, and yes, we still think that's wrong, but other fatcats would probably have bellied up to the senator's campaign bar in their stead.

More serious is an error of fact which we now believe we made about the scheduling of hearings on BCCI in September 1988. We were originally told on excellent authority that hearings were set for that time, that the staff was working full tilt to get ready for them, and that they were called off after Clark Clifford visited Senator Kerry. We believed that, and our piece referred more than once to the senator's "cancellation" of "planned hearings" in September 1988. Some of the evidence the senator adduces to refute our account isn't very persuasive. He provides us with a June 12, 1988, press clipping which repeatedly quotes him as saying he's going to "suspend" his subcommittee hearings until after the November general elections. We continue to believe that far from simply being "suspended" for a brief period, the BCCI hearings went into virtual catatonia for two years, whatever behind-the-scenes work the subcommittee was doing. But we are now persuaded that we were wrong to state or imply that subcommittee hearings were specifically scheduled-and then suddenly canceled-in September 1988. After publication our sources backtracked on this narrow point. But this wasn't simply a trivial factual detail; it was a key charge in the context of our criticisms of the senator and the way he conducted his investigation. We apologize to the senator for this error.

While the BCCI mess was indeed a scandal, Senator Kerry's performance in bringing it to light was not, pace our hyperbolic headline, the "real scandal." The flaws in his investigation, described in our article, were minor compared to the criminality of BCCI. And if the senator could have pursued Jose Blandon's evidence of this criminality more aggressively, he did pursue it. He was neither a prosecutor nor a regulator, and his investigative powers were specifically limited. When all is said and done, he was at least trying to do a job that others better situated weren't. And he deserves credit for that-even if the credit he deserves is considerably less than the credit he has claimed.

That said, we decline the senator's request to retract the article. We still think BCCI was left alone for too long by too many powerful people. We still believe that the senator's subcommittee dithered for two years and then was beaten to the punch by the Bank of England. In the light of this, we continue to feel that the senator was at least negligent in accepting campaign contributions from Clark Clifford and Robert Altman after he had met with them to discuss BCCI. And we think our description of the relationship between Senator Kerry and savings-and-loan magnifico David Paul was right on the money (as it were). We'll consider issuing the senator a halo on that one when he issues a subpoena to Mr. Paul. There were unholy links between David Paul's CenTrust and BCCI that should have been pretty evident early on.

The senator can still sue us for libel if he likes. We have no deal with him, and we doubt that he will much like this attempt to set the record straight. But we and Mr. England recall with distaste the libel cases involving Ariel Sharon and William Westmoreland in which Time and CBS were able to conceal serious journalistic errors behind the broad dike of the Sullivan liel rule of actual malice." We do not think the media mantra We stand by our story" is a sufficient retort to specific criticisms backed up by good evidence. We believe that the press (that's us, but also any of our readers who writes a pamphlet) ought to enjoy generous constitutional protections. But if the press doesn't acknowledge error when it gets it wrong, that is a real scandal.

JOHN O'SULLIVAN