Read On the Grand Trunk Road Online
Authors: Steve Coll
On the Grand Trunk Road (25 page)
“They were impractical people, I suppose,” explained Ahmed Abdul Bari, the son of a neighboring Lucknow raja whom I met in Karachi after BCCI had failed. The rulers for whom Abedi’s family had worked were “impulsive, emotional, romantic,” he said. “There were lots of people with power to be looked after,” added a friend of Abedi’s, Humayan Gouhar. “That did affect [his] thinking.”
Abedi’s career in banking began amid the trauma of Partition, when as many as one million people died in religious riots and millions more were forced to abandon their lives and belongings to seek refuge in a new country. The Mahmudabad raja left his throne, emigrating first to Karachi and then to London, where he helped to build the Regent’s Park mosque, ate simple meals from a hot plate in his apartment, and finally died in exile. Abedi and thousands of other Shia Muslims fled with the raja to Pakistan. But they could not afford to go on to London. There was hardship but also opportunity in their new country, and Abedi pushed ahead. He rose to a senior position at Habib Bank but felt stymied by the Habib family clan’s tight control. In 1959 he struck out to start the United Bank Limited with money provided by the Saigols, a family of industrialists in Lahore who were also refugees from India. When UBL was nationalized by Zulfikar Ali Bhutto’s government in 1972, Abedi started again by founding BCCI.
In the Pakistani world of clan, family, ethnicity, and religion, Abedi was at a double disadvantage as a Muslim Shia refugee from India, suceptible to discrimination by Pakistan’s dominant group, native ethnic Punjabis from the Sunni Muslim sect. Like so many others in Pakistan and India, Abedi protected himself from such discrimination by surrounding himself with people from his own clan—Shia refugees, particularly Shia refugees from Mahmudabad. If you were a Shia with family roots in Mahmudabad or its environs, you had merely to walk into BCCI’s headquarters to be offered a job. As the bank grew, so did the clan’s rewards. Salaries skyrocketed. The bank expanded internationally. The clan struck it rich. Many of Abedi’s trusted aides at BCCI were not only from his clan, they were from lower-middle-class or landless families with few resources and no reputation. They often treated Abedi sycophantically, a practice he did little to discourage. He was, after all, their raja.
Abedi also sought status in emerging Pakistan by surrounding himself with relatives of the country’s most important people. “He wanted the sons of somebodies,” explained politician Abida Hussain, at present Pakistan’s ambassador to the United States. “If you were a civil servant, you got your son hired at BCCI. If you were a general, you got your son hired. They were paid more than they were worth and they swanked all over the world. It was inevitable that it would go broke.” In the 1980s, Abedi hired a descendant of one of the greatest “somebodies” he had ever known—the raja of Mahmudabad. Imran Imam, a grandson of the Mahmudabad ruler whom Abedi’s father had served, became a senior employee of BCCI’s headquarters office in London. His position: Abedi’s personal assistant.
In some ways, Abedi saw BCCI less as a twentieth-century multinational bank than as a seventeenth-century feudal kingdom with international horizons. From BCCI’s beginning, Abedi declared publicly and repeatedly that his would be a different kind of bank, one devoted among other things to philanthropy and the uplifting of Third World poor. In Pakistan, he poured about $60 million of bank profits into a foundation ostensibly devoted to funding antipoverty projects. He doled out stipends to Pakistani politicians, journalists, and poets. He gave low-cost or free housing loans to all his employees and many of his friends, some of them important Pakistani politicians. If an employee or a relative fell ill, Abedi sometimes paid for expensive operations or treatment abroad. He routinely paid for scholarships for the children of employees to attend universities in the West. Many of the beneficiaries of this largesse, of course, were members of his Mahmudabad clan. But as BCCI expanded, Abedi took the feudalism he knew and went international. He gave $10 million to former U.S. president Jimmy Carter’s Global 2000 organization and millions more to philanthropic foundations he established in England and other countries.
But the money did not belong to Abedi personally. It came from BCCI’s revenues and from the bank’s depositors. His impulsive generosity extended to the bank’s basic lending business. He apparently lent hundreds of millions of dollars to people who had no intention of paying it back. When Price Waterhouse, BCCI’s auditors, uncovered these giant black holes in the bank’s lending portfolio in 1991, they were stunned to find that Abedi had apparently doled out unsecured, nonperforming loans totaling as much as $5 billion to friends and business associates. Pakistanis found this pattern of lending huge sums of money without collateral or tight repayment agreements perfectly comprehensible. “If they had done something for him, he would make sure that he did favors for them,” said Bari, the son of the Lucknow raja. “That is something the West finds very difficult to understand. But he [Abedi] had seen how princely things are done.”
One of Abedi’s patrons was a genuine prince—Sheikh Zayed of Abu Dhabi. After flying to the sheikh’s then-underdeveloped desert kingdom in the early 1970s to persuade the ruler to fund BCCI, Abedi and his bank devoted the ensuing fifteen years to catering to Zayed’s every need. This was something an old courtier like Abedi know how to do well. He set up a “protocol department” in BCCI’s Karachi branch and spent as much as $5,000 a day to maintain the sheikh’s Pakistan palaces and to serve the Abu Dhabi ruler’s visiting relatives. Abedi took this idea international as well. As BCCI expanded internationally, he sought out businessmen with close family or social connections to the new country’s government, rewarded those intermediaries generously, then sought to expand his bank’s deposit base. In Washington, he turned to former U.S. defense secretary Clark Clifford, whose reputation as an accomplished courtier was well established long before he met Abedi.
Ultimately, this pattern of growth became untenable—the total amount of the unrecoverable loans, gifts, stipends, and charity donations outstripped the amount of deposits and other obligations BCCI owed to its customers. New York district attorney Morgenthau called this type of fraud a “giant Ponzi scheme,” meaning that Abedi kept racing to raise new deposits from customers in order to cover his fraudulent dealings with friends, employees, and cronies. In South Asia, the pattern was seen differently. There it seemed obvious that Abedi had tried foolishly to extend to the West a style of business commonplace in his own world but unacceptable abroad.
To many South Asians, the fall of BCCI was further confirmation of continuing Western plots to keep South Asia in its place. To them, when the Bank of England raided and closed BCCI to save what depositors’ money was left, another Abedi was being hung out in a cage by colonials, as an example to the population.
That the West might not view South Asia as a rising threat to be contained by the continual enactment of secret conspiracies against its leaders sounds implausible to many Indians, Pakistanis, Bangladeshis, and Sri Lankans. After two hundred years of imperial history and forty years of the cold war, the existence of such conspiracies has become an article of faith. After Rajiv Gandhi was assasinated, the Indian press brimmed with articles offering the theory that the CIA had killed Gandhi because as a strong subcontinental leader, Gandhi posed a threat to George Bush’s “new world order.” When I published a story describing these theories and ridiculing them lightly, one Indian media critic took up two pages of a leading national magazine to excoriate me for naïveté and arrogance. It was obvious, he wrote, that I did not understand how the CIA really worked, what it really wanted.
In the case of BCCI, it was the Western media who saw the CIA’s faint hand connecting prosaic fragments into an artful pattern. But this time, for once, I was headed in the other direction. After hearing lengthy stories about Mahmudabad’s lost feudal splendor from friends and associates of Abedi in Karachi, I was desperate to see the kingdom and talk to the reigning raja of Mahmudabad, the son of the ruler Abedi’s father had served. His name was Mohammed Amir Mohammed Khan, but his friends referred to him as Suleiman. He was born and raised in London during his father’s exile and trained as an astrophysicist at Cambridge University. During the 1970s, he gave up on the West, married a Hindu, the daughter of a distinguished Indian couple, former foreign secretary Jagat Mehta and author Rama Mehta, and then returned to his family’s old, decaying palaces to take up residence. His friends described him as one of the great characters of the cultural divide between South Asia and the West; V. S. Naipaul had met and written about him, they said, as if this were the ultimate endorsement. But when Rama, my New Delhi researcher, telephoned and asked for an appointment to talk about Abedi and BCCI, Suleiman declined. So, figuring that South Asian imperatives of hospitality would overwhelm his reluctance, we decided to fly down to Lucknow and knock on his palace door.
We drove first to what the locals call the “city palace,” a crumbling, sprawling estate in the heart of teeming Lucknow. We entered through a faded gateway, waving the guards aside with regal gestures. At the end of the stone drive we found that most of the palace was shut; Suleiman occupied only a handful of rooms to one side. Servants and barefoot boys milled about. Of all the wonders in South Asia, the most glorious is this: that history just lies around in heaps, crumbling slowly, open for anyone to wander through and examine. No velvet ropes, no guided tours, no souvenir shops with overpriced postcards, just a few
chowkidars
with not much to guard against. We presented our cards and sat in a hallway. A servant returned to say that Suleiman was in the bath, but if we waited, he would grant us an audience. For an hour we milled through the hallways, staring at the sepia photographs of Mahmudabad’s history—the raja and his court, the raja’s father and his British sponsors, the imperial ladies in wide-brimmed bonnets and white dresses wilting in the summer sun.
chowkidars
with not much to guard against. We presented our cards and sat in a hallway. A servant returned to say that Suleiman was in the bath, but if we waited, he would grant us an audience. For an hour we milled through the hallways, staring at the sepia photographs of Mahmudabad’s history—the raja and his court, the raja’s father and his British sponsors, the imperial ladies in wide-brimmed bonnets and white dresses wilting in the summer sun.
Finally Suleiman invited us into a sparsely furnished study filled with musty physics books. He was a short, balding man with tufts of graying hair and tortoiseshell glasses. He mentioned nothing about our rudeness in showing up uninvited. I explained that I wanted to learn more about the history of Mahmudabad. It was the last complete sentence I uttered for three hours. Suleiman was off—he talked and talked and talked, leading us on a journey through ten centuries of history, religion, and Eastern thought, digressing here to the fourteenth-century Caliphate of Baghdad, turning there to the rulers of the Gilgit Shias, looping back around to resume the history of Mahmudabad. Eventually his narrative found its way forward to the twentieth century. He talked of Abedi’s family.
“Abedi’s father and paternal grandfather are Syeds, which means descended from the Prophet. They were all with us since the nineteenth century. They were loyal, people of integrity, moral probity. Maybe they had their weaknesses—rumor has it, with women, but very discreetly. They were generally not known for any controversial behavior. As far as financial matters, revenue matters, their service to the state, their record was unimpeachable. There were no inappropriate embezzlements.” (Left unaddressed was the complicated question of what, in feudal economic arrangements, constitutes an appropriate embezzlement.) Abedi himself was “very moved” by the feudalism of Mahmudabad. “As he grows ill and old he is emotional. I saw him in London last year and he wept. He looks upon me almost as he would my father and my grandfather. I went to shake his hand and he took it and pressed it to his chest and began crying. I pulled it away and said he should not be emotional. When my father died, he [Abedi] looked at me and tears flowed from his eyes.”
I asked Suleiman what it was like being king. He talked at length about growing up with his father, the last semi-independent raja of Mahmudabad. His father had been caught in palace intrigues at the age of fourteen, accused of conspiring against his decadent father. Later he became influenced by Gandhi and others in the independence movement. His father was an ascetic. He shunned the splendor of the palace but could not escape it, either. He quarreled with the founders of Pakistan and then abandoned the subcontinent altogether, living out his life in spartan middle-class exile in London, struggling with such mundane challenges as how to hail a taxi and pay the driver. “My father by degrees became extremely religious,” Suleiman said. “All alcohol was destroyed. He slept on the floor. He was a cross between a Tolstoy and a Gandhian—romantic, idealistic, very passionate. He was greatly conscious of the fact that wealth cannot be acquired without some injustice. He was not a revolutionary. He did not have any place for Stalin. Yet he was fascinated by Lenin. Gandhi was around a lot and greatly admired him. He constantly emphasized the need to live side by side with the masses—no Savile Row suits. He was very keen to earn his own living.... But he felt somehow that money was not quite right.”
Suleiman described his own recent homecoming to Mahmudabad’s abandoned palaces in the patchwork era of modern, democratic India. The people flocked to see him at the old Mahmudabad fort outside of Lucknow. Suleiman decided to run for political office, for a seat in the state legislature, and he won. At a rally in the fort after his victory, tens of thousands of former Mahmudabad subjects packed themselves inside, chanting and swaying with emotion.
“It was not just the elections—it was some kind of unspoken feeling, a return, a replacement,” Suleiman said. “A bond had been reestablished. It showed what my father meant to them. I’m sure there were instances of tyranny and repression during our family’s reign, clashes between the cultivators and the peasants. We were not revolutionaries.” Mahmudabad’s meanings, Suleiman said, are “not irreversible, but it’s a part of history.”
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