More Than $1 Billion in Iraqi Assets Found in Foreign Banks By Susan Schmidt Washington Post Staff Writer Sunday, December 21, 2003
U.S. authorities have identified more than a billion dollars in Iraqi assets in banks in Syria, Lebanon and Jordan and are pursuing hundreds of leads in the United States concerning possible illicit financial transactions with the former Iraqi government. Treasury, Internal Revenue Service and Immigration and Customs Enforcement (ICE) officials have spent nine months poring over financial records recovered from the vault of the Central Bank of Iraq, including records they say show how Saddam Hussein's government diverted at least $1.8 billion from the United Nations' humanitarian oil-for-food program and moved some of that money to foreign banks or used it to buy weapons components. Officials are pressing the hunt for many billions more Hussein is believed to have moved out of Iraq, worried that those funds are going to terrorist groups or are financing Hussein loyalists' attacks on U.S. troops. "There was a staggering amount of plunder as a result of the oil-for-food program and other schemes," said the Treasury Department's recently departed general counsel, David Aufhauser, who until this month helped direct the search. "While some was spent on ostentatious palaces, most is unaccounted for." Investigators said they have identified $3.3 billion Hussein generated since June 2000 in violation of U.N. sanctions. ICE agents who set up shop in the vault of the largely demolished central bank found records showing the diversion and movement of funds, agency officials said. Iraqi officials, they said, did not bother to disguise illicit money transfers or weapons purchases. "They weren't worried about covering up with front companies," one ICE official said. The result is that investigators have launched about 40 ongoing probes of U.S. entities or individuals suspected of exporting weapon components or dual-use technology, as U.S. News reported Thursday, in violation of export laws and U.N. sanctions barring trade with Iraq. In the first criminal case to result, two U.S. men were charged in October with brokering the manufacture of six armored patrol boats for the Iraqi military -- a transaction detailed in a contract ICE agents recovered at the central bank. A special Iraqi ICE task force in Washington is pursuing hundreds of other leads generated in Baghdad about possible illegal business transactions by U.S. individuals and entities. ICE agents also have been teamed with the U.S. military to recover Hussein's weapons arsenals and try to learn their provenance, an effort that dovetails with the search for Iraq's missing billions. Michael T. Dougherty, ICE director of operations, said ICE agents have interviewed captured Iraqi officials and developed informants, adding that it is "the first time civilian investigative teams have been deployed with combat teams." Among those interviewed by financial investigators are former senior Baath Party members and Iraqi military officials. Treasury and ICE officials have tracked $495 million in funds belonging to four Iraqi entities, including a bank and an oil company, to more than 30 banks in Lebanon, officials said, and they believe $800 million to be in banks in Jordan. Those countries have frozen the accounts, and negotiations are underway to return the money for the rebuilding of Iraq. U.S. officials believe the biggest cache, $2 billion, was socked away in banks in Syria, which remains on the State Department's list of state sponsors of terrorism. In October, Syria allowed a team of Iraqi and U.S. investigators to examine records in Damascus, where they found $260 million. Syrian officials have maintained the Iraqi funds there totaled $175 million, and have not agreed to return the funds to Iraq. But some in the United States involved in the hunt said they believe that individuals close to the Syrian government have plundered much of the $2 billion. Syria did a large amount of unsanctioned commerce with Iraq and is suspected of having controlled billions of Iraqi funds banked in Lebanon, according to a source familiar with U.S. investigative efforts. Other Iraqi assets were stashed in accounts around the world, officials said, with significant sums in Japan, Europe and Southeast Asia as well as the Middle East. The biggest amount of money recovered was found in Iraq in May, when the U.S. military and ICE agents discovered $788 million -- money Hussein authorized his son Qusay to withdraw on March 19 from the central bank. In a letter to the bank's governor, Saddam Hussein asked for the release of $920 million U.S. dollars and $90 million euros to his son and a companion, "to protect and save them from American aggression." U.S. financial investigators have been tracing the serial numbers on those bills, as well as numbers on millions more in various currencies found under the central bank vault. The information may allow them to trace the origin of the funds and learn which banks, entities and nations did business with the Iraqi government. ICE officials are preparing to learn whether $750,000 of Qusay Hussein's money was taken off the street with his father's arrest last week. They will compare serial numbers from the money recovered in May with the numbers on Saddam Hussein's bills. Either way, $132 million of Qusay Hussein's cache is still missing -- an amount that U.S. officials worry could keep the insurgency well armed.
