Following Saddam Hussein's Secret Money-Laundering Trail

Insight ^ | 3 June 2004 | Lucy Komisar

[RKV]

A detailed analysis of Saddam Hussein's secret money-laundering techniques shows here for the first time how he used the same offshore money launderers as Osama bin Laden. That covert money network, based in the tax havens of Switzerland, Liechtenstein, Panama and Nassau, helped bankroll the war machines of both Iraq and al-Qaeda.

More than 1,000 pages of confidential corporate, bank and legal documents show how the network functioned. The papers come from court cases filed in several European countries, from corporate records, from investigations by Italian police, from a report of the Kroll international investigative agency, and from private sources. The documents are the basis of further investigations coordinated in Europe by the prosecutor of Milan.

They show, for example, that a father-and-son team in Liechtenstein, whose business is setting up shell companies and secret bank accounts, worked to move the money of both Saddam and al-Qaeda. Engelbert Schreiber and his son Englebert Schreiber Jr. are listed as founder or board member of Mediterranean Enterprises Development Projects, Tradex, Techno Service Intl., Saidomin and Executive Flight Assistance, all Liechtenstein companies that handled arms sales and payoffs for Saddam. They also are listed on corporate documents for Nasreddin International Group Ltd. Holding (Liechtenstein). Ahmed Idriss Nasreddin, on the U.S. terrorist blacklist, was a founder of Al Taqwa, the bank that moved money for al-Qaeda and which was closed down by the United States after 9/11. The Schreibers declined to respond to numerous requests for comment.

One of the men linked in documents to several Panama shell companies used in the Saddam laundering network was Baudoin Dunand, a Swiss lawyer who is administrator of the Saudi Investment Co. (SICO), the Geneva investment affiliate of the bin Laden family conglomerate, run by Osama bin Laden's half-brother Yeslam Binladen. (They spell their names differently.) Dunand declined to respond to repeated requests for comment.

The Banca del Gottardo in Lugano, Switzerland, moved al-Qaeda money via the Al Taqwa bank, a shell bank that operated through correspondent accounts at the Gottardo branch in Nassau. It also handled payments for the Saddam money network. The bank's spokesman wrote, "Please be advised that we do not intend to make any comments or discuss any issues with you regarding the article you proposed in your e-mail."

Banque Paribas, headquartered in Paris, with a significant portion of shares owned by Saddam's cousin Nadhmi Auchi, moved money for the Al-Mahdi network in the 1980s and was the bank chosen to handle the Iraqi oil-for-food payments. In fact, Iraq insisted that Paribas handle the oil-for-food escrow account. A corporate document for Al Taqwa Trade, Property and Industry Co. Ltd. of Liechtenstein -- an al-Qaeda network shell company also shut down by the United States -- lists Banque Paribas, Lugano, where it had accounts. (Paribas in 2000 merged with another French bank to create BNP Paribas, with Auchi continuing as one of the largest shareholders.)

Saddam began constructing his offshore operation in 1968 in Switzerland, aware that the country's bank secrecy made it a prime place to organize the movement of illicit funds and the purchase of arms. That year, 11 years before his coup, Saddam sent his half-brother Barzan Ibrahim Hasan Al-Tikriti to Geneva to construct the network to launder secret commissions charged on sales of Iraqi crude oil. The system also would be used for kickbacks on purchases from Western arms dealers. Liechtenstein, which Swiss bankers and money managers often use to handle dubious clients, was used to ensure even more impenetrable secrecy: Real names of company and account owners would be hidden from law enforcers.

The key Iraqis in the operation were Said Rahim Hussein Al-Mahdi and Nadhmi Auchi. Al-Mahdi was sent to Lugano because his father-in-law, Talaak El Naboulsi, an Egyptian soldier and member of the Muslim Brotherhood, was then working in Geneva for Barzan (who now is in U.S. custody).

Al-Mahdi set up his system of secret companies and accounts with the assistance of the prominent asset managers (also known as trustees or fiduciaries) Elio Borradori in Lugano in the southern, Italian-speaking part of Switzerland, and Enrico Walser and Engelbert Schreiber, in Vaduz, Lichtenstein. He also would use managers in Panama and the Bahamas. The same jurisdictions would be used to launder money in the oil-for-food sales in the 1990s.

Al-Mahdi established MEDP (Mediterranean Enterprise for Development and Projects), registered in Lugano, with subsidiaries -- generally just paper shells -- in New York City, London, Paris, Milan, Vienna, Tokyo, Seoul and Sao Paolo. Its subsidiary in Baghdad was chaired by Nazir Auchi, Nadhmi's brother. These shells in turn had shares of other companies that carried out the money laundering and arms purchases.

The offshore networks directed by the two men were crucial intermediaries for such weapons merchants as Messerschmitt-Bulkow-Blohm Helicopter and Military Aircraft Group /MBB (Germany), Thyssen Industries (Germany), Airbus (the consortium of French, German, Spanish and U.K. companies), and Dassault (France), which used them to pay kickbacks and, after international embargos were established, to hide illegal sales.

For example, a 1982 bank transfer from the Nassau branch of the Banca del Gottardo in Lugano notes a credit to MEDP's "Satan" account of 33,000,000 French francs (about $6 million) from Dassault International. On a trip to Paris in January 1985, Al-Mahdi signed a contract with Dassault International whereby the company was instructed to send payments to an account at the Indosuez Bank branch in Lugano.

Banca del Gottardo has a colorful history: It is the bank that moved the bribe and kickback money paid by a Swiss construction company to former Russian President Boris Yeltsin and his cronies in exchange for contracts to refurbish Kremlin buildings. In the 1970s, Gottardo was the Swiss subsidiary of Banco Ambrosiano, "the Vatican bank," which collapsed in 1982 in a $1-billion fraud that involved money siphoned off to offshore shell companies and accounts. Ambrosiano had laundered drug- and arms-trafficking money for the Italian and American mafias.

A 1983 document shows $1 million transferred from the Gottardo Satan account to Hamid Al-Tikriti's account at the National Bank of Kuwait. The recipient -- Abid Hamid Mahmoud Al-Tikriti -- was Saddam's presidential secretary and cousin, arrested by the United States in June 2003. In 1981, half-a-million dollars had been sent by Gottardo to Hamid Al-Tikriti's Kuwaiti bank account.

Some Satan payments went to individuals in the United States. A December 1982 telex from MEDP Paris requests a transfer of $200,000 from the Satan account to Jawdat T. Mansour and Rihad J. Mansour to their account at the 63rd Street office of the San Diego Bank in California.

Asked about the commission agreement, Dassault Vice-President Gérard David said by phone from Paris, "We don't know anything about it. Our president wasn't president then. It was 20 years ago. The law in France is that every 10 years we destroy the archives. We have nothing to say. It's not an answer, but it's the truth."

Al-Mahdi's network used Panama shell companies set up by Roger E. Watson, who had dual American-Panamanian citizenship. An official Panama document dated 1985 lists Watson as vice president of a company called Radistal; the president was Giuseppe Poggioli, a Lugano financial consultant who acknowledged in an e-mail that Al-Mahdi was his client. Watson and Poggioli also were officers of another Panama shell company, Dumynta. Poggioli said about Watson: "I think he was the consul of Panama in Lugano, but I am not 100 percent sure. I have no more contact with him since 1986 or 1987."

In 1985, Al-Mahdi was called back to Baghdad and imprisoned by Saddam, who suspected he was skimming funds, and he was beheaded in 1986. After Al-Mahdi's death, Saddam divided control of the network between the directors of the subsidiary companies of MEDP, Iraqi businessman Manhal Sheikh Kadir in London and the Lebanese Alfred Jawde in New York. Watson, who set up a residence in Como, Italy, replaced Borradori in 1987 as Saddam's financial consultant and managed Panama shell companies for the network via his L.R. European Company. Poggioli said that he also left the operation. Kadir and Watson could not be located, and Jawd declined to comment aftern being sent the documents. Borradori was reached, but he is of advanced age and has difficulty communicating.

An Aug. 13, 1990, document signed by International Aircraft Leasing Ltd. and Erfel Anstalt, both shell companies registered in Liechtenstein, noted past "consulting agreements" with Airbus Industries of Blagnac, France, March 7, 1985, and with MBB of Munich, Feb. 19 and March 18, 1985; and a contract with Thyssen Industries AG, Essen, West Germany, Nov. 26, 1987. An Erfel record of that date sets out commissions from MBB and Thyssen totaling $432,000.

The United Nations enacted comprehensive trade and weapons embargoes against Iraq in 1990. However, a 1991 Erfel document notes a $255,875 commission (5 percent) from Airbus and a $45,247 commission (5 percent) from Thyssen. A 1991 balance sheet for IAL cites a debt of 1,455,000 German marks due to Thyssen Industries AG, Essen, with FF 3,812 earmarked for Kensington Anstalt, an Al-Mahdi shell company.

IAL prepared a chart that showed that from 1986 to 1991, it collected "commissions" of $1,238,813 (Canadian) from MBB; $10,827,000 (U.S.) from Airbus; $3,900,000 (Canadian) from Thyssen; and DM 1,466,000 from Thyssen. Thyssen and Airbus, which now includes MBB, were sent the documents, but company officials declined to respond.

A confidential December 2001 report by Kroll, the international investigative agency, said that two Swiss companies, MEDP Corp. SA in Lugano and Midco Financial SA (in liquidation), were the holding companies that handled the money Saddam skimmed. It said, "Whilst in Geneva, Barzan was believed to have participated in financial schemes that included in the year 2000 the illegal sales of Iraqi petrol" and the purchase of weapons.

The unpublished report, authenticated by Kroll board chairman Jules Kroll, was commissioned by Kuwait after the Gulf War in an attempt to locate Iraqi assets it could claim as compensation. Jules Kroll explained, "In 1990 we were given the assignment and paid by the government of Kuwait." He said the goals were to identify Iraq's procurement network and to find assets outside that would be used to fuel the regime and buy weapons. The 2001 report was an update of the 1991 report."

Kroll investigators discovered that one of the middlemen helping Saddam was Marc Rich, the U.S. tax-evader pardoned by President Bill Clinton. Rich had been indicted by the United States in 1983 on charges he evaded more than $48 million in taxes and illegally bought oil from Iran during the 1979 hostage crisis. He fled the United States and settled in Switzerland. Kroll said, "We came up with evidence that through Marc Rich's Spanish subsidiary, he was using some Iranian cutouts -- specifically Bakhtiar, Iranians, whose family was close to Saddam -- he was using them to negotiate arrangements as it related to oil."

She continued, "The work was all turned over to OFAC [the Treasury Department's Office of Foreign Assets Control]." That means the Clinton administration knew about Rich's aid to Saddam.

The Kroll report also dealt with Nadhmi Auchi, reporting the Italian intelligence view that he was a "high-level Iraqi defense procurement and intelligence agent."

After Roger Watson became Saddam's financial consultant in 1987, he also became an adviser to Auchi's International Company of Banking and Financial Participations (CIPAF). According to official Italian documents, Auchi used Panama to launder kickbacks for two contracts for the Iraqi military. An Italian parliamentary report in 1987 said that one of them, Dowal, set up by Watson, was used to collect $23 million in hidden commissions on Baghdad's purchase of warships manufactured by the Italian shipyard, Cantieri Navali Riuniti.

In another case, the Operation "Clean Hands" (Mani Pulite) investigation in Italy revealed in 1993 that Auchi received about $40 million in hidden commissions to facilitate approval of a Franco-Italian engineering project to construct a pipeline from Iraq to Saudi Arabia. Italian banker Pierfrancesco Pacini Battaglia declared to investigators that he had received instructions to transfer these commissions to accounts in Panama established in the names of Iraqi officials.

Auchi's spokesman condemned any allegations of wrongdoing as "outrageous."

The totals from skimmed oil revenues and contract kickbacks from the late 1970s through the oil-for-food 1990s have been estimated by U.S. officials to reach $30 or $40 billion.

Jules Kroll said that until 9/11, a few staff members at the Treasury's Office of Foreign Assets Control "were the only ones spending any energy on this issue in any organized way." He said, "The level of ignorance at the CIA was total, at the FBI it was beyond total. The law-enforcement and intelligence community in the U.S. was behind the curve. It was of little interest to them."

[RKV]

Follow the money!

[Integrityrocks]

They could find a money trail, straight into Bill and Hillary's checking accounts from Suddam and the Rats would report it as "oops... well, we forgive them."

[TheSpottedOwl]

Kroll investigators discovered that one of the middlemen helping Saddam was Marc Rich, the U.S. tax-evader pardoned by President Bill Clinton. Rich had been indicted by the United States in 1983 on charges he evaded more than $48 million in taxes and illegally bought oil from Iran during the 1979 hostage crisis. He fled the United States and settled in Switzerland. Kroll said, "We came up with evidence that through Marc Rich's Spanish subsidiary, he was using some Iranian cutouts -- specifically Bakhtiar, Iranians, whose family was close to Saddam -- he was using them to negotiate arrangements as it related to oil."

She continued, "The work was all turned over to OFAC [the Treasury Department's Office of Foreign Assets Control]." That means the Clinton administration knew about Rich's aid to Saddam.

Well lookie there. Very interesting article.

[Grampa Dave]

Very interesting.

Where did al Qaeda get their funding? Saudi Arabia, Iraq, Iran, George $oreA$$ or who?

[Grampa Dave]

Any of these names besides Marc Rich ring a bell for you?

[Grampa Dave]

Follow the money and rats and Islamofascists will probably turn up.

[Grampa Dave]

How much of the money came from $oddomite's Oil for Food Scam?

[Grampa Dave]

Was this character one of the 52 on the Deck of Cards?

A 1983 document shows $1 million transferred from the Gottardo Satan account to Hamid Al-Tikriti's account at the National Bank of Kuwait. The recipient -- Abid Hamid Mahmoud Al-Tikriti -- was Saddam's presidential secretary and cousin, arrested by the United States in June 2003. In 1981, half-a-million dollars had been sent by Gottardo to Hamid Al-Tikriti's Kuwaiti bank account.

[RKV]

Knew how to shake down Rich, that is.

[Dog Gone]

I've heard of Bill Clinton.

[Future Useless Eater]

>>Was this character one of the 52 on the Deck of Cards?

Yes, and pretty high up... Ace of Diamonds, and he
also shared WMD-release-authority.

Only Ueegie and Queezy and Saddam were higher.

[Grampa Dave]

Yes, and pretty high up... Ace of Diamonds, and he also shared WMD-release-authority.

Only Ueegie and Queezy and Saddam were higher.

Then Ueegie and Queezy became worm food, and Saddam got a free oral and rectal exam courtesy of the US Army.

[TheSpottedOwl]

Oh yes. I wonder how much of that money is sitting in a Swiss bank account with Bill and Hill's sticky fingerprints all over it?

[ellery]

btttttt

[MamaLucci]

Marc Rich's name comes up again..................

[Tailgunner Joe]

bttt

[kcvl]

bookmarked

[kcvl]

I think you all will want to read this. Remember Marc Rich? Well guess what he has been doing?

[kcvl]

He was Saddam Hussein's Presidential Secretary as well as the WMD Release Authority. In addition, he was, according to CENTCOM, also Saddam's senior body guard, in addition to being the National Security Advisor.

A powerful figure in Saddam's regime, he controlled all access to Saddam (with the possible exceptions of Qusay and Uday Hussein), and also had the ability to override government decisions.

As a close assistant to Saddam Hussein, Abid Hamid Mahmud al-Tikriti also reportedly oversaw the Special Security Organization. That organization's primary task was to protect the Baath leadership in Iraq, and look out for potential signs of disloyalty in other military and security units.

Abid Hamid Mahmud al-Tikriti is also reported to have worked closely with Jamal Mustafa Abdullah Sultan al-Tikriti, one Saddam Hussein's cousin.

He was reported by CENTCOM to be under coalition custody on June 18, 2003.

[kcvl]

Liechtenstein was apparently among the numerous transit points for dirty monies being moved about by Nasreddin’s colleagues. “But Ercole Doninelli wasn’t the only dirty partner involved with Nasreddin International Group Holding Limited. On October 21, 1993, Ercole Doninelli was replaced in the administrative council by his wife Stefania. At the same time the trustee was changed. Instead of Enrico Walser, Nasreddin replaced him with Engelbert Schreiber Sr. Later Engelbert Schreiber jr. took over his father’s mandate. On March 3, 1997, the Press and Information Bureau of Liechtenstein received an anonymous letter sending information about Engelbert Schreiber Sr. and his involvement in money laundering. The letter (about the principality’s involvement with criminal groups like the Italian mafia and the Columbian drug cartel) claimed that the police chief of Liechtenstein was, since 1985, in the pay of Medellin boss Pablo Escobar. The letter said the contact came about through Engelbert Schreiber via the Caracas/Venezuela mafia families Cuntrera, Caruana, and Caldarella, with whom Schreiber stands in a close relationship.” (Idem.)

“Then there was the report from the German BND that cited Schreiber and others who were involved in money laundering without any punishment from Liechtenstein. The principality was upset that the German secret service intercepted telephone calls and siphoned off electronic data from the banks. But after the publication of the BND papers, an outspoken threat to have the Financial Action Task Force (FATF) of the OECD to put Liechtenstein on the black list of money laundering states worked wonders. Schreiber and some others had a period of shame where they had to distance themselves as trustees in business groups. Was it an accident, the investigators wondered, why the Muslim Brother Ahmed Idris Nasreddin—out of the countless number of Liechtenstein trustees—would choose a man of Engelbert Schreiber’s caliber?” (Idem.)

******

Intercession by the Saudi interior minister may well have helped to defer legal action against Nada & company. “In spite of the evidence, Youssef Nada and his friends have been left alone. The Europeans feel that the U.S. has refused to share information with them. Also the Swiss investigators made no progress against al-Taqwa because they got no information from America. There is a final element in this. In the beginning of May 2002, Saudi Arabia’s Interior Minister visited Switzerland. Officially Prince Nayif bin Abdulaziz al-Saud went to Switzerland for health reasons. On one evening, the Prince visited Bern. Reportedly the Prince and another leading representative of a different Arab state sent the Swiss a warning that any showing of the books and activities of Arab finance concerns and Islamic organizations would be injurious for the Swiss, because deposited capital can be moved to another country. The visit apparently brought results. After the visit the Swiss have said that there is no information or suggestion that either al-Taqwa or the Nasreddin Group was financially involved with 9/11.” (Ibid.; p. 12.)