Posted on 05/12/2003 8:55:10 AM PDT by Gabrielle Reilly
Saddam's missing billions and link to al-Qaida
Julian Borger in Washington Wednesday April 16, 2003 The Guardian
In the days before the fall of Baghdad, and the explosion of looting on the streets of the capital, a far more damaging form of looting was already under way as Iraqi bank accounts were ransacked and millions of dollars were transferred into private accounts abroad, Middle Eastern banking sources said yesterday. The flurry of transfers that have been spotted, going mainly through Europe to accounts in Jordanian and Palestinian banks, are thought to be the tip of a vast financial iceberg, kept afloat by Saddam Hussein, his family and his regime for more than two decades.
US investigators are scrambling to track down the missing money, estimated at between $5bn and $40bn (£3.2m and £25.bn), but some financial experts believe much of it has gone for good, and may have slipped into the hands of extremist groups such as al-Qaida.
One official who has seen reports from Middle Eastern banks told the Guardian he had seen details of at least five transfers of between $100,000 and $1m going to a single bank whose name he provided but did not want published.
"We saw it pick up right at the beginning of the shooting war. Then it really peaked the day before and the day of the fall of Saddam's statue [in Baghdad]. We haven't really seen anything since," the official said.
"My impression is there is a lot more going on, because this is not something we were looking for particularly. It just went across our radar. And as far as I know there is nothing illegal about the transfers."
Officials in Washington are worried that Iraq's highly centralised economy makes it particularly vulnerable to asset-stripping.
One Middle Eastern banking expert, who did not want to be named, criticised the Bush administration for failing to set up an interim fund that would have formally taken ownership of Iraqi state banks and other institutions, stemming the haemorrhage of funds.
"What you've got is special forces going through documents and when they come to bank accounts they just stick them in a box for people to look at later. Meanwhile, they're being emptied of funds," the expert said.
Passwords
The transfers could have been completed by anyone with access to the right bank account details and passwords.
In the cases cited, instructions for the transactions were sent by telephone, email or fax to correspondent banks in Europe with counterparts in Iraq. Once in private accounts the money can easily be converted into untraceable commodities such as gold and diamonds.
John Fawcett, an investigator who co-wrote a study last year - Sources of Revenue for Saddam and Sons - for the Coalition for International Justice said the transfers could be made by trustees appointed by the Iraqi leadership in Switzerland, Liechtenstein and other banking capitals.
In some cases, he said, the same middlemen were being used by al-Qaida, and other extremist groups, who may now have access to the Iraqi money. Mr Fawcett said: "These trustees have no protection now. They're open to one of these groups contacting them and saying transfer the money now there's no one looking, and if they say they can't, they're open to pressure."
Calculations
Mr Fawcett, who is investigating the funding of al-Qaida for the New York law firm Kreindler & Kreindler on behalf of families of September 11 victims, has tried to calculate how much money the Iraqi regime hid in foreign bank accounts by estimating how much revenue it took in from illegal oil sales and other smuggling operations, and subtracting the costs of maintaining its power and standard of living.
He believes some of the higher estimates of the missing Saddam fortune may be an exaggeration and puts it at somewhere between $5bn and $10bn.
The general accounting office of the US Congress has produced a report estimating that the Iraqi government raised more than $6bn between 1997 and 2001 from various smuggling enterprises.
Much of it was earned by selling oil to Turkey and Syria in deals outside the UN-run oil for food programme.
The Washington Post quoted a senior US treasury official as saying that since the start of the war, the Bush administration had tracked down about $1.2bn in illicit Iraqi assets around the world which have not yet been legally blocked.
In addition the $1.7bn frozen after the invasion of Kuwait in 1990 is expected to be handed over to a new Iraqi government.
Apart from Saddam, the person who knew most about the regime's clandestine financial network was his half-brother Barzan Ibrahim al-Tikriti. He may well be dead. According to some reports he was killed when his farm, west of Baghdad, was bombed on Friday.
As the Iraqi ambassador to the United Nations in Geneva for 10 years until 1998, Tikriti was responsible for much of the family's finances abroad.
He returned to Switzerland last autumn when American intentions towards Iraq were already clear, in what some Iraqi observers believed was a mission aimed at making contingency banking plans in the event of Saddam's fall.
Tikriti slipped out of the country in October after demands that he should be arrested and charged with crimes against humanity.
If he was killed, many of Saddam's biggest financial secrets may have died with him.
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