Path: bloom-picayune.mit.edu!snorkelwacker.mit.edu!americast.com!americast.com!americast-post Newsgroups: americast.twt.news From: americast-post@AmeriCast.Com Organization: American Cybercasting Approved: americast-post@AmeriCast.com Subject: Dec. 8 deadline set for first Iraq loans probe report Date: Sat, 14 Nov 92 16:22:11 EST Message-ID: \SE A;NATION \HD Dec. 8 deadline set for first Iraq loans probe report \BY Jerry Seper \CR THE WASHINGTON TIMES Attorney General William P. Barr gave special counsel Frederick B. Lacey until Dec. 8 to wrap up a preliminary investigation into the Bush administration's handling of a case involving questionable bank loans to the Iraqi government. The investigation, according to Justice Department officials, will determine whether Mr. Barr seeks appointment of an independent counsel to look into the politically sensitive case - as sought by Democrats in the House and Senate. Mr. Lacey, a former federal judge, was asked by Mr. Barr on Oct. 16 to conduct an inquiry to determine the legality of efforts by the Justice Department, FBI and CIA in their investigations into illicit loans by Italy's Banca Nazionale del Lavaro (BNL) to or on behalf of Iraq. In an Oct. 26 letter to Mr. Barr, not made public, Mr. Lacey said he found "specific allegations by credible sources of wrongdoing," although he said he was "far from concluding that there has been violation of any federal statute, even assuming the validity of all of the information gathered to date." Mr. Lacey said, however, there was sufficient reason to "up the notch" and start a preliminary investigation. Mr. Barr then ordered him to continue the probe to determine whether enough evidence existed to warrant appointment of an independent counsel. The Senate Intelligence Committee has been looking into allegations that the Justice Department and CIA covered up illegal Bush administration loans to Iraq. The alleged conspiracy involved $5.5 billion in loans, guaranteed in part by the U.S. government and provided by the Atlanta branch of BNL. The loans were used by Iraqi government officials to buy weapons and food before the Gulf war. The Altanta BNL branch manager, Christopher Drogoul, faces trial next year on nearly 350 counts of fraud. Sen. David Boren, committee chairman, has said that the Justice Department and CIA had information from agency sources in Rome showing that BNL officials were aware of Mr. Drogoul's activities but failed to go after those involved in order to shield a flawed policy of support for Iraq. The Intelligence Committee, the House Judiciary Committee and the Senate Judiciary Committee have been looking into the matter. Democrats on the Senate Judiciary Committee formally asked Mr. Barr on Oct. 19 to appoint an independent counsel. Justice Department officials said Mr. Barr will notify Senate Judiciary Committee members next week of his decision to give Mr. Lacey until Dec. 8 to complete the investigation. Mr. Lacey normally would have 90 days to complete the probe, but the independent counsel statute expires Dec. 15. When the Lacey investigation is finished, the attorney general can accept or reject it. If he seeks an independent counsel, he will make that recommendation to a three-judge panel, who will make the actual appointment. The ongoing Senate and House investigations resulted in interagency squabbles among the Justice Department, the FBI and the CIA, all of whom deny wrongdoing. The allegations also became presidential campaign fodder. President-elect Bill Clinton and Vice President-elect Al Gore attacked the Bush administration, suggesting Mr. Bush was involved in a cover-up. Mr. Barr refused a House Judiciary Committee request in August to appoint an independent counsel. He said in October he changed his mind and agreed to investigate the matter because "in the current politically charged environment, nothing could be worse than to have this matter tried in the press based on allegations, rumor and leaks." This article is copyright 1992 The Washington Times. Redistribution to other sites is not permitted except by arrangement with American Cybercasting Corporation. For more information, send-email to usa@AmeriCast.COM