Cover-up of secret U.S. aid to Iraq aired in House Judiciary hearing Strategy said to aim to keep top officials clean.

June 24, 1992|By New York Times News Service

WASHINGTON -- At a politically charged hearing, the House Judiciary Committee heard accusations yesterday of an administration cover-up of its aid to Iraq before the Persian Gulf War, including a strategy not to implicate top government officials.

A committee member charged that the White House, State Department and the office of the secretary of commerce were consulted before the Bureau of Export Administration altered documents that Congress had requested about sales to Iraq.

Frank Lemay, a State Department aide who had made a written warning of evidence that government loan guarantees to Iraq were being used to build its military arsenal, said the circulation of his memorandum was severely restricted. But he added that his warnings had been delivered to Secretary of State James Baker a month before the administration authorized an additional $1 billion in loan guarantees.

A congressional chairman joined a federal judge in accusing the Justice Department of silencing Christopher P. Drogoul, a former official of the Atlanta branch of the Banca Nazionale del Lavoro, which gave Iraq $5 billion in illegal loans, much of it backed by U.S. loan guarantees.

Mr. Drogoul, who had planned to plead guilty to a 347-count indictment and make a public statement implicating others involved in the scheme, was persuaded by Justice Department officials to plead guilty to 60 counts and to discuss the case only with them for two months before making a public statement.

"They didn't want him to talk about something," said Rep. Jack Brooks, the Texas Democrat who heads the Judiciary Committee, which held the hearing to determine whether to seek an independent counsel to investigate American policy toward Iraq and assertions of a subsequent cover-up.

"It's pretty inherently sinister," Mr. Brooks said. "They made the deal for him not to sing like a bird."

Mr. Brooks released a letter from U.S. District Judge Marvin H. Shoob, concerning his displeasure with the Justice Department's handling of Mr. Drogoul's plea bargain.

"In view of the substantial public and media interest in this case, I felt that it was important and necessary that a full disclosure, under oath, be made by Drogoul, as was promised, at the time of the plea," the judge wrote.

But Robert S. Mueller III, assistant attorney general in charge of the Criminal Division, told the committee that there was no desire to muzzle Mr. Drogoul, but rather that the bank scheme was so complicated that it would take weeks to describe.

Much of the hearing dealt with the circumstances surrounding the Commerce Department's alteration of 68 license records given to the House Government Operations subcommittee on commerce, consumer and monetary affairs. The Commerce Department's inspector general, Frank DeGeorge, testified that changes to five truck license records that concealed their military use were "unjustified and misleading," but that almost all the other changes were "inconsequential."

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