Senate panel's chief demands special probe in alleged Iraq loan cover-up

October 15, 1992|By Los Angeles Times

WASHINGTON -- The chairman of the Senate Intelligence Committee called yesterday for an independent counsel to investigate whether the Department of Justice and the CIA broke laws in submitting a misleading document to a federal court last month in a sensitive Iraqi loan case.

In an unusual public statement, Intelligence Chairman David L. Boren, an Oklahoma Democrat, said the Department of Justice could no longer be trusted to investigate the matter because it advised the CIA to provide the misleading information.

"A truly independent investigation is required to determine whether federal crimes were committed in the government's handling of the . . . case," Mr. Boren said in a letter to Attorney General William P. Barr seeking a special prosecutor.

Mr. Boren and others said their concerns were heightened by disclosures this week that the department was investigating FBI Director William S. Sessions on a number of allegations, a development they interpreted as a possible attempt to stifle an independent FBI investigation of the misleading document.

Mr. Boren's request thrusts the department into a highly charged political arena where its impartiality and integrity are being challenged.

The Democratic presidential ticket has criticized the department's handling of the case of Banca Nazionale del Lavoro, or BNL, as part of its broadside against the Bush TC administration. Other criticism comes from less likely sources, such as the CIA and Mr. Boren, whose committee has a tradition of bipartisanship and rarely engages in political attacks.

With Congress and others demanding investigations by independent counsels, rather than by the Justice Department, legal experts are wondering whether the agency's role as the nation's paramount law enforcement agency is being eroded.

Daniel J. Meador, a law professor at the University of Virginia and expert on the Justice Department, said: "The attorney general is appointed by the president and typically loyal to the president. Still, he is charged with enforcing the law impartially and we get worried if that balance is not struck properly."

The controversy over the misleading information erupted in public after two days of closed-door hearings before the Intelligence Committee last week. It was disclosed that a Sept. 17 CIA letter to the federal judge handling the BNL case in Atlanta did not reflect several pieces of critical classified information in agency files.

The case involves $5 billion in loans made to Iraq before the gulf war by the Atlanta branch of BNL, which is owned by Italy's government. Some of the loans were used for military purposes and the handling of the case has been criticized sharply in Congress in recent months.

CIA officials told the intelligence committee that the department had offered "strong advice" not to clarify the letter to the judge. However, a senior Justice lawyer said the CIA was told to make its own decision.

Both agencies tried to dampen the apparent feud with public statements, but the disclosure sparked renewed calls for Mr. Barr to seek an independent counsel to investigate the BNL case.

A department official who asked that his name be withheld described the requests by Mr. Boren and two other Democrats in recent days as "political piling on," and speculated that similar calls would be heard until election day.

Sources close to Sen. Joseph R. Biden Jr., a Delaware Democrat who is chairman of the Senate Judiciary Committee, said Mr. Biden was considering whether to seek an independent counsel, but that no decision was expected for a few days.

Sen. John H. Chafee, a Rhode Island Republican on the Intelligence committee, refused to characterize Mr. Boren's request as political, but he said the Mr. Boren acted too quickly.

"What we have to date suggests that there was some bungling and nothing so far suggests there was anything sinister," Mr. Chafee said in an interview. "I certainly believe we ought to continue to dig into this, but to say that we need a special prosecutor at this point is inappropriate."

Mr. Boren said he acted after news accounts said that the Department of Justice also is investigating allegations that Mr. Sessions and his wife and a special assistant misused government telephones and that Mr. Sessions provided conflicting statements about his tax status.

"It really troubles me and made me question how we can have confidence in the Justice Department in this matter," Mr. Boren said in an interview.

Rep. Don Edwards, a California Democrat who is chairman of a House Judiciary subcommittee that oversees the FBI and is a Sessions supporter, also interpreted the Sessions reports as an attempt to thwart the FBI inquiry into the BNL matter.

"The fact that they [Justice Department sources] are blabbing like Niagara Falls violates all their rules and is very, very suspicious, almost obscene," Mr. Edwards said in an interview.

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