Clinton and Iraqgate

William Safire

January 26, 1993|By William Safire

THE scandal called Iraqgate began, I am told, with a personal request in early 1989 from a foreign head of state to President George Bush on a matter requiring the assistance of Iraqi President Saddam Hussein.

The State Department's Middle East bureau was asked to come up with some way of buying the dictator's favor. Foreign aid was impossible, given congressional resistance to helping the man who had just poison-gassed the Kurds.

A backdoor method was found, circumventing the law and the appropriations intent of Congress. Despite Federal Reserve objections about guaranteeing funds to a non-creditworthy borrower, the Department of Agriculture's subsidy program was used to finance Iraqi grain purchases.

An Italian state-owned bank was the conduit for these U.S.-guaranteed billions. When the FBI raided the bank's Atlanta office and found corruption was rank in this deal, the Italians worried that they might be left holding the bag.

That's why the Italian ambassador in Washington was told to raise this criminal case "to a political level." To avert creating embarrassing logs and records, it was arranged that he see the U.S. attorney general at a White House reception.

Just three days before that meeting, the chief of our Criminal Division prepared a report updating his boss on the Banca Lavoro case. (Who asked him to, and why that week? My suspicion: Justice was aware of the planned approach.)

The contact was made, reported the ambassador, now working for a U.S. law firm, who has never been interrogated by the FBI about it. Attorney General Dick Thornburgh, now in a U.N. sinecure, reportedly claims to remember nothing about the meeting.

But consider the stakes at that moment. If the Justice Department believed the bank headquarters in Rome was aware of the corrupt Iraqi financing, the U.S. might not have to make good on its guarantee. On the other hand, if bank headquarters in Rome were the "victim," and its Atlanta office manager could jTC take the fall for the whole bank, then the U.S by law would have to pay up.

I cannot prove a fix was discussed; journalists do not have power of subpoena backed up by the threat of perjury. But plain logic suggests that an Italian motive existed for a $2 billion fix. Our government also had a motive for acceding to the biggest monetary fix in history: We and the British may have pulled the Italians into this deal to bribe Saddam in the first place.

Now that the Justice Department is changing political hands, what can be done to get to the bottom of Iraqgate?

First, the Judiciary Committee chairmen -- Joe Biden, D-Del., in -- the Senate and Jack Brooks, D-Texas, in the House -- should propose a new law creating independent counsel to replace the one Bush let expire.

Second, Majority Leader Mitchell, D-Maine, and Speaker Foley, D-Wash., should get together on a joint congressional investigation -- one that will not burden the future independent counsel with immunity grants to witnesses.

Finally, President Clinton should, as he promised, direct his new attorney general -- as experienced, we can hope, as Robert Morgenthau -- to seek the non-partisan outside counsel.

A frisson of doubt about Mr. Clinton's commitment to clean-up can be spotted in a small New York Times story the other day: James "Jock" Covey is expected to be appointed an assistant secretary of defense.

Mr. Covey served in the Middle East bureau at the very heart of the Saddam buildup. He was a drafter of the infamous National Security Directive 26 to support Iraq, and -- despite CIA reports of the dictator's purchasing of nuclear materials and missiles -- prepared memos for James A. Baker III urging Mr. Bush to direct more financing to Saddam.

People determine policy. Mr. Clinton has already reappointed Edward Djerejian and two of his key aides to the Middle East bureau, and Mr. Baker's closest policy guide, Dennis ("Strongly Condemn Israel") Ross, to a supposedly temporary consultancy on Mideast talks.

But sometimes continuity asks too much. Mr. Covey was up to his hips in at least a sleazy blunder, and reward with a promotion by his Arabist cohort in the new administration sends exactly the wrong signal.

"Let's move on" is the plea of Iraqgate's perpetrators. Better to move in -- on how the public was misled and justice was obstructed.

William Safire is a columnist for the New York Times.

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