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Former Banker: U.S. Officials Knew About Iraq Loans

September 20, 1992

ATLANTA (AP) _ The former branch manager of an Italian-owned bank who admitted illegally loaning billions of dollars to Iraq alleged in a television interview that government officials knew about the scheme.

But Christopher Drogoul didn’t name any government or banking officials aware of the loans, and a prosecutor denied the allegations. The comments were made in an interview broadcast Sunday on ″60 Minutes.″

Drogoul said the U.S. government, Banca Nazionale del Lavoro and Iraqi officials made him the fall guy in what he said was a well-known plan to loan Iraq billions for weapons and food.

″Certainly, I would have to say that the intelligence community monitored our activities from the outset. There was general knowledge in Washington and in the financial community,″ he said.

Drogoul’s lawyers have made similar arguments in court, claiming BNL executives in Rome were aware of his activities and that U.S. officials approved the scheme as part of a pre-Gulf War policy of extending aid to Iraq.

Drogoul, former manager of the BNL’s Atlanta branch, pleaded guilty in June to 60 counts of bank fraud in connection with the scheme to lend $5.5 billion to Iraq. But Drogoul last week told a judge he wants to withdraw the plea. A hearing was scheduled for Tuesday.

Acting U.S. Attorney Gerrilyn Brill told ″60 Minutes″ that Drogoul masterminded the scheme alone, against the orders of BNL officials in Rome.

″Mr. Drogoul is a con man. He is a criminal,″ Ms. Brill said. ″Christopher Drogoul, unbeknownst to his superiors at BNL, went completely beyond the authority that he had in loaning money. And then he went to extreme efforts to cover up what he did.″

Drogoul, a dual citizen of the United States and France, was in France with his wife when federal agents raided his Atlanta office in 1989.

He said he willingly came back to the United States ″because I felt that I was covered or protected by those people monitoring our activities, which meant the U.S. government, the Italian government and the Iraqis.″

Ms. Brill, however, denied any knowledge of the bank’s activities by U.S. authorities. ″There is no evidence that anyone in the United States government knew that BNL Atlanta was the source of that financing,″ she said.

Ms. Brill said prosecutors did not interview high-level government officials because Drogoul never alleged wrongdoing on the part of a specific individual.

Drogoul could not name a U.S. government official who advised him on loaning money to Iraq.

″I never sat down and had lunch with anybody who was a formal official of the U.S. government who said, ‘Chris, please go right ahead and give the Iraqis $2 billion for us’ because that is not how the U.S. government works,″ he said.

Drogoul said he knew the money he loaned Iraq went to fund that country’s weapons systems, but that he didn’t consider the implications. ″I really hadn’t thought about it too much,″ he said. ″I felt that what I did was in furtherance of U.S. government policy.″

Drogoul was indicted last year. Money lent by the bank was used in part to fund Iraq’s military buildup before the 1990 invasion of Kuwait, congressional critics allege.

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