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Former Italian Envoy, Under Arrest Warrant, To Be Subpoenaed in U.S.

November 3, 1993

WASHINGTON (AP) _ Italy’s former ambassador to the United States - caught up in a corruption scandal - is expected to be subpoenaed by a House committee regarding U.S. aid to Iraq’s Saddam Hussein channeled through a major Italian bank.

Rep. Henry B. Gonzalez, D-Texas, chairman of the House Banking Committee, plans to ask the panel members Thursday for permission to subpoena the former ambassador, Rinaldo Petrignani, and six others associated with the Banca Nazionale del Lavoro.

″Documents reveal that Petrignani asked (U.S. government) officials for ‘damage control’ when it came to″ federal prosecutors’ investigation of Banca Nazionale del Lavoro, Gonzalez said in a statement.

Gonzalez plans to ask Petrignani for details of his meetings with former attorney general Dick Thornburgh and other Bush administration officials, said a banking committee spokesperson, who asked not to be identified by name.

BNL, which is owned by the Italian government, is one of that country’s largest banks. In a politically charged fraud case, U.S. prosecutors accused its Atlanta, Ga., office of funneling $5.5 billion in unauthorized loans to Iraq. Some of the loans allegedly were used to build up Saddam’s military and nuclear arsenals in the years preceding the Gulf War.

Gonzalez wants Petrignani, who now practices law in Washington, and the others to testify at a committee hearing next Tuesday.

Stefano Ronca, press counselor at the Italian Embassy, said he believed the former ambassador is not in Washington. Recent statements by Petrignani pledging his cooperation indicate that he ″soon will put himself at the disposal″ of Italian authorities, Ronca said.

A U.S. government source, who spoke on condition of anonymity, also said Petrignani was expected to return voluntarily to Italy in response to the arrest warrant.

Italian prosecutors issued the warrant last week as part of a widening corruption probe across Italy. According to Italian government sources, Petrignani is charged with accepting a bribe from the state-run ENI energy conglomerate and SAI, a privately owned insurance group. The sources spoke on condition they not be named.

Petrignani told The Associated Press last week that he was ″absolutely not involved″ in any of the bribery charges. He wouldn’t say when he planned to surrender to Italian authorities, but said he was ready to fully cooperate.

Petrignani and his attorney, former State Department legal adviser Abraham Sofaer, did not immediately return telephone calls Wednesday seeking comment.

Justice Department spokesman John Russell said the department had not received a request from the Italian government to extradite Petrignani. He declined further comment.

Others to be subpoenaed for the House committee include Christopher Drogoul, the former manager of BNL’s Atlanta operation. Drogoul, now serving a prison term, pleaded guilty last September to three charges of bank fraud.

U.S. prosecutors accused Drogoul of masterminding the loan scheme. But his defense lawyers said he was merely a tool in an ambitious scheme by the United States, Italy, Britain and Germany to secretly arm Iraq against Iran in the bitter 1980-88 war between the two nations.

Drogoul has argued that he acted with full authority from his bosses in Rome and that he understood that the U.S. government also supported the lending schemes.

A December 1992 report by an independent counsel who investigated the BNL case said that Petrignani, through meetings with Thornburgh and other Bush administration officials, tried to influence the course of the Justice Department probe.

The report noted that Petrignani met with Thornburgh and other high-level officials at the Justice Department and State Department in March and April of 1990, contending that BNL had been duped by Drogoul.

Shortly after that, Justice Department officials in Washington intervened in the investigation in Atlanta, changing the chief local prosecutor.

Thornburgh has denied discussing the investigation with Petrignani. He reaffirmed that position Wednesday, saying in a telephone interview that he met with the former ambassador ″on a variety of matters but none of those meetings had any bearing″ on the BNL probe.

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