The great Saddam cash hunt is afoot. The U.S. Treasury believes it has identified more than $1 billion in previously unknown accounts and the Bank of England already has frozen $648 million in British banks. But some experts say that could amount to less than 5 to 10 percent of what the U.S. and British governments could grab from what Saddam Hussein and his family have stashed if Iraq's former finance minister, Hikmat Ibrahim al-Azzawi, and Saddam's half-brother, Barzan al-Tikriti, both currently in U.S. custody, tell what they know about the whereabouts of the deposed dictator's personal fortune.
Estimates of the Iraqi leader's wealth range widely--from $2 billion to $40 billion. "There is a network of money that has been sent out of the country, and it has been given to people to invest or to keep," said Charles Forrest of the U.S.-funded International Campaign to Indict Iraqi War Criminals.
Others doubt the Saddam fortune will end up amounting to much. Forbes magazine recently estimated the ousted Iraqi leader's worth at $2 billion--down from $7 billion in 2000. The magazine says Saddam squandered much of his wealth on building 50 presidential palaces across Iraq. Others speculate that he was forced to dip into his personal fortune to obtain spare parts and weapons for the army that kept him in power. Meanwhile, the Bush administration's financial warriors and the sleuths working for creditors eager to collect on decades-old debts are convinced there will be sizable amounts of cash around to seize.
Finance minister al-Azzawi could be the key. He was a crucial figure in helping Saddam circumvent economic sanctions imposed by the United Nations after Iraq invaded Kuwait in 1990. On April 19, a group of Iraqis acting as a local police force handed al-Azzawi over to U.S. Marines--the fifth top member of the ousted regime to fall into coalition hands.
The big question now is how much al-Azzawi knows--so too with the former dictator's half-brother, who in the 1980s and for much of the 1990s oversaw Saddam's financial empire. The suspicious Saddam always was careful to rule by division and never trusted fully any of his inner circle, say Iraq specialists, so no one individual is likely to know all the secrets.
As the financial sleuths in Washington and London dig into Saddam's finances and try to track his cash, other figures are likely to pop up who may be able to cast some light on the missing boodle. These may include non-Iraqi bankers and moneymen such as the Swiss-based Elio Borradori, who has started to talk to the Western press about how he advised the Iraqi leader for more than a decade on how to channel hundreds of millions of dollars into offshore companies scattered across the globe.
Borradori served as a company trustee for Saddam in the tax havens of Liechtenstein and Switzerland, and oversaw some of the financial aspects of the Iraqi dictator's arms deals and development contracts. He says a lot of money was funneled in the 1980s into companies controlled by Saddam appointees operating in Panama, the Bahamas and Switzerland. The appointees included diplomats, businessmen and expatriates loyal to Saddam.
Borradori recently told the London Sunday Times that millions apparently were moved through an account code-named "Satan" at the Banca del Gottardo in Nassau in the Bahamas. Just before Gulf War I in 1991, $1 billion was wired quickly via the Satan account alone to be hidden around the world. Bank of England sources say that account still was being used until fairly recently.
The Bush administration has said that any funds looted from Iraq by Saddam, his family and his cronies should be devoted to the rebuilding of Iraq. "The world must find, freeze and return Iraqi money for the Iraqi people and their future," U.S. Treasury Secretary John Snow declared March 21. But some creditors are expected to object and try to persuade foreign courts that they, too, have a claim on the assets.
The sources of Saddam's money are hardly secret. Saddam's regime pretty much openly smuggled oil out of Iraq via Jordan, Turkey and Syria, and he profited greatly from the Oil-for-Food program by imposing a U.N.-tolerated kickback of 30 to 50 cents per barrel. The General Accounting Office (GAO) estimates the regime earned $6.6 billion in oil smuggling and surcharges from 1997 to 2001, although some other organizations reckon that the GAO figure is short by about $3 billion.
At the same time as they were skimming the Oil-for-Food program, Saddam and his two sons, Uday and Qusay, were the biggest smugglers into Iraq of cigarettes and luxury goods, though there appear to be no reliable estimates of how much this illicit trade may have brought the family.
But finding the money the family and its closest cronies amassed and being able to seize it will be daunting tasks. Some experts say the fortune may be hidden so effectively that the full amount of the family's assets throughout the world never will be known.
The Bush administration has found it hard enough to follow the complex money trail of Osama bin Laden and his al-Qaeda group, with the result that little of the terrorist group's assets have in fact been seized. While the Bush administration and European governments have trumpeted their collaborative worldwide success since Sept. 11, 2001, in freezing $104 million in al-Qaeda--linked assets, officials tasked with waging a financial war against terrorists say that amounts to peanuts. And most of it belongs not to bin Laden but to the Taliban.
Saddam's finances likely are as cleverly hidden as bin Laden's. A U.S. Treasury blacklist pays testimony to the likely far-flung nature of Saddam's financial empire; the list names individuals and companies in Britain, Jordan, Egypt and the United Arab Emirates. Rafidain Bank of Iraq, which is on the U.S. blacklist, has branches spread across the Middle East and may prove to be an important link in following Saddam's money trail. The bank is thought to have been a critical departure point for much of the regime's cash, and it transferred funds on Saddam's orders to banks worldwide.
In the 1980s, Saddam is known to have invested heavily in the West, including in the French company that owns Hachette, the publisher of Elle magazine and Car & Driver. Saddam's stake in Hachette is worth about $90 million but has been frozen since 1990.
After the Gulf War I, Saddam and his associates were much more careful about where they put their money, fearful that the accounts would be frozen. U.S. and Bank of England officials say that Saddam's money was moved frequently and that the bulk was kept in bank deposits and government bonds, including U.S. Treasuries. Other money, they say, was lodged in offshore front companies. That appears to dovetail with what the retired Swiss banker Borradori says. According to him, Saddam's money network is byzantine, involving a dizzying array of offshore companies. He himself knew of 47 bank accounts.
Court documents in Switzerland and Italy suggest that one of the main corporate entities used by Saddam was a company called Mediterranean Enterprises Development Projects, which is registered in Switzerland and has offices in New York City, Tokyo, London and Paris. It in turn controlled about 300 other companies, mainly in Liechtenstein and Panama. Three other key companies--Dumynta, Radistal and Technoservice International--are believed to have handled hundreds of millions of dollars for Saddam in the 1980s and probably remained conduits in the 1990s, too.
The challenge for the West's financial warriors won't stop at locating the cash. There likely will be a massive squabble over who can lay claim to any of Saddam's assets, with creditors ranging from France and Russia to South Korea's Hyundai Corp. all arguing that they deserve some of what is recovered. Iraq is believed to owe more than $100 billion on debts from the 1980s alone.
Then there is Kuwait, which likely will demand enforcement of reparations agreed to by Iraq in 1991.
And despite the gung-ho attitude of some neoconservative hawks in the Bush administration, there is international law and the laws of the individual countries where money is found to be taken into account as well. Under U.S. law, the president is allowed to seize assets of an enemy state, but courts in other countries aren't likely to freeze assets and accounts simply because they receive a request from Washington.
European authorities, even if they do want to help, are going to be bound by the laws in their countries that require such funds be linked to wrongdoing. Some U.S. officials argue that the United Nations could be useful here and hope that some procedure can be agreed to by the Security Council. U.S Treasury Counsel David Aufhauser maintains that "any assets accrued by Iraqis since 1990 are violations of U.N. sanctions" and as such are illicit and vulnerable to seizure. But that may not be the view of overseas courts. So even after the cash is found, it could be ensnared in legal systems across the world for years.
JAMIE DETTMER IS A SENIOR EDITOR FOR Insight.…