Investigation Breakdowns Cited in US-Iraq Scandal A New Senate Intelligence Committee Report Finds `Serious Errors in Judgment' by Officials

Article excerpt

NEWLY released findings of a bipartisan congressional inquiry into the United States government's probe of illegally financed Iraqi arms deals may have raised more questions than it answered.

Faulting the Central Intelligence Agency and the Justice Department for a mishandled investigation into the so-called Banco Nazionale del Lavoro (BNL) affair, the Senate Select Committee on Intelligence found "breakdowns in the relationship between intelligence agencies and law enforcement, combined with serious errors in judgment by government officials...."

BNL is the Italian bank whose Atlanta-based branch forwarded $4 billion in fraudulent loans that helped oil Iraq's war machine from 1984 to 1989.

In its 163-page report issued on Friday, the committee unearthed "no direct documentary or testimonial evidence which showed that officials intended to mislead the public or the court." But the report offers disturbing proof that the CIA, acting on advice from the Federal Bureau of Investigation, failed to share with the Justice Department documents that could embarrass the federal government or hurt its prosecution of BNL's Atlanta branch manager, who faces US charges of masterminding the scheme. Withheld information

One example of what was withheld was a December 1990 intelligence report, cited publicly for the first time by the committee's report, that alleged "US, Italian, and Iraqi officials had engaged in unlawful conduct in connection with the BNL-Atlanta loan case."

This and other claims of calculated wrongdoing were rebuffed by CIA Inspector General Frederick Hitz, who also released a report on the BNL investigation on Friday.

He said that though "mistakes were clearly made by agency officials," they were due to "carelessness and a number of instances of poor judgment."

In December, then-Attorney General William Barr, who accepted the recommendation of a special BNL investigator he appointed, rebuked efforts to have an independent counsel pursue charges of government obstruction of justice and coverup.

Mr. Barr's appointed special investigator, retired federal Judge Frederick Lacey, called the Justice Department's action in the BNL case "almost perfect" and attacked those alleging wrongdoing for trying to undermine President Bush during an election year.

Dissenting members of the Senate Select Committee on Intelligence, as well as those who signed onto the committee's report, say that what was unveiled needs further exploration, in addition to many other elements that were not even covered by the committee's inquiry.

A committee member, Sen. Howard Metzenbaum (D) of Ohio, complained that the report "did not cover the role of the Commerce, Agriculture, Defense, and State Departments' possible wrongdoing."

Committee member Sen. …