FTR#463—Interview with Lucy Komisar about Saddam’s
Money Network—(Two 30-minute segments)
(Sources are noted in parentheses.) (Recorded on 6/6/2004.)
Note: FTR#’s
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Summary of FTR#463—(Note:
The massive volume of “For The Record” programs about 9/11 and related topics
is summarized and analyzed in the periodically-updated description for FTR#391. FTR#’s 454, 455, 456 are
compilations of much of the key documentation culled from Mr. Emory’s
investigation into 9/11. Along with FTR#391, they
should give listeners/readers a substantive grasp of this momentous event. It
is recommended that listeners use this description and e-mail it to others.
Also: The book “Martin Bormann: Nazi in Exile”
is available at About Paul Manning. In addition,
the professional history of the late Paul Manning, the book’s author, is
presented in the description About Paul Manning.
This enables listeners to acquaint others with Mr. Manning’s journalistic
credentials. Key material from the book is synopsized in an extended
description for FTR#305. Understanding the
Bormann organization is essential to comprehending the concept of “the
Underground Reich.”) Supplementing information set forth in FTR#’s 413, 417, 423, this program documents Saddam
Hussein’s financial machinations and highlights the institutions and
individuals involved in secreting his ill-gotten gains out of Iraq. In addition
to lucrative arms deals with major munitions makers (with kickbacks to the
manufacturers), Saddam utilized the petroleum trade to amass an enormous
fortune, which was transferred abroad. Much of the discussion centers on
Saddam’s use of the same networks employed by Al Qaeda to finance their
operations—the Al Taqwa complex in particular. The Saddam money machine touched
many bases—American and European—and many powerful institutions and individuals
have been compromised through their transactions with the Iraqi dictator. Some
have lost their lives as a result of their dealings with Hussein.
Program Highlights Include: The role of
Ahmed Idriss Nasreddin (an Al Taqwa founding director) in the Saddam financial
network; the role of Bank Al Taqwa in the Iraqi money constellation; SICO
director (and colleague of Nazi operative Francois Genoud) Baudoin Dunand and
his role in the Saddam financial constellation; review of Dunand’s connections
to the bin Laden milieu; review of the Clearstream network and its use by Al
Taqwa affiliate Banca del Gottardo; the Gottardo “Satan” account used by Saddam
lieutenant Al-Mahdi; American financier Marc Rich’s dealings with Saddam
through Iranian intermediaries; Saddam’s other American assistants; a partial
enumeration of major weapons deals with European munitions firms; the
suspicious death of Gianluca Boscaro—hired to investigate the Saddam money
machine; discussion of the failure of American investigative authorities to
adequately investigate (or even comprehend) the Saddam financial conduits and
repositories; the Italian “Clean Hands” investigation of Saddam’s machinations;
a partial chronicle of the names of Saddam’s subordinates involved with his
financial dealings. Note that this description features text of Lucy’s
answers that is derived from her article for UPI and is not a verbatim presentation
of her on-air recitation. Be sure to access her important article, available
at: http://www.insightmag.com/news/2004/05/28/World/Following.Saddam.Husseins.Secret.MoneyLaundering.Trail-684337.shtml
1.
D: In our previous interviews, we’ve
spoken about the Clearstream network. Review that network for us briefly. L: Reviews how “euro-dollars” led to the creation of the
Clearstream “Clearinghouse” and Ernest Backes’ role in that. She reviews how
the system of unpublished accounts grew up. (For more about this topic, see
FTR#458.)
2.
D: In your In These Times article “Explosive Revelation$”, you detailed how
Clearstream was used by the Al Taqwa network. L:
“Following the September 11 attacks on the World Trade Center and the Pentagon,
the United States started focusing its investigation on the financial trail of
Osama bin Laden and the al-Qaeda network. Like any other large, global
operation, international terrorists need to move large sums of money across
borders clandestinely. In November, U.S. authorities named some banks that had
bin Laden accounts, and it put them on a blacklist. One was Al Taqwa (‘Fear of
God’) registered in the Bahamas with offices in Lugano, Switzeland. Al Taqwa
had access to the Clearstream system through its correspondent account with the
Banca del Gottardo in Lugano, which has a published Clearstream account (No.
74381).”
3.
L: “Ahmed Huber, a Swiss director of
the bank who is a radical Islamist and Hitler admirer, acknowledged in 1995
that wealthy Saudi Arabians were large contributors to the Al Taqwa bank. The
just-revealed list of shareholders demonstrates further connections between
important individuals in moderate Middle Eastern countries and a financial
network allegedly vital to bin Laden. But bin Laden may have other access to
the unpublished system. In what he calls a ‘spectacular discovery,’ Ernest
Backes reports that in the weeks before CEO Andre Lussi ws forced to leave
Clearstream last may, a series of 16 unpublished accounts were opened under the
name of the Saudi Investment Company, or SICO, the Geneva holding company of
the Saudi Binladen Group, which is run by Osama’s brother, Yeslam Binladen (some
family members spell the name differently.)”
4.
L: “Yeslam Binladen insists that he
has nothing to do with his brother, but evidence suggests SICO is tied into
Osama’s financial network. SICO is associated with Dar Al-Maal-Al-Islami (DMI),
an Islamic financial institution also based in Geneva and presided over by
Prince Muhammed Al Saoud, a cousin of Saudi King Fahd, that directs millions a
year to fundamentalist movements. DMI holds a share of the Al Shamal Islamic
Bank of Sudan, which was set up in 1991 and partly financed by $50 million from
Osama bin Laden.”
5.
L: “Furthermore, one of SICO’s
administrators, Geneva attorney Baudoin Dunand, is a partner in a law firm,
Magnin Dunand & Partners, that set up the Swiss financial services company
SBA—a subsidiary of the SBA Bank in Paris, which is controlled by Mahfouz Salim
bin Mahfouz, part of the Mahfouz banking family.”
6.
D: Kroll Associates conducted an
investigation of Saddam’s financial operations that provided the foundation for
the information in your UPI article. Tell us about that. L: “A confidential December 2001 report by Kroll, the
international investigative agency, said that two Swiss companies, MEDP
Corporation SA in Lugano and Midco financial SA (in liquidation), were the
holding companies that handled the money Saddam skimmed. It said, ‘Whilst in
Geneva Barzan was believed to have participated in financial schemes that
included I the year 2000 the illegal sales of Iraqi petrol’ and the purchase of
weapons.”
7.
“The unpublished report,
authenticated by Kroll board chairman Jules Kroll, was commissioned by Kuwait
after the Gulf War in an attempt to locate Iraqi assets it could claim as
compensation. Jules Kroll explained, ‘In 1990 we were given the assignment and
paid by the government of Kuwait.’ He said the goals were to identify Iraq’s
procurement network and to find assets outside that would be used to fuel the
regime and buy weapons. The 2001 report was an update of the 1991 report.’”
8.
“Kroll investigators discovered that
one of the middlemen helping Saddam was Marc Rich, the U.S. tax-evader pardoned
by President Clinton. Rich had been indicted by the United States in 1983 on
charges he evaded more than $48 million in taxes and illegally bought oil from
Iran during the 1979 hostage crisis. He fled the United States and settled in
Switzerland. Kroll said, ‘We came up with evidence that through Marc Rich’s
Spanish subsidiary, he was using some Iranian cutouts—specifically [Shapour]
Bakhtiar, Iranians, whose family was close to Saddam—he was using them to
negotiate arrangements as it related to oil.’”
9.
“The work was all turned over to OFAC
(the Treasury Department’s Office of Foreign Assets Control),’ Kroll said. That
means the Clinton administration knew about Rich’s aid to Saddam. The Kroll
report also dealt with Nadhmi Auchi, reporting the Italian intelligence view
that he was a ‘high-level Iraqi defense procurement and intelligence agent.’
After Roger Watson [in 1987] became Saddam’s financial consultant, he also
became an adviser to Auchi’s International Company of Banking and Financial
Participations (CIPAF). The totals from skimmed oil revenues and contract
kickbacks from the late 1970’s through the oil-for-food 90’s have been
estimated by U.S. officials to reach $30 or $40 billion.”
10. “Jules Kroll said that until 9/11, a few staff members at
the Treasury’s Office of Foreign Assets Control ‘were the only ones spending
any energy on this issue in any organized way.’ He said, ‘The level of
ignorance at the CIA was total, at the FBI it was beyond total. The law
enforcement and intelligence community in the U.S. was behind the curve. It was
of little interest to them,’ he said.”
11. D: Describe for us some of the areas of overlap between the
Al Qaeda money networks and those used by Saddam to conduct his financial
transactions. L: “The key Iraqis in the
operation were Said Rahim Hussein Al-Mahdi and Madhmi Auchi. Al-Mahdi was sent
to Lugano because his father-in-law, Talaak el Naboulsi, an Egyptian soldier
and member of the Muslim Brotherhood, was then working in Geneva for Barzan.
(Barzan is now in U.S. custody.) Al-Mahdi set up his system of secret companies
and accounts with the assistance of the prominent asset managers (also known as
trustees or fiduciaries) Elio Boradori in Lugano in the southern, Italian-speaking
part of Switzerland, and Enrico Walser and Engelbert Schreiber, in Vaduz,
Lichtenstein. He would also use managers in Panama, and the Bahamas. The same
jurisdictions would be used to launder money in the oil-for-food sales in the
1990’s.”
12. “Al-Mahdi established MEDP (Mediterranean Enterprise for
Development and Projects), registered in Lugano, with subsidiaries—generally
just paper shells—in New York (MEDP USA at 900 Third Ave., New York,
incorporated in 1984), London, Paris, Milan, Vienna, Tokyo, Seoul, and Sao
Paolo. Its subsidiary in Baghdad was chaired by Nazir Auchi, Nadhmi’s brother.
These shells, in turn, had shares of other companies that carried out the money
laundering and arms purchases.”
13. “A father-and-son team in Liechtenstein, whose business is
setting up shell companies and secret bank accounts, worked to move the money
of both Saddam and al-Qaeda. Engelbert Schreiber and his son Englebert
Schreiber Jr. are listed as founder or board member of Mediterranean
Enterprises Development Projects; Tradex; Techno Service Intl.; Saidomin; and
Executive Flight Assistance, all Liechtenstein companies that handled arms
sales and payoffs for Saddam. They are also listed on corporate documents for
NASREDDIN International Group ltd. Holding (Liechtenstein). Ahmed Idriss
Nasreddin, on the U.S. terrorist blacklist, was a founder of Al Taqwa, the bank
that moved money for al-Qaeda and which was closed down by the United States
after 9/11. The Schreibers declined to respond to numerous requests for
comment.”
14. “One of the men linked in documents to several Panama shell
companies used in the Saddam laundering network was Baudoin Dunand, a Swiss
lawyer who is administrator of the Saudi Investment Company (SICO), the Geneva
investment affiliate of the bin Laden family conglomerate, run by Osama bin
Laden’s half-brother Yeslam Binladen. (They spell their names differently.) Mr.
Dunand declined to respond to repeated requests for comment.”
15. “The Banca del Gottardo in Lugano, Switzerland, moved
al-Qaeda money via the Al Taqwa bank, a shell bank that operated through
correspondent accounts at the Gottardo branch in Nassau. It also handled
payments for the Saddam money network. The bank’s spokesman wrote, ‘Please be
advised that we do not intend to make any comments or discuss any issues with
you regarding the article you proposed in your e-mail.’”
16. “Banque Paribas, headquartered in Paris, with a significant
portion of shares owned by Saddam’s cousin Nadhmi Auchi, moved money for the
Al-Mahdi, moved money for the Al-Mahdi network in the 1980’s and was the bank
chosen to handle the Iraqi oil-for-food payments. In fact, Iraq insisted that
Paribas handle the oil-for-food escrow account. A corporate document for al
Taqwa Trade, Property and Industry Co. Ltd. of Liechtenstein—an al-Qaeda
network shell company also shut down by the United States—lists Banque Paribas,
Lugano, where it had accounts. (Paribas in 2000 merged with another French bank
to create BNP Paribas, with Auchi continuing as one of the largest
shareholders.)”
17. D: The aforementioned Baudoin Dunand was involved with
setting up shell companies used by Saddam as well. Tell us about that. [Note
that Dunand was a friend of, and attorney for, Nazi banker Francois Genoud. See
FTR#456]. L: Lucy described this in item #14.
18. D: Banco del Gottardo moved Al-Qaeda money through Al Taqwa and did the same for Saddam. Describe that further for us if you would. L: “Al Taqwa has for years enjoyed protection in Switzerland, where it moves money through correspondent accounts in the politically influential Banca del Gottardo, also in Lugano. Gottardo president Claudio Generali is a local vice president of the ruling Liberal Radical Party and a former finance minister of Ticino. Gottardo has New York correspondent accounts in Citibank and the Bank of New York, which gave Al Taqwa entry into the U.S. Replying to numerous queries about Gottardo activities, spokesman Franco Rogantini sent an e-mail declining to answer queries, then or in the future. A 1983 document shows $1 million transferred from the Gottardo ‘Satan’ account to Hamid Al-Tikriti's account at the National Bank of Kuwait. The recipient—Abid hamid Mahmoud al-Tikriti—was Saddam’s presidential secretary and cousin, arrested by the United States in June 2003. In 1981, half a million dollars had been sent by Gottardo to Hamid al-Tikriti’s Kuwaiti bank account.”
19. D: Relate for us, if you would, the origins and evolution
of this network. L: “Saddam Hussein began
constructing his offshore operation in 1968 in Switzerland, aware that the
country’s bank secrecy made it a prime place to organize the movement of
illicit funds and the purchase of arms. That year, 11 years before his coup,
Saddam sent his half-brother Barzan Ibrahim Hasan Al-Tikriti to Geneva to
construct the network to launder secret commissions charged on sales of Iraqi
crude oil. The system would also be used for kickbacks on purchase from Western
arms dealers. Liechtenstein, which Swiss bankers and money-managers often use
to handle dubious clients, was used to ensure even more impenetrable secrecy:
real names of company and account owners would be hidden from law enforcers.
The key Iraqis in the operation were Said Rahim Hussein al-Mahdi and Ndhmi
Auchi. Al-Mahdi was sent to Lugano because his father-in-law, Talaak el
Naboulsi, an Egyptian soldier and member of the Muslim Brotherhood, was then
working in Geneva for Barzan. (Barzan is now in U.S. custody.)”
20. D: Would you describe some of the machinations of these
individuals? L: “Al-Mahdi established MEDP
(Mediterranean Enterprise for Development and Projects), registered in Lugano,
with subsidiaries—generally just paper shells—in New York (MEDP USA at 900
Third Ave., New York, incorporated in 1984), London, Paris, Milan, Vienna,
Tokyo, Seoul, and Sao Paolo. Its subsidiary in Baghdad ws chaired by Nazir
Auchi, Nadhmi’s brother. Thee shells in turn had shares of other companies that
carried out the money laundering and arms purchases.”
21. D: The network used by Saddam ranged around the world and
entailed transactions with many of the world’s principal arms manufacturers.
What were some of the companies with which the Saddam network transacted? L: “The offshore networks directed by the two men were
crucial intermediaries for such weapons merchants as Messerschmitt-Bulkow-Blohm
Helicopter and Military aircraft Group/MBB (Germany), Thyssen Industries
(Germany), Airbus (the consortium of French, German, Spanish and U.K.
companies), and Dassault (France), which used them to pay kickbacks and, after
international embargoes were established, to hide illegal sales. For example, a
1982 bank transfer from the Nassau branch of the Banca del Gottardo in Lugano
notes a credit to MEDP’s “Satan” account of 33,000,000 French francs (about $6
million) from Dassault International. On a trip to Paris in January 1985,
al-Mahdi signed a contract with Dassault International whereby the company was
instructed to send payments to an account at the Indosuez Bank branch in
Lugano.”
22. D: Tell us about the “Satan” account in Banca del Gottardo. L: She describes the founding of the account, described in
the answer to the previous question. [This account is described in considerable
detail in FTR#413.]
23. D: You write of a number of Americans involved in the
Saddam networks. Who were some of them? L:
[After discussing Marc Rich, described above, Lucy goes on to describe the
activities of other Americans.] “Al-Mahdi’s network used Panama shell companies
set up by Roger E. Watson, who had dual American-Panamanian citizenship. An
official Panama document dated 1985 lists Watson as vice-president of a company
called Radistal; the president was Giuseppe Poggioli, a Lugano financial
consultant who acknowledged in an e-mail that Al-Mahdi was his client. Watson
and Poggioli were also officers of another Panama shell company, Dumynta. Poggioli
said about Watson, ‘I think he was the Consul of Panama in Lugano, but I am not
100-percent sure. I have no more contact with him since 1986 or 1987.’”
24. D: What happened to Mr. Al-Mahdi? L: “In 1985, Al-Mahdi ws called back to Baghdad and
imprisoned by Saddam, who suspected he was skimming funds, and he was beheaded
in 1986. Then, there was a conflict over who would get the late Al-Mahdi’s
cash. More than a decade after his death, family members sought to recover
goods they claim were stolen by the Swiss partner, Poggioli. They hired a Swiss
lawyer, Gianluca Boscaro, who went to court in Milan, Vaduz and Lugano, backing
up their claims with documents from Saad Al-Mahdi’s files.”
25. “In August, 2000, attorney Diane Francois, representing
Al-Mahdi’s widow, wrote to Jean-Paul Gut, president of Aerospatiale Matra
Lagardere International in Paris, noting that Al-Mahdi ‘was one of the
consultants of your company for Iraq and in this capacity was remunerated
according to the sum of the sales concluded by your company with the Iraqi
state.’ In other words, this ‘consultant’ had been getting kickbacks. She
wrote, ‘it appears that from the end of 1984, your company stopping paying Mr.
Al-Mahdi the sums that were due him, and Madame Lina El Nabulsi estimates at
more than 44,865,000 French Francs [more than $8 million] the debt of your
company to Al-Mahdi’s heirs.’”
26. “In 2001, Gianluca Boscaro filed lawsuits in Milan, Vaduz
and Lugano on behalf of the family for $18 million damages against Poggioli and
one of his collaborators. Talaat Mohamed Sudki el Nabulsi, the father of
Al-Mahdi’s wife Lina el Nabulsi, had been involved in MEDP operations, so the
family could provide Boscaro with evidence that Poggioli and his colleague had
embezzled the MEDP companies and other assets. In August, 2002, Boscaro, 44, a
European hang-gliding champion, was killed in a suspicious accident in
qualifications for the world championship at Lake Orta, Italy. He was doing a
maneuver under the paraglider when suddenly he plummeted to the ground. Investigators
found that the cords had been damaged. According to journalist Paolo Fusi, who
obtained Boscaro’s files, the lawyer had discovered and plotted the
interrelationships between about thirty shell companies and fifty Iraqi
accounts in Switzerland.”
27. D: Who succeeded Al-Mahdi after his death? L: “After Al-Mahdi’s death,
Saddam divided control of the network between the directors of the subsidiary
companies of MEDP, Iraqi businessman Mahhal Sheikh Kadirin London and the
Lebanese Alfred Jawde in New York. Watson, who set up a residence in Como,
Italy, replaced Borradori in 1987 as Saddam’s financial consultant and managed
Panama shell companies for the network via his L.R. European Company. Poggioli
said that he, Poggioli, also left the operation. Kadir and Watson could not be
located, and Jawde declined to comment. Borradori was reached, but he is of
advanced age and has difficulty communicating.”
28. D: In your article, you provide a wealth of specific
documentation on the transactions conducted by many of these companies with the
Saddam network. Detail some of these if you would. L: “On Aug. 13, 1990 document signed by International
Aircraft Leasing Ltd. and Erfel Anstalt, both shell companies registered in
Liechtenstein, noted past ‘consulting agreements’ with Airbus Industries,
Blagnac, France, March 7, 1985, and with MBB, Munich, Feb. 19 and March 18,
1985; and a contract with Thyssen Industries AG, Essen, West Germany, Nov. 26,
1987. An Erfel record of that date sets out commissions from MBB and Thyssen
totaling SF 720,000 ($432,000).”
29. “The United Nations enacted comprehensive trade and
weapons embargoes against Iraq in 1990. However, a 1991 Erfel document notes a
$255,875—5 percent—commission from Airbus and a $45,247—5 percent—commission
from Thyssen. And a 1991 balance sheet for IAL cites a debt of 1,455,000 German
marks due to Thyssen Industies AG, Essen, with FF 3,812 earmarked for
Kensington Anstalt, an Al-Mahdi shell company. IAL prepared a chart that showed
that from 1986 to 1991, it collected ‘commissions’ of $1,238,813 (Canadian)
from MBB, $10,827,000 (U.S.) from Airbus, $3,900,000 (Canadian) from Thyssen,
and DM 1,466,000 from Thyssen. Thyssen and Airbus, which now includes MBB, were
sent the documents, but company officials declined to respond.”
30. D: In the early 1990’s, the Italian judiciary conducted
“Operation Clean Hands” aimed at rooting out the endemic corruption in the
Italian political system. This investigation wound up targeting Silvio
Berlusconi [now PM] and also uncovered some of the machinations of the Saddam
network. Tell us about that if you would. [Note that Berlusconi’s Italian
investments had been managed by Pier Felice Barchi, Nada’s attorney.] L: “According to official Italian documents, Auchi used
Panama to launder kickbacks for two contracts for the Iraqi military. An
Italian parliamentary report in 1987 said that one of them, Dowal, set up by
Watson, was used to collect $23 million in hidden commissions on Baghdad’s
purchase of warships manufactured by the Italian shipyard, Cantieri Navali
Riuniti. In another case, the Operation ‘Clean Hands’ (Mani Pulite)
investigation in Italy revealed in 1993 that Auchi received about $40 million
in hidden commissions to facilitate approval of a Franco-Italian engineering
project to construct a pipeline from Iraq to Saudi Arabia. Italian banker
Pierfrancesco Pacini Battaglia declared to investigators that he had received
instructions to transfer these commissions to accounts in Panama established in
the names of Iraqi officials.”
31. You had a great deal of difficulty getting your article
published. Are you in a position to describe some of your travails in detail?
Why do you think it was so difficult to get this article published? L: “The major US media turned it down. One major publisher
says it looks bad when they run outside investigations because readers wonder
why their own reporters didn’t get the story. Also, editors mostly don’t have a
clue about the importance of the offshore system. Some asked me if any of the
documents related to the near present! As if something doesn’t matter if it
didn’t happen yesterday. Real reason: astonishingly bad journalism.”