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Treasure Hunt
A U.S. government strike force has been charged with finding the millions?if not billions?Saddam Hussein has stashed around the globe
NEWSWEEK WEB EXCLUSIVE
March 19 ? As U.S. military forces gear up to destroy Saddam Hussein?s army, another U.S. government strike force is about to target something he may hold more dear: his money.
A TEAM of U.S. financial investigators first went after Saddam?s funds during the first Persian Gulf War 12 years ago. But much like Iraq?s purported stockpile of chemical and biological weapons, U.S. officials believe that hundreds of millions, if not billions, of assets controlled by Saddam, his son Uday and his closest cronies went undetected at the time and are now concealed around the globe in secret bank accounts and dummy companies.
As a result, NEWSWEEK has learned, U.S. agencies in the next few days are poised to unveil a new effort to trace the assets of Saddam and his inner circle using existing economic sanctions and new powers granted to the administration under the USA Patriot Act passed by Congress in the wake of the September 11 terror attacks.
One central focus of the financial task force, government sources say, will be millions of dollars in suspected kickbacks that Saddam and his high-living son Uday are believed to have extorted from foreign businessmen who did business with Iraq under a United Nations sanctioned Oil for Food program.
The program was authorized by the United Nations as a humanitarian gesture seven years ago, allowing Iraq to sell limited quantities of oil in order to purchase badly needed food and medicines for Iraqi citizens suffering from the impact of economic sanctions on Saddam?s regime.
But in fact, U.S. officials now believe that Saddam brazenly exploited the program for his own personal benefit and that of his family. One recent example: Russian businessman Gazi Lugev last year complained to the United Nations that Iraqi officials demanded that he wire $60,000 into a numbered bank account in Jordan in exchange for a contract to resell Iraqi oil under the Oil for Food program. (The deal was set up by Uday. Lugev was instructed to deposit the kickback into an account numbered 500 320/02 at the Queen Noor Street Branch of the Jordan National Bank in Amman.) When he raised questions about the demand, Lugev said he was told that any businessman who participated in the Oil for Food program had to make such deposits. ?It is our rule,? Lugev said he was told. Given the billions of dollars in oil deals that have taken place since the Oil for Food program began, U.S. investigators to believe that millions of dollars in kickbacks may still be sitting in the Jordanian account and others?and are ripe for seizure.
Government officials familiar with investigations into Saddam?s finances say that investigators are likely to try to trace the Iraqi dictator?s suspected cash hordes by reexamining leads that were not fully explored during or after the gulf war. Because investigations into the Saddam family fortune were dropped so quickly after that war, sources said, it is quite possible that suspicious financial entities that were known about then, but never acted against, are still in business. At the very least, officials say, they might offer clues to the identities of people who could still be managing some of the Saddam family?s money.
Following the gulf war, investigators thought they had traced some of Saddam?s money to the Swiss cantons of French-speaking Geneva and Italian-speaking Ticino. During the l980s, a prominent Iraqi businessman named Said al-Mahdi had set up a network of companies in Lugano, Switzerland. Al-Mahdi, who was widely suspected of acting at Saddam?s behest, in turn engaged in a series of convoluted deals with other companies in Italy and the notorious Alpine tax haven of Liechtenstein, where until recently local ?fiduciaries? (company-formation agents) could open companies for foreigners without having to tell authorities who the real owners were.
In the mid-1980s, al-Mahdi and two business associates were summoned to Baghdad and executed by Saddam. This created suspicions that they had been handling his money but had somehow crossed the Iraqi leader. Since then, lawyers, journalists and European intelligence officials have been hunting for a reputed stash of anywhere from $20 million to several billion dollars of Saddam?s money that al-Mahdi may have stashed away before his untimely demise. A lawyer close to the al-Mahdi family told NEWSWEEK that while it was possible al-Mahdi did at some point manage a multimillion-dollar business empire, the money was al-Mahdi?s rather than Saddam?s. The lawyer maintained that whatever money al-Mahdi had was ?thrown out the window? when al-Mahdi squandered it on losing investments.
Whether or not al-Mahdi hid billions of Saddam?s assets in southern Switzerland, U.S. intelligence sources say there is reason to believe that some of Saddam?s personal fortune remains under control of associates of the Saddam family still living in the Geneva area. At one point, Barzan al-Tikriti, Saddam?s brother, may have had control of substantial sums. Until a few years ago, he served as Iraq?s representative to Geneva-based United Nations agencies. Officials believe he used this posting as a cover to serve as a sort of financial manager for Saddam and his cronies, investing their personal funds in an assortment of well-hidden assets. Barzan was later called back to Baghdad when he and Saddam had a falling out. But some officials suspect that some of the money he left behind in Swiss investments is still there, perhaps untouched, perhaps more deeply hidden by other Saddam family associates.
Recent reports suggest that Saddam and his family members may have been trying to transfer some of their vast wealth into hard-to-trace commodities such as diamonds. The Sunday Times of London reported last week that Saddam had dispatched his personal jeweler to Thailand on a secret mission to buy millions of dollars worth of diamonds. A few months earlier, the paper reported the same jeweler was reported to have been sent to Thailand by Uday to purchase a $750,000 diamond ring. The alleged diamond purchases fueled speculation that Saddam and his family might be planning to flee Iraq?a theory that seems to have been convincingly shot down yesterday when the Iraqi leader rejected President Bush?s ultimatum to leave the country.
What will become of Saddam?s money if the United Stages succeeds in finding it? Officials have said they will use Iraq?s resources to rebuild the country after any military action, and presumably these resources would include the assets of Saddam and his family that can traced and seized. There will be other claimants to the money: At least two American law firms have filed lawsuits against Saddam, his regime and his close associates alleging Iraqi involvement in international terrorism in general and September 11 in particular. Legal sources say that the Iraqis may have already defaulted in at least one of the lawsuits, meaning U.S. lawyers and the 9-11 clients they represent may be able to claim portions of the money.
Treasure Hunt
A U.S. government strike force has been charged with finding the millions?if not billions?Saddam Hussein has stashed around the globe
NEWSWEEK WEB EXCLUSIVE
March 19 ? As U.S. military forces gear up to destroy Saddam Hussein?s army, another U.S. government strike force is about to target something he may hold more dear: his money.
A TEAM of U.S. financial investigators first went after Saddam?s funds during the first Persian Gulf War 12 years ago. But much like Iraq?s purported stockpile of chemical and biological weapons, U.S. officials believe that hundreds of millions, if not billions, of assets controlled by Saddam, his son Uday and his closest cronies went undetected at the time and are now concealed around the globe in secret bank accounts and dummy companies.
As a result, NEWSWEEK has learned, U.S. agencies in the next few days are poised to unveil a new effort to trace the assets of Saddam and his inner circle using existing economic sanctions and new powers granted to the administration under the USA Patriot Act passed by Congress in the wake of the September 11 terror attacks.
One central focus of the financial task force, government sources say, will be millions of dollars in suspected kickbacks that Saddam and his high-living son Uday are believed to have extorted from foreign businessmen who did business with Iraq under a United Nations sanctioned Oil for Food program.
The program was authorized by the United Nations as a humanitarian gesture seven years ago, allowing Iraq to sell limited quantities of oil in order to purchase badly needed food and medicines for Iraqi citizens suffering from the impact of economic sanctions on Saddam?s regime.
But in fact, U.S. officials now believe that Saddam brazenly exploited the program for his own personal benefit and that of his family. One recent example: Russian businessman Gazi Lugev last year complained to the United Nations that Iraqi officials demanded that he wire $60,000 into a numbered bank account in Jordan in exchange for a contract to resell Iraqi oil under the Oil for Food program. (The deal was set up by Uday. Lugev was instructed to deposit the kickback into an account numbered 500 320/02 at the Queen Noor Street Branch of the Jordan National Bank in Amman.) When he raised questions about the demand, Lugev said he was told that any businessman who participated in the Oil for Food program had to make such deposits. ?It is our rule,? Lugev said he was told. Given the billions of dollars in oil deals that have taken place since the Oil for Food program began, U.S. investigators to believe that millions of dollars in kickbacks may still be sitting in the Jordanian account and others?and are ripe for seizure.
Government officials familiar with investigations into Saddam?s finances say that investigators are likely to try to trace the Iraqi dictator?s suspected cash hordes by reexamining leads that were not fully explored during or after the gulf war. Because investigations into the Saddam family fortune were dropped so quickly after that war, sources said, it is quite possible that suspicious financial entities that were known about then, but never acted against, are still in business. At the very least, officials say, they might offer clues to the identities of people who could still be managing some of the Saddam family?s money.
Following the gulf war, investigators thought they had traced some of Saddam?s money to the Swiss cantons of French-speaking Geneva and Italian-speaking Ticino. During the l980s, a prominent Iraqi businessman named Said al-Mahdi had set up a network of companies in Lugano, Switzerland. Al-Mahdi, who was widely suspected of acting at Saddam?s behest, in turn engaged in a series of convoluted deals with other companies in Italy and the notorious Alpine tax haven of Liechtenstein, where until recently local ?fiduciaries? (company-formation agents) could open companies for foreigners without having to tell authorities who the real owners were.
In the mid-1980s, al-Mahdi and two business associates were summoned to Baghdad and executed by Saddam. This created suspicions that they had been handling his money but had somehow crossed the Iraqi leader. Since then, lawyers, journalists and European intelligence officials have been hunting for a reputed stash of anywhere from $20 million to several billion dollars of Saddam?s money that al-Mahdi may have stashed away before his untimely demise. A lawyer close to the al-Mahdi family told NEWSWEEK that while it was possible al-Mahdi did at some point manage a multimillion-dollar business empire, the money was al-Mahdi?s rather than Saddam?s. The lawyer maintained that whatever money al-Mahdi had was ?thrown out the window? when al-Mahdi squandered it on losing investments.
Whether or not al-Mahdi hid billions of Saddam?s assets in southern Switzerland, U.S. intelligence sources say there is reason to believe that some of Saddam?s personal fortune remains under control of associates of the Saddam family still living in the Geneva area. At one point, Barzan al-Tikriti, Saddam?s brother, may have had control of substantial sums. Until a few years ago, he served as Iraq?s representative to Geneva-based United Nations agencies. Officials believe he used this posting as a cover to serve as a sort of financial manager for Saddam and his cronies, investing their personal funds in an assortment of well-hidden assets. Barzan was later called back to Baghdad when he and Saddam had a falling out. But some officials suspect that some of the money he left behind in Swiss investments is still there, perhaps untouched, perhaps more deeply hidden by other Saddam family associates.
Recent reports suggest that Saddam and his family members may have been trying to transfer some of their vast wealth into hard-to-trace commodities such as diamonds. The Sunday Times of London reported last week that Saddam had dispatched his personal jeweler to Thailand on a secret mission to buy millions of dollars worth of diamonds. A few months earlier, the paper reported the same jeweler was reported to have been sent to Thailand by Uday to purchase a $750,000 diamond ring. The alleged diamond purchases fueled speculation that Saddam and his family might be planning to flee Iraq?a theory that seems to have been convincingly shot down yesterday when the Iraqi leader rejected President Bush?s ultimatum to leave the country.
What will become of Saddam?s money if the United Stages succeeds in finding it? Officials have said they will use Iraq?s resources to rebuild the country after any military action, and presumably these resources would include the assets of Saddam and his family that can traced and seized. There will be other claimants to the money: At least two American law firms have filed lawsuits against Saddam, his regime and his close associates alleging Iraqi involvement in international terrorism in general and September 11 in particular. Legal sources say that the Iraqis may have already defaulted in at least one of the lawsuits, meaning U.S. lawyers and the 9-11 clients they represent may be able to claim portions of the money.
