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KISSINGER ASSOCIATES, SCOWCROFT, EAGLEBURGER, STOGA, IRAQ, AND BNL
Henry B. Gonzalez, (TX-20)
(House of Representatives - April 28, 1992)


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The SPEAKER pro tempore. Under a previous order of the House, the gentleman from Texas [Mr. Gonzalez] is recognized for 60 minutes.

Mr. GONZALEZ. Mr. Speaker, today I will talk about Henry Kissinger, his consulting firm Kissinger Associates, two former Kissinger Associates directors, Lawrence Eagleburger and Brent Scowcroft, and the chief economist at Kissinger Associates, Alan Stoga.

I will explore their links to Banca Nazionale del Lavoro [BNL] and Iraq, and the Bush administration's handling of the BNL scandal. But first, I will provide some background information on the BNL scandal.

BACKGROUND ON BNL SCANDAL

BNL is one of the largest banks in Italy with assets over $100 billion. At the time the BNL scandal was disclosed in August 1989, BNL was 98 percent owned by the Italian Government. BNL has operations around the world including U.S. branches in Chicago, Los Angeles, Miami, Atlanta, and its U.S. headquarters in New York.

Several former employees of the Atlanta branch of BNL conspired to provide the Government of Iraq with over $4 billion in unreported loans between 1985 and 1990. They accomplished this massive fraud by keeping a secret set of accounting records that concealed the over $4 billion in loans to Iraq.

These secret books were presumably not furnished to BNL's management in Rome or to the bank regulatory agencies responsible for regulating BNL's operations in the United States. To date, several of the former employees have pleaded guilty to the conspiracy and signing false financial statements. The former manager of BNL, Chris Drogoul, goes to trial on June 2. He claims that the BNL management in Rome was aware of the loans to Iraq and the United States and Italian Governments should have been aware of the loans.

The $4 billion plus in BNL loans to Iraq between 1985 and 1990 were crucial to Iraqi efforts to feed its people and to build weapons of mass destruction. In addition, the BNL loans were crucial to Reagan and Bush administration efforts to assist Saddam Hussein.

The loans to Iraq were split just about evenly between agricultural and industrial loans. Iraq used a little over $2 billion to purchase agricultural products and to pay for the shipping charges associated with the delivery of those products. Well over $800 million of agriculture-related loans were guaranteed by the U.S. Department of Agriculture's [USDA's] Commodity Credit Corporation.

BNL was the largest participant in the Commodity Credit Corporation [CCC] program that Iraq used to purchase about $5 billion in United States agricultural commodities between 1983 and 1990. Had the USDA ever inspected the publicly available financial statements of BNL, they would have most likely uncovered the scandal years earlier.

The remaining $2 billion plus in BNL loans to Iraq went to Iraqi Government entities involved in running a secret Iraqi military technology procurement network. The procurement network, which operated through front companies situated in Europe and the United States, used the BNL loans to supply Iraqi missile, chemical, biological and nuclear weapons programs with industrial goods such as computer controlled machine tools, computers, scientific instruments, special alloy steel and aluminum, chemicals, and other industrial goods.

A number of the procurement network's imports from the United States were guaranteed by the Export-Import Bank. In fact, BNL was also a major participant in the Export-Import Bank program for Iraq. In total, the Eximbank program helped to finance the sale of over $300 million in industrial goods to various Iraqi Government entities.

It is truly amazing that the BNL scandal went on as long as it did. Various agencies within our Government knew of BNL's role in bankrolling Iraq--yet they supposedly did not know that the loans were unauthorized or not properly reported. How is this possible? The committee is still investigating the extent to which the U.S. Government had knowledge of the BNL scandal.

Several of BNL's high level friends in the United States should have been aware of the BNL loans to Iraq. The high level patrons that I am referring to are Henry Kissinger, and his Kissinger Associates compadres, Brent Scowcroft and Lawrence Eagleburger.

Several Kissinger Associates clients had extensive dealings with Iraq including Volvo, Midland Bank, Chase Manhattan Bank, Fiat, and Asea Braun Boveri and those same companies also were the beneficiaries of BNL loans to Iraq or were involved in some way with BNL-Atlanta.

Kissinger, Scowcroft, and Eagleburger maintain that they were unaware of the BNL loans to Iraq. I offer no definitive proof that they were aware of the BNL loans, but I will explore in more detail their interlocking relationships with BNL and Iraq.

In addition, I will reveal that both Mr. Eagleburger and Mr. Scowcroft played a key role in the Bush administration's handling of the BNL scandal, even though BNL was a paying client of Kissinger Associates just months prior to the BNL scandal becoming public.

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HENRY A. KISSINGER, BNL, AND IRAQ

Henry Kissinger is one of the best known and most powerful Presidential advisers of the post-World-War II era. He began his political career in 1956 as a consultant on military affairs. He has also advised many executive-branch organizations including the Joint Chiefs of Staff, the National Security Council, and the Department of State.

In 1969, he became President Nixon's National Security Adviser, and in 1973 Nixon named him Secretary of State. He held that post until 1977. In 1989, Mr. Kissinger was appointed as a member of the President's Foreign Intelligence Advisory Board [FIAB]. Members in this elite club are permitted access to highly classified information and members actually advise the President on intelligence issues.

Today, Mr. Kissinger is active as a foreign policy analyst and consultant through the firm that bears his name, Kissinger Associates, Inc. He founded the firm in 1982, and he has offices in New York and Washington. Kissinger Associates analyzes political risk and international economic trends to help clients make business decisions about operations in a foreign country.

KISSINGER DELIBERATELY MISLEADS PUBLIC

Until recently, Mr. Kissinger was a member of the BNL's international advisory board and during the height of the BNL-Atlanta scandal BNL was a paying client of Kissinger Associates.

While Henry Kissinger was a paid member of the BNL's advisory board for international policy between 1985 and June 1991, he received at least $10,000 for attending each meeting of the BNL advisory board. Mr. Kissinger met each year with the president of BNL when the latter visited the United States to attend the annual IMF conference in Washington, DC.

Other BNL advisory board members included David Rockefeller, the chairman of the Rockefeller Group and a director of Chase Manhattan Bank, Pierre Trudeau, the former Prime Minister of Canada, Lord Thornycroft, the former British Minister of Defense, and other politically well-connected international notables.

After my April 25, 1991, floor statement on Mr. Kissinger, he told the Financial Times newspaper that he had resigned from the BNL advisory board a week before the BNL indictment in February 1991 because `he did not want to answer questions about such incidents.'

Two weeks ago, the prominent TV show, `60 Minutes,' revealed that Kissinger had not resigned from the BNL advisory board in February 1991, as he had told the Financial Times. In fact, `60 Minutes' reported that Mr. Kissinger served on BNL's advisory board until his contract expired in the summer of 1991, more than 4 months after the date he had previously reported.

Mr. Kissinger was not the only Kissinger Associates employee that dealt with BNL. Mr. Brent Scowcroft, the vice chairman and Mr. Lawrence Eagleburger, the president of Kissinger Associates also had relationships with BNL.

IMPORTANCE OF THE BNL SCANDAL

Before detailing the relationship between BNL and Mr. Scowcroft and Mr. Eagleburger and the role they played in the handling of the BNL scandal, I will provide some background in order to put their actions into perspective.

As I have show in previous floor statements, the BNL scandal was closely linked to the decline of the United States-Iraq relations. I have introduced numerous documents showing that the CCC program for Iraq was the cornerstone of United States-Iraq relations. In turn, BNL was the largest participant in the CCC program for Iraq.

When the BNL criminal investigation in Atlanta uncovered significant fraud and abuse in the CCC program for Iraq, it jeopardized the continuation of the CCC program and the cornerstone of United States-Iraq relations began to crack. The BNL investigation also revealed that high-level Iraqi Government officials were involved in the scandal, including the second most powerful man in Iraq, Saddam Hussein's son-in-law, Hussain Kamil.

To show the link between the BNL scandal and the CCC program, consider an October 13, 1989, State Department memo that states:

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The unfolding BNL scandal is directly involved with the Iraqi CCC program and cannot be separated from it.

To illustrate of the serious problems uncovered by the BNL investigation and the scandal's potential influence on the CCC program for Iraq is contained in an October 1989 State Department memo which states:

There are currently 10 separate investigations of BNL Atlanta branch activity to Iraq. It now appears that at a minimum, elements of the Government of Iraq knew of the illegal dealings of the BNL, but found it convenient to continue using its good offices. Indications are that in addition to violating U.S. banking laws, the BNL's activities with Iraq may have led to diversion of CCC guaranteed funds from commodity programs into military sales. * * * The U.S. Department of Agriculture expectations are that the investigation could blow the roof off the CCC. If smoke indicates fire, we may be facing a four alarm blaze in the near future. * * * there were 19 investigations of CCC this year (1989) and the integrity of the program is now in question.

The importance of the BNL scandal was not lost on Mr. Scowcroft or Mr. Eagleburger. I will now provide some details on their roles in handling the BNL scandal.

BRENT SCOWCROFT, BNL, AND IRAQ

One of the most prominent of the Kissinger Associates alumni is Brent Scowcroft, President Bush's current National Security Adviser and head of the NSC staff. Early in his military career,

Scowcroft served 1 year as the air attache at the United States Embassy in Belgrade, Yugoslavia. In total, Mr. Scowcroft has held various positions in six administrations.

After earning a Ph.D. and working in academia from 1962 to 1968, he held a succession of national security posts in the Department of Defense. In 1971, President Nixon appointed Scowcroft military aide to the President, and in 1973 Kissinger chose him to be Deputy Assistant to the President for National Security Affairs.

Scowcroft often took charge of the National Security Council while Kissinger was fulfilling his duties as Secretary of State, and in 1975 he succeeded Kissinger as National Security Adviser to President Ford. Although he resigned the position during the Carter administration, Scowcroft stayed active as a member of the President's general advisory committee on arms control.

In 1982, Scowcroft joined Kissinger in setting up Kissinger Associates. Scowcroft served as vice chairman and head of Kissinger Associate's Washington, DC, office until becoming the head of the National Security Council under President Bush in January 1989.

WHITE HOUSE AND SCOWCROFT-LED NSC ROLE IN BNL HANDLING

I will not show that President Bush's top advisers at the White House were directly involved in the handling of the BNL scandal. They intervened in late 1989 to make sure that Iraq received a $1 billion allocation of CCC credits for fiscal year 1990 despite the findings of the BNL investigators in Atlanta.

The former Deputy Assistant to the President, and Director of Cabinet Affairs, Mr. Steve Danzansky was one of President Bush's staff assigned responsibility for overseeing the late 1989 decision to provide Iraq with $1 billion in CCC credits. Mr. Danzansky received regular updates on the BNL scandal as well as progress reports on the USDA's efforts to win approval for the CCC program for Iraq.

An October 30, 1989, USDA memo on the CCC program and the BNL scandal that was sent to Mr. Danzansky states:

`Please let me know if you * * * have any questions on this, or if I can provide further information on the situation with Banca Nazionale del Lavoro.'

But Mr. Danzansky's role went beyond monitoring the BNL scandal and the decision to grant Iraq additional CCC credits. A November 7, 1989, USDA General Counsel memo to Mr. Danzansky regarding the decision to grant the $1 billion CCC program for Iraq states:

Steve, attached are possible materials for circulation by Treasury for tomorrow's NAC meeting. Thanks for your help on all this and please let me know if there are any additional materials I should prepare.

That comment shows that the USDA staff was taking orders from Mr. Danzansky and that Mr. Danzansky was assisting the USDA in winning approval for the fiscal year 1990 CCC program for Iraq. In addition, Mr. Danzansky personally attended the November 1989 NAC meeting that made the decision on the CCC program.

Several Administration officials have told the Banking Committee that this was the first time that a White House official sat in on a NAC decision to grant credits to a foreign country. That meeting also marked the first time in the history that the minutes of a NAC meeting were classified so as to restrict access to the public, and the Congress.

There are other CCC/BNL-related documents with Mr. Danzansky's name on them--but to truly understand their importance one must consider Mr. Danzansky's position. Mr. Danzansky was the Director of Cabinet Affairs--in other words he had direct access to the President and the various Cabinet members involved in making decisions on the CCC program for Iraq and on the handling of the BNL scandal.

Given Mr. Danzansky's role in the CCC decision and his job as adviser to President Bush and Director of Cabinet Affairs, it is clear that President Bush was directly involved in the decision to provide Iraq with a $1 billion in CCC credits just months before the invasion of Kuwait.

MR. SCOWCROFT, BNL, AND THE CCC

While at Kissinger Associates, Mr. Scowcroft worked on the BNL account and met on numerous occasions with the BNL management. On three occasions between 1986 and 1989, Mr. Scowcroft briefed the BNL board on international political and economic developments. In addition, when the President of BNL traveled to the United States to attend the annual IMF conference, he met with Kissinger and Scowcroft in New York.

Just months after resigning from Kissinger Associates to join the Bush administration, Mr. Scowcroft was heavily involved in the handling of the BNL scandal including winning approval of the $1 billion CCC program for Iraq in late 1989. Mr. Scowcroft was also directly involved in trying to win the release of the second $500 million CCC installment for Iraq in March 1990.

NSC STAFF HEAVILY INVOLVED IN CCC DECISION

Under Mr. Scowcroft's direction, the NSC staff was heavily involved in winning approval of the $1 billion CCC program for Iraq in late 1989 despite the implications of the BNL scandal. The NSC staff received regular briefings and memorandums from the USDA regarding the decision to grant Iraq additional credits.

The NSC was also directly involved in the decision to grant the CCC credits to Iraq. On April 2, 1990, USDA memo states:

During the fall of 1989, there was intense debate among the agencies regarding approval of Iraq's request for an FY 1990 CCC allocation of $1 billion. The State Department and National Security Council supported a decision favorable to Iraq.

The NSC did not limit its activities to supporting the 1989 decision to grant credit to Iraq. The NSC was also directly involved in the USDA investigation of the BNL scandal.

NSC AND USDA STUDY OF BNL

In a highly unusual maneuver, the NSC had responsibility for reviewing and approving the release of the USDA administrative review of the BNL scandal and CCC program for Iraq in May 1990. The NSC staff even went as far as approving the date of the release of the USDA study.

Regarding the release of the USDA study in May 1990, Ms. Sandra Charles, the Director for Near East and South Asian Affairs at the NSC, sent a fax to the USDA's Richard Crowder, the man technically responsible for the CCC program for Iraq. Ms. Charles' handwritten notes on the memo state: `Dick, with this press release the NSC has no objection to your releasing the report. Suggest you coordinate with State [Department].'

The NSC's role in the USDA administrative review raises serious questions because the USDA review was an almost complete whitewash of the problems found during the BNL investigation. First, the scope of the USDA administrative review was severely restricted in order to downplay the importance of the BNL scandal and problems in the CCC program for Iraq.

For example, the press release and executive summary accompanying the report give the impression that the USDA conducted an exhaustive review of the CCC program for Iraq. In fact, the vast majority of the USDA study is based on a review of the records of a single firm involved in the BNL scandal.

The most glaring example of the whitewash is related to the issue of whether or not CCC-guaranteed agricultural commodities destined for Iraq were diverted to pay for weapons. The conclusion in the USDA report is not even supported by the facts as listed in the report. The summary of the USDA report states:

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The USDA administrative review uncovered no evidence to suggest that there has been diversion of commodities sold to Iraq. It appears, based on a review of sample records, that Iraq maintains records to establish proof of arrival for its CCC purchases.

In fact, a closer look at the USDA report shows that USDA investigators did not obtain records to verify that United States commodities had actually arrived in Iraq. Compare the findings of the report to an October 13, 1989, USDA memo which states.

Although additional research needs to be done, it appears more and more likely that CCC guaranteed funds and or commodities may have been diverted from Iraq to third parties in exchange for military hardware. Where documents indicate shipments arrived in Baghdad, the timing appears improbable, shipments arrived in Baghdad prior to arriving at interim ports. McElvain and the USDA IG are concerned that commodities were bartered in Jordan and Turkey for military hardware.

Ultimately, the USDA investigators, who had numerous contacts with the NS, took the word of the Iraqi Government that the CCC-guaranteed commodities had arrived in Iraq. In effect, the USDA report is very misleading as to the issue of whether or not CCC-guaranteed commodities were diverted--they certainly found no concrete evidence to indicate the goods actually arrived in Iraq.

Could it be that the NSC's involvement in the USDA study of BNL was meant to cover up an awareness that CCC-guaranteed commodities were being diverted to pay for Iraq weapons purchases? After all, the USDA study was deceiving as to the issue of diversion. We know that the administration conducted covert operations to assist Iraq. We also know that various memos indicate that diversion was a real possibility. And finally, the Iran-Contra affair provided proof positive that the NSC thought of itself as above the law.

Taken together, these factors raise serious questions about why the NSC was involved in the BNL investigation and whether or not they were aware of the diversion of U.S. commodities. These questions take on special importance in light of NSC Director Scowcroft's long affiliations with BNL.

SCOWCROFT GETS IN THE ACT

Not only was the NSC staff involved in the BNL/CCC investigation under Mr. Scowcroft's direction, Mr. Scowcroft himself pushed for the release of the second $500 million installment of CCC credits for Iraq that were delayed because of the BNL scandal.

A March 5, 1990, State Department memo related to the release of the second $500 million CCC installment for Iraq states: `National Security Council staff [NSCS] contacted the USDA March 2 to inquire about the delay after the Iraqi Ambassador complained to General Scowcroft.'

NSC AND WHITE HOUSE INVOLVED IN THWARTING INVESTIGATION OF IRAQIS?

I revealed in a March 30 floor statement that the United States attorney in Atlanta wanted to investigate the various Iraqis involved in the BNL scandal. I also revealed that the United States attorney was never allowed to interview the Iraqis because of the potential negative effect such an investigation could have on United States-Iraq relations.

Instead, the State Department decided that the United States attorney in Atlanta would have to write letters to the various Iraqis involved in the BNL fraud and ask them written question about their criminal activities. The committee has documents showing that the NSC and White House both received memos related to the pen-pal investigative strategy and the committee is continuing to probe their role in developing that strategy.

Mr. Scowcroft was not the only Kissinger Associates client involved in handling the BNL scandal--the Deputy Secretary of State, Lawrence Eagleburger, also played a key role.

EAGLEBURGER, BNL, AND IRAQ

Lawrence Eagleburger, Deputy Secretary of State, has held many positions of international influence in both the public and private sectors. Eagleburger started his political career in 1957 as a Foreign Service officer. In this capacity, he represented the United States in Honduras for 2 years, and in Yugoslavia for 4 years.

When, in 1969, Henry Kissinger became Nixon's national security adviser, Mr. Eagleburger served as his executive assistant. After working as a political adviser to NATO in Belgium, and as Deputy Assistant Secretary in the Department of Defense, Eagleburger rejoined Kissinger at the State Department, again as his executive assistant in 1973.

Eagleburger was appointed Ambassador to Yugoslavia during the Carter administration and served in that capacity from 1977 to 1981. Under President Reagan, Eagleburger became Assistant Secretary of State for European Affairs, and held this position from 1981 to 1982. Subsequently, he served for 2 years as Deputy Undersecretary for Political Affairs.

Before assuming his current position as Deputy Secretary of State in 1989, Mr. Eagleburger, like Mr. Scowcroft, worked for Kissenger Associates, Inc. In fact, during this tenure, Mr. Eagleburger was the president of Kissinger Associates.

BNL was a client of Kissinger Associates during Mr. Eagleburger's tenure. Mr. Kissinger has stated that Mr. Eagleburger did not handle the BNL account at Kissinger Associates. Renato Guadagnini, the former head of BNL's operations in the United States told committee investigators recently that Mr. Eagleburger was at a meeting between the BNL managers and Kissinger Associates in New York in 1987 or 1988.

While at the State Department, Mr. Eagleburger was fully aware of the link between BNL and the CCC program for Iraq and the importance of the BNL scandal. A State Department memo dated October 13, 1989, states: `The unfolding BNL scandal is directly involved with the Iraqi CCC program and cannot be separated from it.'

Mr. Eagleburger's role in promoting United States-Iraq relations spans both his commissions at the State Department. During the early 1980's Mr. Eagleburger wrote letters promoting the use of the CCC and Eximbank as tools to provide United States financial assistance to Iraq. Starting in 1989 Deputy Secretary of State Eagleburger played a key role in winning approval of the $1 billion CCC program for Iraq just months prior to the Iraqi invasion of Kuwait.

WINNING APPROVAL OF THE CCC PROGRAM FOR IRAQ

In order to win approval of the $1 billion CCC program for Iraq for fiscal year 1990, Secretary Baker wrote a letter to the Secretary of Agriculture, Clayton Yeutter, and then called him personally to express his conviction that Iraq should be given the benefit of the doubt and granted the full $1 billion CCC program for fiscal year 1990. The talking points for Mr. Baker's call to Mr. Yeutter state:

On foreign policy grounds, we support a program of up to $1 billion, released in tranches, with periodic compliance reviews. With safeguards, I hope we can get this important program back on track quickly.

Convincing the Department of Agriculture to support the allocation of the full $1 billion to Iraq was the least of the State Department's worries. The largest barrier was convincing the OMB and Treasury Department to drop their opposition to the $1 billion program for Iraq. This assignment was left to Deputy Secretary of State, Lawrence Eagleburger.

The Treasury Department and OMB were opposed to the fiscal year 1990 CCC program for Iraq because of Iraq's precarious financial condition and the BNL scandal. The Treasury Department actually voted against the fiscal year 1989 program for Iraq because of creditworthiness concerns, but this did not stop Mr. Eagleburger.

Mr. Eagleburger sent letters to the highest levels of the OMB and Treasury to win approval for the fiscal year 1990 CCC program. The first was a letter dated November 8, 1990, from Mr. Eagleburger to the Deputy Treasury Secretary, John Robson, which states:

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Further to our discussion, on foreign policy grounds we support the Department of Agriculture's proposal for a full billion-dollar program of CCC export credit guarantees in FY 1990 with adequate safeguards, for Iraq. * * * the CCC program is important to our efforts to improve and expand our relations with Iraq, as ordered by the President in NSC-26. With regard to the real concerns which arise from the investigation into the operations of the Atlanta branch of the Banca Nazionale del Lavoro, we have received from the Government of Iraq a pledge of cooperation.

He sent a similar letter to the OMB. Mr. Eagleburger's efforts were crucial to neutralizing OMB and Treasury opposition to the CCC program. After much lobbying and back scratching, in November 1989 the CCC program for Iraq was approved, but Mr. Eagleburger's involvement with the CCC program for Iraq and the BNL scandal did not stop.

The committee has documents showing that Mr. Eagleburger was involved in other aspects of the BNL scandal. For instance, Mr. Eagleburger provided the United States Embassy in Rome with guidance on how to handle press calls related to the BNL scandal. He also received two cables from the United States Embassy in Italy that contained interesting revelations.

The first indicated that top BNL managers approached the U.S. Ambassador to ask for damage control related to the handling of the BNL scandal in the United States. The second involved a meeting at the U.S. Embassy at which a BNL official voiced his displeasure at rumors that the Justice Department was about to indict BNL.

As a sidenote related to the Italians' request for damage control, I would like to say that United States law enforcement officials did not conduct a serious investigation of the role BNL's Rome management played in the over $4 billion in loans to Iraq. I wonder if BNL's friends in the Bush administration had a role in the decision to exonerate BNL's management in Rome?

The most notorious Eagleburger involvement in the BNL prosecution was related to the investigation by the United States attorney in Atlanta of Iraqis involved in the BNL scandal. As I stated above and in previous floor statements sometime between the BNL raid in August 1989 and early 1990, it was decided that the Atlanta investigators would not be permitted to interview the Iraqis involved in the BNL scandal.

Instead, it was decided that the Atlanta investigators would be permitted to submit written questions to the State Department which in turn would send the questions to Iraq. This pen pal approach to the criminal investigation effectively thwarted the investigation of the Iraqis responsible for the BNL scandal and was used as an excuse to delay the rest of the BNL indictment until it was more politically correct to reveal Iraqi involvement in the scandal.

To show the State Department involvement in the BNL case, consider a March 20, 1992, New York Times article containing excerpts of an interview with Robert L. Barr, the former U.S. attorney in Atlanta who was in charge of the BNL case until April 1990. Mr. Barr acknowledged that in the BNL case considerations of foreign policy had become intertwined with those of law enforcement and that the State Department was involved in thwarting the BNL investigation. The Times quoted Mr. Barr as saying: `The State Department had become involved early on and that the case became complex both legally and because of foreign policy concerns.'

To illustrate Mr. Eagleburger's role in the State Department's involvement in the pen-pal investigation of the Iraqis involved in the BNL scandal, consider a February 9, 1990, cable from Mr. Eagleburger to April Glaspie in Baghdad. The cable provides a status report on the BNL investigation and the CCC program from Iraq. In the cable, Mr. Eagleburger refers to State Department's role in handling the questions for the Iraqis involved in the BNL scandal. Mr. Eagleburger states:

* * * Legal has received a memorandum from the USDA General Counsel recommending a demarche to the Iraqis to request assurances that they will assist in the BNL investigation. If the Department of Justice (DOJ) or the Atlanta prosecutor have any specific questions they want to put to the Iraqis, we (the State Department) should convey these * * *.

Apparently Mr. Eagleburger did not want the USDA or others back in Washington to get wind of the State Department's strategy. Later in that same memo to Ambassador Glaspie, Mr. Eagleburger states:

We have no problem with your sharing the above with the USDA attache at your discretion, but please ask that he be careful not to play it back to his colleagues here (in Washington, D.C.).

Mr. Eagleburger played a key role in winning approval of the CCC credits for Iraq and in the State Department's handling of the BNL case. Mr. Eagleburger did not recuse himself from the State Department handling of the scandal.

ALAN STOGA--KISSINGER ASSOCIATES

Another link between Kissinger Associates, BNL and Iraq is Alan Stoga. Alan Stoga is a former economist at First Chicago Bank and is currently a director of Kissinger Associates. Mr. Stoga is said to be an expert in country risk analysis and international finance. He has been interested in the Middle East for many years and has made extensive visits to the area.

Mr. Stoga worked as the chief economist of the international division at First Chicago Bank. The chairman of the First Chicago at that time was A. Robert Abboud, the chairman of the United States-Iraq Business forum and director of First City Bank, Houston, TX.

The former head of BNL's U.S. operations stated that he attended a 1987 meeting in New York with Mr. Stoga, the head of BNL's Rome headquarters, and Mr. Kissinger, Mr. Scowcroft, Mr. Eagleburger in 1987. The meeting was held to give BNL advice on doing business in several countries including India. Mr. Stoga and Mr. Scowcroft brought the BNL officers to lunch after the meeting.

Mr. Stoga was also a friend to the United States-Iraq Business Forum. He is a friend of Mr. Robert Abboud, the former chairman of the Business Forum. On November 14, 1989 Mr. Stoga was a panelist at a Business Forum function titled, `Third Annual Symposium on U.S. Commercial Economic and Strategic Interests in Iraq. Mr. Stoga gave advice on the economic aspects of financing trade and investment with Iraq.

Just months before that meeting, in June 1989, Mr. Stoga visited Iraq with Mr. Abboud and other members of the United States-Iraq Business Forum. The Forum members met with Saddam Hussein to discuss expanding commercial relations between the United States and Iraq.

Committee investigators interviewed Mr. Stoga about his role during the June 1989 trip to Iraq. Mr. Stoga stated that he went along on the trip to get to know the country better since he had never before been to Iraq. He stated that he did not go on the trip to discuss Iraq's debt problems.

To the contrary. In a `60 Minutes' interview that aired 2 weeks ago, the president of the United States-Iraq Business Forum, Marshal Wiley, stated that Mr. Stoga was in Iraq to advise Saddam Hussein on Iraq's debt problems and the feasibility of restructuring Iraq's debts. Mr. Stoga may also have misled the public about Kissinger Associates relationship with the BCCI organization.

BCCI AFFILIATE A CLIENT OF KISSINGER ASSOCIATES

BCCI was notorious for recruiting well connected former high-level government officials around the world in order to influence government policy and to gain protection from the law. They also tried to hire Kissinger Associates in the fall of 1989, when Mr. Stoga and BCCI's representatives met several times to discuss BCCI becoming a client of Kissinger Associates.

The day after BCCI-Tampa was indicted for money laundering in October, 1988, a high-level BCCI official wrote a letter to the president of BCCI which stated:

I received a call today from Mr. Stoga, who informed me that Dr. Kissinger recommends that a public relations offensive be made by us * * * Kissinger Associates Inc. have indicated that they shall be happy to use their personal contacts with the firm and make the necessary recommendations.

In newspaper reports Mr. Stoga denied ever saying that Mr. Kissinger ever recommended a public relations offensive. He also stated that `Henry never met or talked with them [BCCI].' BCCI itself may not have become a client of Kissinger Associates, but it appears that BCCI's secretly owned affiliate, the National Bank of Georgia, which was purportedly owned by Saudi front man Ghaith Pharoan, was a client of Kissinger Associates.

In a New York Times interview Mr. Stoga is quoted as stating: `We were never employed by them (BCCI) and we are not in a habit of giving free advice.'

The committee has obtained documents showing that the former president of the National Bank of Georgia, Mr. Roy Carlson, received a briefing from Mr. Kissinger. Mr. Carlson's expense report from July 1986 states, `Briefing Session Dr. Henry Kissinger.'

As Mr. Stoga stated, Kissinger Associates does not give free advice. The National Bank of Georgia therefore must have been a client of Kissinger Associates. After all, Mr. Kissinger knew Ghaith Pharoan's father, an adviser to Saudi royal family, and he knew Ghaith Pharoan for many years.

This raises the question of whether or not Mr. Eagleburger or Mr. Scowcroft worked on the National Bank of Georgia account while they were at Kissinger Associates and whether or not they played any role in the postindictment prosecution of BCCI when they were back in the Government.

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CONCLUSION

BNL was a client of Mr. Scowcroft's while he was the vice-chairman of Kissinger Associates. Mr. Scowcroft regularly provided advice to BNL's management and received hefty fees in return.

Mr. Scowcroft and his staff at the National Security Council, along with the State Department, masterminded the Bush administration's handling of the BNL scandal in order to mitigate the damage it would have caused to United States-Iraq relations. In the process they trampled on United States law enforcement efforts and repeatedly misled the Congress and the American public about the United States policy toward Iraq.

BNL was not Mr. Eagleburger's client at Kissinger Associates although he did meet with BNL's management for at least one briefing. But I did show in an April 25, 1991 and February 24, 1992 floor statements that several of Mr. Eagleburger's Yugoslavian-related business ventures, the LBS Bank and the Yugo automobile, relied on BNL-Atlanta financing. Despite these ties Mr. Eagleburger did not recuse himself from the handling of the BNL case.

These revelations are not surprising--Mr. Scowcroft and Mr. Eagleburger refused to recuse themselves from the handling of the BNL scandal even though BNL was a client of Kissinger Associates just months earlier. Their actions provide a revealing example of the ethical atmosphere at the White House and the top levels of the State Department.

As for Mr. Kissinger, he misled the public about his relationship with BNL and about his firm's contact with Saddam Hussein. Mr. Stoga misled the Banking Committee about the reasons for his trip to Iraq in the summer of 1989 when he met with Saddam Hussein to discuss Iraq's debt problems.

Their ethical behavior is just as deplorable as Mr. Scowcroft's and Mr. Eagleburger's. Is anyone really surprised?

Ministers have come under obligations to great interests; and it can be presumed or alleged that their votes or speeches have been corrupt: W. Churchill.

Articles referred to follow:
DEPARTMENT OF AGRICULTURE,

Office of the General Counsel,
Washington, DC, October 30, 1989.

Hon. Stephen I. Danzansky,
Deputy Assistant to the President and Director, Office of Cabinet Affairs,
The White House, Washington, DC.

Dear Steve: Attached is a paper prepared by the Foreign Agricultural Service regarding the GSM credit guarantee program. The paper describes the process by which country credits and individual transaction guarantees are approved. It also discusses the situation with respect to the Iraqi credit.

As you know, Undersecretary Crowder is eager to resolve the new credit to be offered to Iraq quickly. Please let me know if you (or any other members of the group you assembled last week) have any questions on this, or if I can provide further information on the situation with the Banca Nazionale del Lavoro.

Best regards.

Sincerely,
Alan Charles Raul.

USDA Position on Iraq

1. BALANCING RISKS

USDA is currently evaluating its GSM-102/103 Export Credit Guarantee Programs for IRAQ for FY 1990. This evaluation involves prudent balancing of political and financial risks against marketing opportunities and benefits.

On the one hand, Iraq represents a very carefully nurtured $1 billion market for U.S. agricultural exports. Failure to reach an agreement with Iraq on a GSM program for FY 1990 risks loss of that market and a number of potential spillover effects: alienation of key sectors of U.S. agriculture who have been participating in this GSM market; negative impact on the U.S. trade balance; economic hardship in several agricultural sectors; and impairment of the carefully measured political rapprochement which the United States has been developing with one of the richest and most influential Arab States.

On the other hand, Iraq's general creditworthiness appears to have deteriorated somewhat in the past several years. Although Iraq has continued to pay its U.S. debt, it has not met its payments to some other creditor nations. In addition, Iraq has recently come under scrutiny for possible involvement in the Banco Nazionale del Lavoro (BNL) affair in Atlanta, where there has apparently been a major case of bank fraud centering on unauthorized loans to Iraq by the Atlanta branch of BNL, estimated at $1.7 billion. while the BNL investigation is in its early stages, there have been suggestions of possible impropriety with respect to BNL's GSM loan portfolio, which is approximately $750 million.

Investigators from the Office of the Inspector General have been detailed to work with the United States Attorney in the BNL investigation. In the course of its recent negotiations with Iraq, USDA learned that there were numerous allegations of possible wrongdoing, potentially involving Iraq. Attorneys from the Office of General Counsel were sent to Atlanta to discuss the matter with the assistant U.S. Attorney in charge of the case, to meet with the OIG personnel involved in the investigation, and to review available bank records. Those attorneys report that, as of the current stage of the investigation, no hard evidence has yet been uncovered which indicates misuse of the GSM program or wrongdoing by Iraq. At this stage, the allegations of impropriety appear to derive from theories of possible misuse hypothesized because of evidence of apparent wrongdoing uncovered in non-CCC loan transactions. At this juncture, however, the evidence developed in the case appears to center largely on bank fraud, although the investigation is still at an early stage.

Under the circumstances, a prudent and measured approach must be developed. At the current time, there has been no evidence developed to support allegations that Iraq has engaged in misuse of GSM programs, and so clearly discontinuation of the Iraq program would not be warranted. At the same time, when serious allegations are being made in the BNL investigation, a `business as usual' approach seems unwise. USDA believes that the prudent approach is to offer a measured program, announcing a large enough credit line to permit Iraq to continue purchases over the near term, while making every effort to assure that there have indeed been no program abuses. Associated with this, USDA will accelerate its own efforts to ensure future program integrity through improved management and regulation, including the development of a system of program compliance review.

--

DEPARTMENT OF AGRICULTURE,

Office of the General Counsel,
Washington, DC, October 31, 1989.
Facsimile Transmission for: Stephen I. Danzansky, Deputy Assistant to the President and Director, Office of Cabinet Affairs.
From: Alan Charles Raul, General Counsel.

Dear Steve: Attached is a press release issued by the Iraqi Embassy in Washington in which it indicates that `Iraq firmly abides by these agreements [with Banca Nazionale del Lavoro providing letters of credit guarantees for the companies having contracts with Iraqi establishments] and is desirous to honor its part of these agreements in accordance with international laws and conventions.'

I thought you should be aware of this Iraqi assurance in connection with your review of the matter. Please call me if you have any questions.

Statement Issued by the Iraqi Embassy in Washington, D.C.

Having heard the inaccuracies appeared in some news reports on irregularities concerning Letters of Credit issued for Iraqi firms by Banca Nazionale del Lavoro (BNL)--Atlanta Branch, the Embassy of Iraq issues the following statement:

In 1982 Iraq signed agreements with Banca Nazionale del Lavoro providing Letters of Credit guarantees for the companies having contracts with Iraqi establishments. Both contracting parties worked for the proper implementation of these agreements. Iraq, on its part, honored its obligations provided for by the agreement, i.e., prompt and exact payments.

However, the Embassy feels obliged to express astonishment at these unfounded reports including the account given by BNL officials who claimed that their Atlanta branch acted in violation of their bank policy and had no authorization to sign these agreements with Iraq.

The Embassy reiterates that Iraq is not involved in any way in the so-called irregularities. The agreements between Iraq and the BNL were lawful and the facilities provided for by these agreements were used for the implementation of development projects and the import of agriculture and food products and machinary of pure civil nature under contracts with well known Italian and US firms.

The Embassy believes that these reports are untrue and entirely detrimental to the interests of Iraq and Italian and US firms.

Furthermore, any BNL reluctance to implement these agreements would cause serious damage to these firms.

In the mean time, Iraq firmly abides by these agreements and is desirous to honor its part of these agreements in accordance with international laws and conventions. Iraq also expects the other party to do so.

--

Department of Agriculture,
Washington, DC, November 7, 1989.
Memorandum for: Stephen I. Danzansky, Director, Office of Cabinet Affairs.
From: Alan Charles Raul.
Subject: Iraq.

[Page: H2700]

Steve: Attached are possible materials for circulation by Treasury for tomorrow's NAC meeting.

Thanks for you help on all of this and please let me know if there are any additional materials I should prepare.

--

DEPARTMENT OF AGRICULTURE,

Office of the General Counsel,
Washington, DC, May 16, 1990.
Memorandum for Richard T. McCormack, Under Secretary of State; Edward S.G. Dennis, Jr., Assistant Attorney General; Timothy Deal, Special Assistant to the President and Senior Director, International Economic Affairs National Security Council.
From: Richard T. Crowder, Under Secretary, International Affairs and Commodity Programs; Alan Charles Raul, General Counsel.
Subject: Report of Administrative Review of Iraq GSM Program.

Attached for your review and clearance is a draft report of USDA's administrative review of certain transactions in connection with the GSM program for Iraq. We intend to release this document to the House and Senate Agriculture Committees, and make it available to the public, together with an executive summary and a press release. We believe it is essential to get these facts and conclusions out to the public as soon as possible.

In essence, after interviewing Iraqi agriculture officials and certain U.S. exporters, and reviewing certain bank records, exporter records and Iraqi records, we have concluded that certain Iraq GSM transactions improperly included freight charges within the amounts that were registered with USDA. In addition, the evidence suggests that a number of exporters provided Iraq with `after sales services' in possible violation of the GSM regulations.

--

--

House of Representatives,
Washington, DC, August 1, 1991.

Dr. Henry Kissinger,
Kissinger Associates, Inc.,
New York, NY.

Dear Mr. Kissinger: The Committee on Banking, Finance and Urban Affairs is investigating $4 billion in unauthorized loans to Iraq made by the former employees of the Atlanta branch of Banca Nazionale del Lavoro (BNL). The Banking Committee would like to learn more about your personal knowledge of BNL loans to Iraq as well as that of your firm, Kissinger Associates. Accordingly, in your capacity as a former member of the BNL Consulting Board for International Policy, the Committee would appreciate your response to the following questions:

A. Related to BNL:

1. How long were you a director of BNL? In what capacity (i.e. political consultant, financial advisor, etc.) did you serve BNL?

2. Is BNL a current or former client of Kissinger Associates? If yes, during what time frame?

3. As former employees of Kissinger Associates, did Mr. Lawrence Eagleburger or Mr. Brent Scowcroft have any involvement with BNL? If yes, in what capacity?

4. Were you or any employees of Kissinger Associates aware of the unauthorized BNL-Atlanta loans to Iraq? If yes, please explain.

5. Did Kissinger Associates employee Mr. Alan Stoga, visit Iraq in 1989 as an official of Kissinger Associates? If yes, in what capacity?

B. Related to U.S.-Iraq commercial relations:

1. Did Kissinger Associates ever assist its clients with any aspect of the U.S. export control process, the Export-Import Bank, or the Commodity Credit Corporation as it applied to exports to Iraq?

2. As employees of Kissinger Associates, did Mr. Lawrence Eagleburger or Mr. Brent Scowcroft have any involvement with the export control process, the Export-Import Bank, or the Commodity Credit Corporation as it applied to commercial relations with Iraq? If yes, please explain.

3. Was the U.S.-Iraq Business Forum (previously the U.S.-Iraq Business Roundtable) ever a client of Kissinger Associates?

4. Were any members of the U.S.-Iraq Business Forum Kissinger Associates clients?

5. Is First City Bancorp., Houston, Texas, or its affiliates, a current or former client of Kissinger Associates?

6. To the best of your knowledge, have you, or has any current or former employee of Kissinger Associates ever met with Mr. Saddam Hussein or any other Iraqi government officials to discuss U.S.-Iraq commercial relations?

7. Are any of the following current or former employees of Kissinger Associates:

a. U.S.-Iraq Business Forum Chairman--Robert Abboud?

b. Amman Resources, Amman Jordan;

c. Bank of Credit and Commercial International (BCCI);

d. First American Bank of New York or its affiliates.

Thank you for time and cooperation. With best wishes.

Sincerely,

Henry B. Gonzalez,
Chairman.

--

Kissinger Associates,
New York, NY, August 30, 1991.

Mr. Henry B. Gonzalez,
Chairman, Committee on Banking, Finance and Urban Affairs, Rayburn House Office Building, Washington, DC.

Dear Mr. Chairman: Your letter of August 1 raised a number of specific questions. Before responding to those, I would like to make two general points:

First, neither I nor any of my associates had any personal knowledge of loans to Iraq made by the Banca Nazionale del Lavoro (BNL) or any of its branches or subsidiaries;

Second, neither I nor Kissinger Associates, Inc. (KAI) have ever done any business in Iraq; nor has KAI ever done any business with or on behalf of any Iraqi entity government or private.

You asked twelve questions; my responses follow:

A. Related to BNL:

1. I was never a director of BNL. From 1985 to 1991, I served as a member of the bank's International Advisory Board, along with Raymond Barre (former Prime Minister of France), David Rockefeller (Chairman, Rockefeller Group), Pierre Trudeau (former Prime Minister of Canada), Lord Thorneycroft (former British Chancellor of the Exchequer and Minister of Defense), Lord Ezra (former Chairman of the British National Coal Board), Roberto de Oliveira Campos (Brazilian Senator), Silvio De Capitani (former Swiss Parliamentarian), Hans Merkle (Managing Partner, Robert Bosch Industrietreuhand), Enrique Fuentes Quintana (former Deputy President of Spain and Minister of Economic Affairs), Jean-Pierre Amory (Chairman, Petrofina S.A.), Horst Jannott (Chairman, Munchaner Rockversicherungs-G.), Pierre Ledoux (Chairman, Banque National de Paris), William Takagaki (former Managing Director, Mitsubishi Rayon Co. Ltd.) and Ettore Lolli (Chairman, International Advisory Board, Banca Nazionale del Lavoro). The Board met once a year to discuss international economic and political developments, with each member contributing comments on current developments in his own country. It was not the function of the Board to analyze, discuss, or pass on BNL's specific business activities.

2. BNL was a general consulting client of Kissinger Associates from July 1986 to June 1988, during which time we provided the Bank's senior management with briefings on international political and economic developments. We were not involved in advising the Bank on any specific business activities and had no involvement in any BNL business with or in Iraq.

3. As Vice Chairman of Kissinger Associates, Brent Scowcroft participated in the three general consulting meetings which were held with members of the senior management of BNL between July 1986 and June 1988. These meetings dealt with international political and economic developments, not with specific business activities of the Bank. As previously reported to the Senate Foreign Relations Committee, the KAI clients with whom Lawrence Eagleburger was involved did not include BNL.

4. Neither I nor my associates had any personal knowledge of BNL's loans to Iraq, authorized or unauthorized.

5. As Managing Director of Kissinger Associates, Alan Stoga visited Iraq in 1989 at the invitation of the U.S.-Iraq Business Forum to inform himself about conditions in that country.

B. Related to U.S.-Iraq commercial relations:

1. KAI represents no clients before U.S. Government agencies nor does it lobby any branch of the U.S. Government on behalf of clients. Therefore, Kissinger Associates did not assist its clients with any aspect of the U.S. export control process, the Export-Import Bank, or the Commodity Credit Corporation with respect to Iraq or any other country.

[Page: H2701]

2. As indicated above, neither Kissinger Associates nor any of its employees had any involvement with these U.S. Government agencies.

3. Neither the U.S.-Iraq Business Forum nor its predecessor organization was ever a client of Kissinger Associates.

4. I do not know which, if any, clients of Kissinger Associates were members of the U.S.-Iraq Business Forum.

5. Neither First City Bancorp nor any of its affiliates have ever been clients of Kissinger Associates.

6. As indicated, Mr. Stoga participated in the U.S.-Iraq Business Forum's trip to Baghdad in 1989 during which U.S.-Iraq commercial relations were discussed by the group with Saddam Hussein and other Iraqi officials. Additionally, Mr. Stoga and other employees of Kissinger Associates met with Iraqi diplomats on social occasions. At these meetings the Iraqis often expressed their desire for improved commercial relations with the United States. However, no specific commercial projects were ever discussed. Nor, as I mentioned above, has Kissinger Associates ever done any business in Iraq.

7. Kissinger Associates has had no relationship with A. Robert Abboud or any of the organizations you mention.

Sincerely,
Henry A. Kissinger.

--

--

U.S. Department of State,
Washington, DC, November 8, 1989.
To: The Acting Secretary.
Subject: Letter to Treasury Deputy Secretary Robson on a CCC Program for Iraq.

In your conversation earlier today, Department of the Treasury Deputy Secretary John Robson asked that you send him a letter outlining the policy reasons for which State strongly backed USDA's proposal for a full, billion-dollar program of Commodity Credit Corporation (CCC) credit guarantees, with safeguards, for Iraq. Attached is a letter for your signature that outlines those policy considerations. It essentially follows the talking points provided for your telephone conversation with Mr. Robson.

Recommendation: That you sign the attached letter to Deputy Secretary Robson.

Department of State,
Washington, DC, November 8, 1989.

The Hon. John E. Robson,
Deputy Secretary of the Treasury.

Dear John: Further to our discussion, on foreign policy grounds we support the Department of Agriculture's proposal for a full, billion-dollar program of Commodity Credit Corporation GSM-102 export credit guarantees in FY 90, with adequate safeguards, for Iraq.

In addition to the near-term benefits for agricultural sales, the CCC program is important to our efforts to improve and expand our relationship with Iraq, as ordered by the President in NSD-26. Iraq is a major power in a part of the world which is of vital importance to the United States. Our ability to influence Iraqi behavior in areas from Lebanon to the Middle East peace process to missile proliferation is enhanced by expanded trade. Also, to realize Iraq's enormous potential as a market for U.S. goods and services, we must not permit our displacement as a major trading partner.

With regard to the real concerns which arise from the investigation into the operations of the Atlanta branch of the Banco Nationale de Lavoro, we have received from the Government of Iraq a pledge of cooperation. Our intention is to hold Iraq to this commitment and to work with the Department of Agriculture to ensure that the problems with the program in the past are fully resolved in a new program. The safeguards proposed by USDA, including disbursement of the CCC guarantees in tranches, buttress the program and merit our backing.

I appreciate your support in this connection.

Sincerely,

Lawrence S. Eagleburger,
Acting Secretary.

--

Kissinger Associates,
New York, NY, October 7, 1988.

Abol Fazl Helmy,
Bank of Credit and Commerce,
New York, NY.

Dear Abol: I enjoyed lunch yesterday and, even more, your suggestion that BCCI might be interested in developing a relationship with Kissinger Associates.

As you suggested, I am enclosing a brief explanation of our firm and biographical sketches of our principals. I am not sure the former really does us justice, but I am reluctant to be more specific, at least on paper, about the kinds of consulting projects we undertake for clients. The key point, of course, is that our consulting and transaction work are rooted in the firm's understanding of geopolitics and economics: a client should not ask us how to build a polyethylene plant, but should ask about what is likely to happen in the various countries where that plant might be sited.

I agree that a next step should be for me to meet your management in London or in New York. I am not scheduled to be in London (I was there two weeks ago) the rest of this year, but might be able to arrange a detour either on November 10 or November 18 (between those days I will be in Sweden, France, and Italy). Alternatively, I could fly over for a day in early December, although for expense and convenience reasons, I would prefer to tie London into another trip. Let me know your thoughts on this.

I look forward to hearing from you soon,

Best regards,
Alan Stoga.

BANK OF CREDIT

and Commerce International,
New York, October 13, 1988.
From: Abol Fazl Helmy.
To: Mr. Swalch Naqvl.

Further to our recent conversation in London, I met with Mr. Alan Stoga who is one of the 3 partners of Kissinger Associates, Inc. Subsequently, the developments in the United States took place. Judging by the high level of adverse publicity that is being generated by the media, it is imperative that a firm response be made.

I received a call today from Mr. Stoga who informed me that Dr. Kissinger recommends that a public relations offensive be made by us and in that context has suggested using Burson-Marstellar, a highly reputable public relations firm that successfully dealt with the 1st Chicago crises last year. Kissinger Associates, Inc. have indicated that they shall be happy to use their personal contacts with the firm and make the necessary recommendations. I shall, of course, not proceed in any way without explicit instructions from you.

While I am certain, we have our fair share of advisors and consultants, I thought it prudent to pass on the information considering the importance of its source.

Best Personal Regards.

--

BANK OF CREDIT

and Commerce International,
New York, October 13, 1988.
From: bol Fazl Helmy.
To: Mr. Swalch Naqvl.

I am enclosing for your attention the relevant details on Kissinger Associates, Inc. as discussed.

I shall be meeting them tomorrow (October 14, 1988) to discuss further details. I shall keep you appropriately informed.

Best Regards.

--

BANK OF CREDIT

and Commerce International,
New York, October 14, 1988.
From: Abol Fazl Helmy.
To: Mr. Swalch Naqvl.

I just met with Mr. Alan Stoga, Dr. Kissinger's partner and discussed the relevant matters as per our phone conversation of yesterday.

I emphasized to Mr. Stoga that our conversation in getting our two respective organizations together have been going on for over a year and hence, have not been generated as result of the present circumstances.

I feel that a relationship could be established in the near future depending on how fast the present publicity ends.

I shall keep you duly informed of my next meeting with Dr. Kissinger himself which should be sometime next week.

Best personal regards.

--

--

BANK OF CREDIT

and Commerce International,
New York, December 19, 1988.
From: Abol Fazl Helmy.
To: Mr. Swaleh Naqvi.

I am in communication with Mr. Alan Stoga, Partner of Kissinger Associates, Inc. Their response was they are interested in principal but would like to wait a bit longer. I will be meeting Mr. Stoga in the first week of January, 1989 and will be discussing the issue further. It would be of interest for you to know that Mr. Scowcroft is now the National Security Adviser Designate in the Bush Administration and another Partner of Kissinger Associates is being tapped for Assistant Secretary of State in the Bush Administration. I shall keep you informed of my next meeting. You may agree that this association with Kissinger Associates, Inc. needs time to be cultivated. I am working in that direction.

If there are any further instructions with respect to this matter, please call prior to my January meeting.

Best Regards.

--

BANK OF CREDIT

and Commerce International,
New York, January 11, 1989.
From: Abol Fazl Helmy.
To: Mr. Swaleh Naqvi.

I had a lunch meeting with the gentleman on January 5, 1989 and a follow up telephone conversation on January 10, 1989. It was established that it is in our best interests for both parties to continue with the conversations. As such, the door for an eventual relationship remains open.

They were far more knowledgeable of the details of our situation during this meeting and made certain `unofficial' general recommendations which I shall convey to you at our next meeting. I am meeting my contacts senior partner by the end of January with a view of discussing our overall worldwide activities.

Best Regards.

--

--

[Page: H2702]

United States-Iraq Business Forum, Third Annual Symposium on United States Commercial, Economic, and Strategic Interest in Iraq, Tuesday, November 14, 1989

TOPIC: `FINANCING TRADE AND INVESTMENT WITH IRAQ'

Preliminary Program

Introductory Remarks, Marshall W. Wiley, President, United States-Iraq Business Forum.

Greetings and Commentary, His Excellency Dr. Mohamed Sadiq Al-Mashat, Ambassador of Iraq.

Panel One--`The United States and Post-War Iraq'

Sandra Charles, National Security Council Staff, The White House.

Michael H. Van Dusen, Staff Director, Subcommittee on Europe and the Middle East, House of Representatives Committee on Foreign Affairs.

Moderator: John R. Hayes, Middle East Public Affairs, Mobil Oil Corporation (Member of the U.S.-Iraq Business Forum).

Panel Two--`Economic Aspects of Financing Trade and Investment with Iraq'

Alan J. Stoga, International Economist, Kissinger Associates.

Vahan Zanoyan, Oil Economist, Petroleum Finance Institute.

Moderator: Witold S. Sulimirski, Servus Associates.

Panel Three--`Doing Business with Iraq'

Ray L. Hunt, Chairman of the Board, Hunt Oil Company (Member of the U.S.-Iraq Business Forum).

Donald N. DeMarino, Deputy Assistant Secretary of Commerce.

Moderator: William M. Arnold, First City Bancorporation of Texas (Member of the U.S.-Iraq Business Forum).

Luncheon Working Session

Presiding: A. Robert Abboud, Chairman of the Board and CEO, First City Bancorporation of Texas (Chairman of the Board, U.S.-Iraq Business Forum).

Address: Edward Cnehm, Deputy Assistant Secretary of State for Near Eastern and South Asian Affairs--`The Future of U.S.-Iraqi Relations.'

Closing Remarks

Lucius D. Battle, President, The Middle East Institute.

PARTICIPANTS

Elias Aburdene, Fairbanks Management Corporation.

James H. Andrews, M.W. Kellogg Company.

Garabed Armenian, Westinghouse Electric Corporation.

William Arnold, First City Bancorporation, Texas.

Frederick Axelgard, Center for Strategic & Interntl. Studies.

Lucius D. Battle, Middle East Institute.

Erol Benjenk, Fentex International Corporation.

Hani N. Beyhum, Olayan Development Corporation.

Carolyn Brehm, General Motors Corporation.

Patrick A. Briggs, Bell Helicopter Textron, Inc.

David Chambers, U.S.-Iraq Business Forum.

Sandra Charles, National Security Council Staff.

Ronald C. Clegg, Bell Helicopter Textron, Inc.

George Coy, Office of Congressman Feighan.

Robert R. Copaken, Department of Energy.

Lynn Coprivira, Dantzler Lumber and Export Company.

Charles Delaplane, Department of Agriculture.

Donald N. DeMarino, Department of Commerce.

Luis Echeverria, Export-Import Bank of the U.S.

Majed Elass, ARAMCO.

Bryan Estep, Luxor California Exports.

Ghaleb O. Faidi, National U.S.-Arab Chamber of Commerce.

Benedict F. FitzGerald, BDM International.

Michael Foster, Abu Dhabi International Bank.

Jay Ghazal, Office of Senator Pell.

Edward Gnehm, Department of State.

Harry Griffith, Brown & Root.

John Haldane, U.S.-Iraq Business Forum.

Thomas Harrold, Glan McCullock Sherrill & Harrold.

John R. Hayes, Mobil Oil Corporation.

John M. Howland, American Rice, Inc.

Arthur H. Hughes, Department of State.

Ray L. Hunt, Hunt Oil Company.

Evaleen Jaager, General Motors.

Paul Jabber, Bankers Trust Company.

Les Janka, Neill and Company.

Ed Jesteadt, AT&T International.

K. Kachadurian, Ionics, Inc.

Riad Khayali, AT&T Network Systems.

James King, Glan McCullock Sherrill & Harrold.

Mary King, U.S.-Iraq Business Forum.

Michael Kostiw, Texaco, Inc.

Diane Landau, AT&T Network Systems.

Alexander Lang, AT&T International.

John Lawrence, Neill and Company.

Lloyd R. Lawrence, Jr., Bob Lawrence and Associates.

William Lehfeldt, General Electric Company.

Paul R. Lensch, Caterpillar, Inc.

John Lesting, Continental Grain Company.

Gerald P. Lewis, AT&T Network Systems.

Peter J. Little, Boeing Commercial Airplanes.

M.J. Lyons III, American Cast Iron Pipe Company.

Phebe Marr, National Defense University.

Terry Martin, Anodyne, Inc.

Lawrence McBride, Sneed McBride International.

Robert D. McFarren, Stone & Webster Engineering Corporation.

Robert M. McGee, Occidental International Corporation.

Michael A. Miller, Occidental International Corporation.

Rick Myers, Anodyne, Inc.

Khalid Mohammed, Embassy of Iraq.

L.T. Nierth, Jr., Texaco, Inc.

Robert M. McGee, Occidental International Corporation.

Thomas Nassif, Gulf Interstate International.

William T. O'Malley, Sikorsky Aircraft, United Technologies.

Charles K. Olson, Dearborn Financial, Inc.

Raad B. Omar, Embassy of Iraq.

Clarence Ornsby, Servaas, Incorporated.

Kristina L. Palmer, Middle East Institute.

Ark W. Pang, Ionics, Inc.

Andrew T. Parasiliti, Middle East Institute.

John N. Parker, Mobil Corporation.

Arthur Pilzer, Export-Import Bank of the U.S.

James A. Placke, Paul, Hastings, Janofsky & Walker.

Stephen Plopper, SerVass, Inc.

Suzanne Pond, Department of State.

Charles T. Prindeville, International Resources Trading Company.

Ali Qaragholi, Crescent Construction Company.

Yousif M. Abdul Rahman, Embassy of Iraq.

Muzhir Razoki, Embassy of Iraq.

Burke G. Reilly, Ford Motor Company.

Philip Remler, Department of State.

John E. Rhame, General Motors Corporation.

Marc Rose, Pepsi-Cola International.

Thomas E. Rowney, BDM International.

Thomas A. Sams, Department of Commerce.

Helmut L. Stark, General Motors Overseas Corporation.

Alan J. Stoga, Kissinger Associates.

Witold S. Sulimirski, INTERCAP Investments, Inc.

S.A. Taubenblatt, Bechtel Group, Inc.

Michael Van Dusen, House Subcommittee on Europe and the Middle East.

Christopher Van Hollen, Middle East Institute.

Marshall Wiley, U.S.-Iraq Business Forum.

Guenther Wilhelm, Exxon Corporation.

William F. Williams, Bank of New York.

Vahan Zanoyan, Petroleum Finance Institute.

[TIME: 1400]

The SPEAKER pro tempore. Under a previous order of the House, the gentle woman from Ohio, [Ms. Kaptur] is recognized for 60 minutes.

[Ms. KAPTUR, addressed the House. Her remarks will appear hereafter in the Extensions of Remarks.]

The SPEAKER pro tempore. Under a previous order of the House, the gentleman from Illinois [Mr. Poshard] is recognized for 60 minutes.

[Mr. POSHARD, addressed the House. His remarks will appear hereafter in the Extensions of Remarks.]

END



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