Federal Probe of Iraq Loans Criticized : Inquiry: Lawyer for key figure in case says prosecutors would rather put the matter to rest than follow leads about the $5-billion scheme.

Federal authorities debriefing the former manager of an Italian bank here want to end his controversial case rather than pursue leads that could show whether his superiors in the bank knew about $5 billion in hidden loans to Iraq, according to the ex-banker’s lawyer.

The claim follows similar charges by a federal judge and Democratic congressmen who have questioned whether fears of embarrassing the Bush Administration have affected the three-year investigation.

“I think the government is interested in putting it to rest,” Bobby Lee Cook, a prominent Georgia defense lawyer, said in his first interview since taking over the case of Christopher P. Drogoul, who has pleaded guilty to arranging the loans. “It is a charade.”

After several meetings with Drogoul since he got into the case 10 days ago, Cook said he believes that prosecutors are ignoring evidence that officials at the Rome headquarters of Banca Nazionale del Lavoro knew about the loans.

Cook said Drogoul’s interrogators are persisting in the view that Drogoul ran BNL’s Atlanta branch as a rogue operation without the knowledge of any of his superiors.

The prosecutor supervising the case objected sharply to Cook’s charge, contending that the questioning of Drogoul since his guilty plea in June has been professional and thorough.

“We are absolutely interested in following every lead, regardless of where it leads,” said Gerrilyn G. Brill, acting U.S. attorney for the case. “We are doing that, and we have done that. I take real issue with what Mr. Cook has said, and I don’t believe Mr. Cook is in a position to know what went on in those debriefings.”

The dispute is the latest in the saga revolving around the $5 billion in loans to Iraq by the Atlanta branch of BNL, which is owned by the Italian government. Federal investigators say that Iraq used some of the loans to buy weapons.

The Times reported earlier that charges in the case were delayed for more than a year and that the investigation was monitored by the State Department and White House because of its potential impact on relations with Iraq, which was being courted by President Bush when the inquiry began in the fall of 1989. It also has been revealed that a White House lawyer took the unusual step of telephoning the prosecutor that fall.

Drogoul, two other branch employees and four Iraqi officials were indicted for concealing the loans, money laundering and conspiracy on Feb. 28, 1991--the day after Bush declared a cease-fire in the Persian Gulf War.

The House Judiciary Committee questioned the handling and timing of the case when it requested an independent counsel to investigate prewar Administration policy toward Iraq. U.S. District Judge Marvin H. Shoob, who is presiding over the case, also called for a special prosecutor after saying that he feared he was going to get a “sanitized” version of what took place at BNL after a disputed plea bargain between Drogoul and the government.

In rejecting the independent-counsel request last month, Atty. Gen. William P. Barr denied that the BNL case has been mishandled or tainted by politics. He accused Shoob of misconstruing events surrounding Drogoul’s plea.

But in a recent interview, the judge repeated his concern about whether all the facts will emerge at Drogoul’s sentencing hearing, which begins Sept. 14.

“This case contains more unanswered questions than any case that I’ve been involved in, particularly since you have a plea and still dozens of unanswered questions,” Shoob said.

He said that he has an obligation to understand the facts before sentencing Drogoul, who faces up to 390 years in prison. But Cook maintained that the government will make his client a “scapegoat.”

Cook has represented such high-profile clients as Bert Lance, a budget director during the Jimmy Carter Administration, and convicted serial killer Wayne Williams. He agreed to represent Drogoul without charge after an appeal from Drogoul’s sister. Drogoul fired the public defender who had been his lawyer.

There have been hints that Drogoul could drop a major bombshell and implicate U.S. officials at his sentencing. But Cook said that Drogoul does not know what U.S. officials knew about BNL.

Rather, he charged that the information investigators have not pursued deals primarily with meetings at which Drogoul’s superiors acknowledged that they knew about the loans to Iraq, which netted BNL about $10 million in commissions between 1985 and 1989.