Withdrawal of Ex-Banker’s Guilty Plea Sought in Iraqi Loan Case

Lawyers for a former banker asked Thursday to withdraw their client’s guilty plea in connection with a multibillion-dollar loan scheme that helped build Iraq’s war machine.

Christopher P. Drogoul’s lawyers said they do not believe that he is guilty. They said Drogoul was acting with permission of his superiors at Italy’s Banca Nazionale del Lavoro. They also claimed that Drogoul was aiding the U.S. government’s prewar policy of supplying arms and technology to Iraq.

Prosecutors indicated that they are likely to oppose the motion to withdraw the plea. U.S. District Judge Marvin H. Shoob, who will decide whether to grant the request and order a trial for the ex-banker, said he will issue his ruling Tuesday.

The move by Drogoul’s lawyers means the Bush Administration may not be able to close the door any time soon on a criminal case that has taken on harsh political overtones. Instead, it opens another front for dispute until after the November presidential election.

House Democrats used the BNL case as an example of possible government misconduct when they sought unsuccessfully to obtain an independent counsel to investigate the Bush Administration’s Iraq policies.

Drogoul, 43, was the Atlanta branch manager for the Italian-government-owned bank from 1985 until August, 1989, when FBI agents raided the branch. The agents discovered that $5 billion in loans to Iraq had been concealed from bank auditors and federal regulators.

Some of those loans were later found to have been used by Iraq for military purposes, including improving the Scud missiles that took U.S. and Israeli lives in the Persian Gulf War. Other loans were guaranteed by the U.S. Agriculture Department and form part of the $1.9 billion in Iraqi debt being paid off by American taxpayers.

The government has portrayed Drogoul as the scheme’s mastermind, a role he seemed to accept in June when he pleaded guilty to 60 counts in the 347-count indictment and agreed to cooperate with prosecutors. However, in mid-August he fired his court-appointed public defender, hired a new lawyer and stopped cooperating.

The government responded by refusing to seek a lighter sentence for him, and Drogoul now faces life in prison without parole.

His new lawyer, Bobby Lee Cook, attacked the government’s case this week during the sentencing hearing. From the start, he also discussed with Drogoul the possibility of withdrawing the plea and setting the stage for a trial.

“We have reached that moment of truth,” Cook said Thursday.

Shoob delayed the sentencing hearing until after he rules on the plea withdrawal. If he grants the request, the trial is not expected to begin until at least next spring.