Protect Evidence in Iraq Loan Fraud Case, Gore Urges : Gulf War: Candidate implies data detailing Italian bank’s involvement in Baghdad arms build-up has been covered up.

Democratic vice presidential nominee Al Gore demanded Saturday that President Bush use “special measures” to protect any government documents relevant to allegations that federal agencies had failed to disclose information about a multibillion-dollar bank fraud involving Iraq.

“Right now, before any more cover-up takes place . . . (Bush) ought to take the steps necessary to safeguard the evidence about what they did toward building up (Iraqi President) Saddam (Hussein)’s war machine,” Gore said, pausing briefly from his weekend of preparations for Tuesday’s vice presidential debate.

The Tennessee senator’s comments dealt primarily with the continuing investigations into $5 billion in loans to Iraq made between 1985 and 1989 by the Atlanta branch of Banco Nazionale del Lavoro, a bank owned by the Italian government. Iraq used some of the loans to pay for military projects before its 1990 invasion of Kuwait.

An Administration official responded by saying that Gore “is manufacturing anxieties unnecessarily.”

“There’s a system in place that guarantees that such information is preserved, and the whole thing is politically motivated,” said the official, who declined to be identified.

Gore, a member of the Senate Armed Services Committee, has made a campaign issue of Bush’s “coddling” of Hussein, arguing that government actions encouraged the Iraqi dictator to believe that he could invade Kuwait without any U.S. opposition.

Congressional Democrats and U.S. District Judge Marvin H. Shoob, who has presided over judicial proceedings in the BNL case in Atlanta, have accused Justice officials of interfering with the efforts of the department’s prosecutors there. Democrats also have speculated that there has been a wide-ranging government cover-up of the case to avoid embarrassment to the Bush Administration.

The CIA has acknowledged that it had failed to give Atlanta prosecutors information in its files indicating that Italian officials were aware that the Atlanta branch was making the loans. Without those documents, prosecutors built a case on the theory that bank officials in Atlanta were acting alone.

In his remarks, Gore described as “startling news” reports published Saturday that Justice and CIA senior officials were locked in a dispute over who was to blame for providing the bad information.

According to government sources, CIA lawyers told the Senate Intelligence Committee in a closed-door meeting Thursday that the agency was advised by a senior Justice official last month not to correct a misleading document sent to Shoob and prosecutors. The document failed to disclose that the CIA had recently found cables in its files indicating that senior BNL officials in Rome had been aware of the loans.

CIA director Robert M. Gates has ordered an internal investigation of the matter. But Gore called for additional action.

“I am formally calling on President George Bush today . . . to order all his Cabinet-level departments and the intelligence community to take special steps to protect any documents relevant in this matter,” he said. “We’ve had too much going on here in the last few days.”

Also Saturday, the CIA issued a statement denying that agency officials told the Senate Intelligence Committee that the CIA had deliberately misled Atlanta prosecutors, or had been urged to do so by the Justice Department. The statement said that some press accounts of the meeting Thursday were inaccurate and that Congress will have an opportunity to review a transcript of the meeting to determine the truth.