Boren, on Iraq Loan Case, Asks Outside Counsel

The chairman of the Senate Intelligence Committee called Wednesday for an independent counsel to investigate whether the Justice Department and CIA broke laws in submitting a misleading document to a federal court last month in a sensitive Iraqi loan case.

In an unusual public statement, the chairman, Sen. David L. Boren (D-Okla.), said the Justice Department no longer can be trusted to investigate the matter because it advised the CIA to provide the misleading information.

“A truly independent investigation is required to determine whether federal crimes were committed in the government’s handling of the . . . case,” Boren said in a letter to Atty. Gen. William P. Barr in which he asked that a special prosecutor be named.

Boren and others said their concerns were heightened by disclosures this week that the Justice Department was investigating FBI Director William S. Sessions on a number of allegations, a development that they interpreted as a possible attempt to stifle an independent FBI inquiry into the matter.

Boren’s request thrusts the Justice Department into a highly charged political arena where its impartiality and integrity are being challenged.

The Democratic presidential ticket has criticized the department’s handling of the investigation, involving loans by Banca Nazionale del Lavoro to Iraq, as part of its broadside against the Bush Administration. Other criticism comes from less likely sources, such as the CIA and Boren, whose committee has a tradition of bipartisanship and rarely engages in political attacks.

The controversy over the misleading information erupted in public after two days of closed-door hearings before the Senate Intelligence Committee last week. It was disclosed that a Sept. 17 CIA letter to the federal judge handling the BNL case in Atlanta did not reflect several pieces of critical classified information in agency files.

The BNL case involves $5 billion in loans made to Iraq before the Persian Gulf War by the Atlanta branch of the bank, which is owned by the Italian government. Some of the loans were used for military purposes, and the handling of the case has been criticized sharply in Congress in recent months.

CIA officials told the Intelligence Committee that the Justice Department had offered “strong advice” not to clarify the letter to the judge. However, a senior Justice lawyer said the CIA was told to make its own decision.

Both agencies tried to dampen the apparent feud with public statements, but the disclosure sparked renewed calls for Barr to seek an independent counsel to investigate the BNL case.

Barr rejected a similar request from the House Judiciary Committee in August. His chief spokesman said Wednesday that there is no evidence indicating a need for an independent counsel because Barr ordered the department and FBI to open an inquiry last Friday.

“We’re conducting an investigation of the CIA’s production of documents to the department in the BNL matter and of department involvement in that effort,” said the spokesman, Paul McNulty. “At any time, if we come across information which would lead to the appointment of an independent counsel according to the provisions of the statute, we will follow the statute.”

A Justice Department official who asked that his name be withheld described the requests by Boren and two other Democrats in recent days as “political piling on,” and he speculated that similar calls will be heard until Election Day.

Sources close to Sen. Joseph R. Biden Jr. (D-Del.), chairman of the Senate Judiciary Committee, said that Biden is considering whether to seek an independent counsel but that no decision is expected for a few days.

With Congress and others demanding investigations by independent counsels, rather than by the Justice Department, legal experts are wondering whether the agency’s role as the nation’s paramount law enforcement agency is being eroded.

Daniel J. Meador, a law professor at the University of Virginia and expert on the Justice Department, said: “The attorney general is appointed by the President and typically is loyal to the President. Still, he is charged with enforcing the law impartially, and we get worried if that balance is not struck properly.”

Sen. John H. Chafee (R-R.I.), an Intelligence Committee member, refused to characterize Boren’s request for a special prosecutor as political but said the Oklahoma Democrat acted too quickly.

“What we have to date suggests that there was some bungling, and nothing so far suggests there was anything sinister,” Chafee said in an interview. “I certainly believe we ought to continue to dig into this, but to say that we need a special prosecutor at this point is inappropriate.”

Boren said he acted after news accounts involving allegations against Sessions. The allegations include charges that Sessions, his wife and a special assistant misused government telephones and that Sessions provided conflicting statements about his tax status.

“It really troubles me and made me question how we can have confidence in the Justice Department in this matter,” Boren said in an interview.

Rep. Don Edwards (D-San Jose), a Sessions supporter and chairman of a House Judiciary subcommittee that oversees the FBI, also interpreted the Sessions reports as an attempt to thwart the FBI investigation of the BNL matter.

“The fact that they (Justice Department sources) are blabbing like Niagara Falls violates all their rules and is very, very suspicious, almost obscene,” Edwards said in an interview.

Justice Department officials pointed out that the Sessions inquiry began at least three months before the CIA letter was written. And an aide to a Democratic congressman said it seemed odd for the Administration to try to deflect the BNL investigation by publicizing an investigation of its own FBI chief.

Sessions is to be questioned today by investigators for the Justice Department’s Office of Professional Responsibility about a range of ethical allegations involving him, his wife, Alice, and his executive assistant, Sarah Munford.

James R. Phelps, a Washington lawyer representing Sessions and Munford, is understood to have expressed concern about Sessions’ being questioned by the department’s public integrity section, which is conducting a preliminary criminal investigation of Sessions on tax and telephone misuse allegations.

Phelps, who did not return calls, was said to have noted that the same section is overseeing the FBI’s BNL investigation and suggested that the two inquiries could cause a conflict.