Official Alleges Data on Loans to Iraq Was Shredded : Persian Gulf: Gonzalez reports the call about action by Agriculture Department employees. But no evidence to support the assertion is found.

A senior Agriculture Department official told Congress that department employees spent last weekend shredding documents related to $5 billion in loans at the center of the controversy over Bush Administration aid for Iraq, Rep. Henry B. Gonzalez (D-Tex.) said Tuesday.

Gonzalez, whose House Banking, Finance and Urban Affairs Committee has been investigating the loans and other Iraq issues, said the official telephoned his staff and reported that employees had destroyed documents from files of the department’s Commodity Credit Corp.

No evidence has been found confirming the allegation, however, and Gonzalez declined to identify the caller, saying that he wanted to protect the official’s job.

The Senate Agriculture Committee received similar tips Friday and Monday. Two staff members dispatched to the Agriculture Department after an initial call on Friday found no evidence that Iraq documents had been shredded.

In a letter, Gonzalez demanded that Agriculture Secretary Edward R. Madigan investigate the allegation. Senate Agriculture Committee Chairman Patrick J. Leahy (D-Vt.) also asked the department’s inspector general to secure all Commodity Credit records and logs showing who had access to shredders.

A spokesman for Madigan said an initial inquiry launched in response to the Gonzalez letter uncovered no evidence that records have been destroyed.

“Senior USDA officials have investigated as thoroughly and quickly as we could and thus far have been unable to find any evidence that any shredding of documents related to Iraq took place,” said Douglas Adair, the department’s deputy press secretary.

The Commodity Credit program was the major U.S. aid program for Iraq, allowing Baghdad to purchase U.S. food and other commodities on credit when its financial stability was in doubt. As a result, the program has been a focus of criticism of the Administration’s support for Iraq before the Persian Gulf War.

Evidence that Iraq traded some of the commodities it obtained under the program for weapons is expected to be part of the investigation started two weeks ago by a special investigator and task force appointed by Atty. Gen. William P. Barr.

Federal criminal investigators in Atlanta have been pursuing evidence of such trades as part of the scandal involving loans to Iraq by the Atlanta branch of Italy’s Banca Nazionale del Lavoro. About $2 billion of those loans were guaranteed by the Agriculture Department program.

There also have been allegations that the Agriculture Department failed to adequately investigate Iraqi abuses of the Commodity Credit program before the Gulf War under pressure from the Administration.

Iraq stopped payment on $1.9 billion in outstanding loans guaranteed by the program when it invaded Kuwait in 1990, leaving American taxpayers holding the bag.

While the only reports of shredding appeared to be the telephone calls, the allegation is similar to an unrelated charge that was proved last week at the Agriculture Department.

After a call from a whistle-blower to the Senate Agriculture Committee last Wednesday, it was discovered that an Agriculture Department official had shredded documents related to alleged improprieties in contracts and hiring.

The official was in the Agricultural Stabilization and Conservation Service offices, the same location where Gonzalez said his informant asserted that Commodity Credit documents had been destroyed.

Adair acknowledged that staff members in that office have direct access to Commodity Credit files, but he said last week’s shredding incident had nothing to do with Iraq or the loan program.

James M. Cubie, chief counsel of the Senate Agriculture Committee, said two committee staff members were sent to the department Friday after a second caller said that Iraq-related records had been shredded too.

The staffers sifted through bags of shredded paper but found nothing that appeared to relate to Iraq or the loan program, Cubie said.

The shredding allegation arose Tuesday as Gonzalez and other witnesses told a Senate Banking, Housing and Urban Affairs Committee hearing that President Bush was wrong when he said in the final presidential debate that U.S. technology did not help Iraq build its military arsenal.

Sen. Al Gore (D-Tenn.), his party’s vice presidential nominee, cited the Gonzalez letter at a rally on the University of Wisconsin’s Oshkosh campus. In recent weeks Gore has asked Bush to order all Cabinet and senior officials to take steps to protect any documents related to the loans to Iraq.

Bush has accepted accolades for winning the Gulf War, “so he should be prepared to have the record of his activities leading toward that war examined,” Gore said.

Today on the Trail . . .

Gov. Bill Clinton campaigns in Houston; Jackson, Miss.; Louisville, Ky., and Toledo, Ohio.

President Bush campaigns in Lima, Toledo, Cleveland and Columbus, Ohio, and Detroit.

Ross Perot campaigns in Denver.

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