The Case That Won’t Go Away : Lacey letter suggests likelihood of special prosecutor for Iraqgate

Atty. Gen. William P. Barr may be compelled to seek the appointment of a special prosecutor after all to investigate possible wrongdoing by the Bush Administration in the bank scandal involving illicit loans to Iraq before its invasion of Kuwait in 1990.

Barr had earlier rejected demands from the House Judiciary Committee for a special prosecutor, arguing that the allegations of misconduct that had been raised were too imprecise to warrant such a step. Instead, as criticism from Congress continued, Barr asked retired federal judge Frederick B. Lacey to look into the matter. That prompted suspicions that Barr’s aim was to foot-drag until the Ethics in Government Act, which provides for the appointment of independent counsels, expires on Dec. 15.

On Oct. 26, Lacey wrote to Barr that he had become convinced that there was “sufficient and credible evidence” of possible wrongdoing to move on to the next phase of investigation. That letter, sent only eight days before the presidential election, was learned of only in the last few days, in response to press queries to Lacey about how his work was proceeding.

Barr has since asked Lacey to recommend by Dec. 8 whether the attorney general should seek the appointment of a special counsel. There is thus a possibility that an independent investigation could be set in motion before the ethics act expires. There is of course a far stronger possibility that the Clinton Administration will join with Congress to pursue this matter considerably more vigorously than it has been pursued so far.

The immediate issue is how the government handled the investigation and prosecution of the Atlanta branch of an Italian bank that provided billions in loans and credits to Iraq, some of which went for arms purchases. It is a politically charged issue, involving among other things possible interference by the White House in the initial investigation, pressure from the Italian government and the withholding of some key CIA documents from the judge in the Atlanta bank case.

There is, in sum, more than enough here to warrant the naming of a special counsel. Barr really didn’t need Judge Lacey’s help to figure that out.