Clinton Says He Will Revive Iraqi Loan Probe

President-elect Bill Clinton said Thursday he is not satisfied that all the facts have come to light on the Justice Department’s handling of a controversial Iraqi loan case, and declared that he will ask his attorney general to look into the matter after he takes office.

Clinton’s comment appeared to be a tacit slap at a report issued Wednesday by a Justice Department special investigator, which found no wrongdoing by the department in its investigation of $5 billion in illegal loans to Iraq by the Atlanta branch of Italian-owned Banca Nazionale del Lavoro.

Calling the controversy “errant nonsense,” the report by former Judge Frederick B. Lacey declared that there are no grounds for further inquiry by an independent counsel.

The BNL investigation has been criticized by Democrats in Congress and others who assert that it was hampered by the Bush Adminstration’s desire to conceal the extent of its prewar assistance to Iraq and other political considerations.

Clinton, at a press conference in Little Rock, Ark., said he will ask his attorney general to re-evaluate the case and advise him whether to seek an investigation by a court-appointed independent counsel.

“I certainly think we need to know more about it than we now know,” Clinton said. “And what I intend to do is to appoint an attorney general and then get a recommendation on it.”

The independent counsel statute expires Tuesday. Clinton said he will support reinstating the statute to handle sensitive cases that might involve high-ranking government officials or inquiries in which the Justice Department may have a conflict of interest.

“I have to tell you I think it should be re-enacted and I will support that,” said Clinton.

Congressional Democrats, angered by Atty. Gen. William P. Barr’s refusal to seek an independent counsel on Iraq-related issues, are likely to support a re-enactment of the law when the new Congress convenes next month.

Rep. Charles Schumer (D-N.Y.), a senior member of the House Judiciary Committee, said Thursday that Lacey’s report did not address many of the questions raised during congressional investigations of the Bush Administration’s policy before the Persian Gulf War toward Iraq.

“I’d say there are a good number of unanswered questions in this report and there ought to be an independent counsel or a further investigation,” Schumer said on the “MacNeil/Lehrer NewsHour” on PBS-TV.

Lacey also appeared on the show and defended his findings. However, Lacey grudgingly acknowledged that the scope of his inquiry was limited to the Justice Department’s handling of the BNL investigation and that he did not have the time to address larger issues regarding such matters as the alteration of export licenses and possible misleading testimony to Congress.

“I can’t say that no crime was committed in the last four years or the last eight years,” said Lacey.

He said that he hopes the new attorney general will continue the investigation, although he said he firmly believes that his conclusions will be borne out.

Although Barr rejected a congressional request for an independent counsel in the BNL case in August, he responded to renewed pressure in October by naming Lacey as a special investigator.