Bush Is Asked to Testify in Iraq Loan Trial

Former President George Bush was subpoenaed Tuesday to testify in the coming criminal trial of an Atlanta banker accused of providing $5 billion in unauthorized loans to help finance Iraq’s military buildup before the Persian Gulf War.

The banker’s lawyer argued that Bush’s testimony could prove that the U.S. government knew of the loans and permitted them as part of a strategy to arm Iraq secretly in its war against Iran and later to win favor with Iraqi leader Saddam Hussein.

Bush has been asked to testify and provide 37 documents in the trial of Christopher P. Drogoul, the former manager of the Atlanta office of Italy’s Banca Nazionale del Lavoro. Drogoul’s lawyer also has subpoenaed records from the consulting firm of former Secretary of State Henry A. Kissinger, who was an adviser to the Italian bank.

The Justice Department accepted the subpoena on behalf of Bush and was examining whether to argue, on grounds of presidential privilege, that he should not be required to testify, an official said. It will be up to the judge in the case to decide whether to force Bush to appear in the trial, which begins Sept. 8.

When controversy over its Iraq policy arose last year, the Bush Administration argued that U.S. assistance to Hussein was an attempt to stop Iran in its eight-year war with Iraq and later to persuade Hussein to temper his behavior. Officials have maintained that they were unaware of the $5 billion in loans by Drogoul.

Among the documents sought from Bush are minutes from three meetings he had with former Italian Prime Minister Guilio Andreotti from 1985 to 1989. Simels said he has evidence that Bush and Andreotti discussed financing for the Iraqi arms-buying network.

Banca Lavoro is owned by the Italian government. Drogoul was the manager of its small Atlanta office from 1984 until the office was raided by the FBI in August, 1989.