Rep. Gonzalez Tells Clinton of ‘Stonewalling’ on Iraq Loan Case

<i> From a Times Staff Writer</i>

The chairman of the House Banking, Finance and Urban Affairs Committee said Tuesday that he has told President Clinton the Administration is blocking the congressional investigation into how an Italian bank helped finance Iraq’s military buildup before the Persian Gulf War.

Chairman Henry B. Gonzalez (D-Tex.) released a letter to Clinton in which Gonzalez said that his committee has been refused access to classified documents necessary for its investigation, despite a promise of cooperation from Clinton in February.

The panel’s investigation focuses on what the Federal Reserve Board, the CIA and other U.S. agencies knew about $5 billion in loans to Iraq by the Atlanta branch of Italy’s Banca Nazionale del Lavoro.

Congressional Democrats accused senior aides to then-President George Bush of covering up knowledge of the loans to keep funds flowing to Iraq before the war.


“It now appears that the same agencies and many of the same bureaucrats that fought to derail the committee’s probe during the Bush Administration have thus far been successful in stonewalling to make sure that their bungled handling of the BNL case and the prewar Iraq policy is not fully subject to congressional scrutiny,” Gonzalez wrote to Clinton.

The U.S. Justice Department is investigating various aspects of U.S. policy toward Iraq before the war, including the role played by BNL and American companies in assisting Baghdad’s military buildup.