$495 Million in Iraqi Funds Found in Lebanon

Lebanese bankers say they have found more than $495 million in Iraqi funds that had been secreted outside Iraq, Bush administration officials said Wednesday, as new details of the suspected plunder of public funds by the regime of Saddam Hussein continued to emerge.

A senior Treasury Department official also said the hundreds of millions of dollars that had been found stashed in hiding places in Iraq was most likely the same money that Hussein’s son Qusai removed from Iraq’s central bank just before the U.S.-led invasion began in March.

If that is the case, a key concern of U.S. authorities -- that stolen cash could be used to fund a campaign to destabilize Iraq or be funneled to terrorists -- will have been eased.

Testifying before a House subcommittee, senior officials presented a still-hazy picture of financial maneuvers by the Hussein regime. So far, the efforts to trace Iraqi funds have accounted for several billion dollars in now-frozen bank accounts, as well as in less traditional places.

David Aufhauser, the Treasury Department’s general counsel, said the money held in suspended or frozen accounts is believed to be “upward of $2.3 billion.”

Aufhauser testified with State Department and Pentagon officials before the oversight and investigations subcommittee of the House Financial Services Committee.

The search for Iraqi money stashed away has been ongoing since the war started. The digging by U.S. troops has given way to records checks by U.S. officials and questioning of detained former Iraqi officials to find hidden accounts.

At the heart of the search is the conviction that Hussein and his supporters operated a thoroughly corrupt regime, skimming vast sums from official transactions and oil sales to fund a lavish lifestyle and squirrel away a huge amount of cash.

“The long war with Iran, the unlawful invasion of Kuwait, the elevation of palace corruption to an art form and the decade of sanctions, bookended by obscene public extravagances in the palaces while the common man lined up at one of 55,000 U.N. food distribution points, all bankrupted a rich country,” Aufhauser said.

U.S. military personnel found $650 million in sealed-up cottages, more than $100 million in several animal kennels and other bundles in cinderblock storage sheds.

Aufhauser said that “it’s more likely than not” that the money was indeed part of the $1 billion Qusai Hussein plundered from the central bank March 18.

“Some 236 boxes of cash, either euros or U.S. dollars, were packaged that night by central bank personnel, but they were very meticulous in the records they kept.... They put certificates in the boxes indicating how much money had been placed in them,” Aufhauser said. “Out of the 236 boxes, we may well have found 191, constituting $850 million U.S., give or take, and 100 million of euros.”

Reporting on the money found in Lebanon, Aufhauser said it had come from Iraq’s central bank and the state oil marketing organization. He said it “has been secured and will not be released to anyone until we stand up a new central bank” in Baghdad, at which time Lebanon has promised to return it to Iraq.