Advertisement

Ex-Bank Manager Pleads Guilty in Iraq Loan Case

September 03, 1993|DOUGLAS FRANTZ | TIMES STAFF WRITER

WASHINGTON — The former manager of an Italian bank branch in Atlanta pleaded guilty Thursday to charges stemming from $5 billion in loans that helped Iraq arm itself before the Persian Gulf War.

The latest twist in the convoluted case came 10 days after the Clinton Administration had announced that its own investigation had found the Justice Department under former President George Bush to have concluded correctly that the Atlanta manager operated without the knowledge of his superiors in Rome.

In a plea bargain approved by Atty. Gen. Janet Reno and disclosed in federal court in Atlanta, Christopher P. Drogoul, 44, admitted to three of 70 charges against him, including lying to federal bank regulators and failing to receive written approval for the interest rate on a single $5-million loan.

The arrangement leaves Drogoul room to deny acting without the approval of his superiors.

"It remains the position of Mr. Drogoul that the loans to Iraq were authorized by his superiors in Rome," said his lawyer, Robert M. Simels.

The outcome effectively concludes a prosecution that played a part in accusations last year that the Bush Administration secretly armed Iraq before the Persian Gulf War and later tried to cover up the extent of its assistance.

Democrats in Congress and U.S. District Judge Marvin H. Shoob, who originally presided over the case, last year sought an independent counsel to investigate the handling of the Drogoul case. President Clinton had promised before his election that his attorney general would investigate the matter.

Critics claimed that the Bush Administration had tried to whitewash allegations that Italian and U.S. officials knew the loans were part of a covert scheme to arm Iraq in the 1980s. They said the investigation was tainted by interference from the Bush White House and by the withholding of CIA information that bank officials in Rome knew of the loans.

However, a special assistant to Reno said in court in Atlanta last month that his four-month investigation had found no credible evidence that anyone outside the Atlanta office of Italy's Banca Nazionale del Lavoro was aware of the loan scheme.

Under the plea bargain, prosecutors will recommend that Drogoul serve between 46 and 57 months in prison, probably less time than he faced had he been convicted at trial. Simels said sentencing rules could permit Drogoul to go free much sooner because he already has spent 17 months in prison awaiting trial.

Simels said family pressures and rulings by the trial judge forced Drogoul to accept the plea offer. U.S. District Judge G. Ernest Tidwell, who took over the case from Shoob, ruled last week that Drogoul could not defend himself by asserting that his actions were part of a covert U.S. policy to assist Iraq.

The developments mark the second time Drogoul has admitted guilt in the case. Last summer, he pleaded guilty to 347 charges accusing him of masterminding the loan scheme without the knowledge of his superiors in Rome, and he could have been sentenced to life in prison.

Midway through a stormy sentencing hearing last September, he recanted his admission and testified that his superiors had approved the Iraqi loans.

Drogoul, who had been scheduled to go to trial next Wednesday, faces sentencing Nov. 29.

Advertisement
Los Angeles Times Articles
|
|
|