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AFTER THE WAR

Hussein Clan May Have a Billion Ways to Foment Unrest

May 07, 2003|Paul Richter and Warren Vieth | Times Staff Writers

WASHINGTON — The $1 billion that Saddam Hussein's family reportedly spirited from Iraq's Central Bank on the eve of war would be enough to underwrite a campaign of harassment against the country's new government for years, U.S. and Iraqi experts said Tuesday.

The money was allegedly withdrawn by the family March 18. U.S. Treasury officials in Iraq are now trying to determine whether that cash is the same as the neatly wrapped greenbacks recovered by American troops in various locations around central Iraq. Military personnel found $650 million in a palace, $100 million in an armored car and other bundles in cinder-block storage sheds.

But if it is not the same, $1 billion in the hands of Hussein's family and inner circle could help finance an effort to foment opposition in the hopes of destabilizing Iraq, experts say. Some former exiles and Iraqi opposition groups are concerned that Hussein's inner circle, and perhaps his family, are behind recent violence in Sunni Muslim areas of central Iraq.

"If he's alive and hiding someplace, this money could help," said Judith Kipper, a Middle East specialist at the Center for Strategic and International Studies in Washington.

A former governor of Iraq's Central Bank, Salah Al-Shaikhly, said in an interview Tuesday that he saw four possible uses for the cash: to help Hussein and his family "weather the storm" of a U.S. military offensive, to pay bribes and other costs to secure safe passage out of the country, to underwrite anti-U.S. terrorist activities or to "finance a comeback."

No matter what Hussein and his family intended, the loss of the money was huge, measured by the needs of the Iraqi people. Though one of the wealthiest countries in the region because of its oil reserves, Iraq has a gross domestic product of about $28 billion. The U.S. gross domestic product, by contrast, is about $10.5 trillion.

Al-Shaikhly, now an economist at St. John's College in Oxford, England, and a participant in the State Department's Future of Iraq project, said he believed the $1-billion withdrawal was the source of the piles of U.S. bills discovered around Baghdad.

One indication was that the money found by American troops had been professionally wrapped and packaged, most likely by bank personnel, he said. And it would have been virtually impossible to bring that much money into Iraq from another country, he added, noting that before the war, Turkish officials blocked an attempt by Hussein to move about $12 billion across the border.

A senior U.S. official said he knew of no evidence that trucks filled with cash had crossed the border into Syria, but he noted that U.S. officials have been concerned about the disappearance of Iraqi assets into Syria and that Secretary of State Colin L. Powell raised the issue with Syrian President Bashar Assad during their meeting in Damascus last weekend.

The disclosure of the withdrawal was first reported Tuesday by the New York Times.

U.S. officials said that while some details are still unclear, they believe that Hussein's son Qusai was part of the effort. Hussein ran the country as a fiefdom, and it probably would have been easy for family members or top aides to convince bank officials to give up the money, one U.S. official said.

Iraqis living nearby told CNN that they saw three or four trucks backed up to the bank at the time and that workers appeared to be loading cash into the trucks.

Al-Shaikhly said he was skeptical that the deposed leader intended to take all of the money out of the country in one bundle.

"Where are you going to put $1 billion in cash?" he said. "Where would you take it? It couldn't have left the country."

He said a single attache case can accommodate about $1 million in currency. It would take 1,000 cases to transport $1 billion.

Middle Eastern rulers have long had the habit of hiding cash and gold around their countries as a hedge against a coup or an outside attack. There has been regular speculation over the years about where Hussein, who built a huge network of underground tunnels and bunkers, might be hiding his wealth.

Before the war, a number of Iraq experts and U.S. intelligence analysts said Hussein might drop out of sight and try to wage an insurrection from hiding. Others have been skeptical, saying the former Iraqi leader does not have the temperament to wage a war in hiding, like Osama bin Laden, and does not have sufficient popular support among Iraqis to sustain a guerrilla war.

Judith Yaphe, an Iraq expert at the National Defense University in Washington, described the withdrawal as a "terrible loss when you consider how much need there was, and is, in Iraq."

She noted that while a circle of Iraqis around Hussein lived the life of the nouveaux riches -- their wealth obtained through illegal oil sales and other crimes -- the savings of the middle class disappeared in recent years, and the poor became entirely dependent on the state.

The senior U.S. official said that although the disappearance of the money was a crime against the Iraqi public, it was not a direct blow to the economy, since the currency was never in circulation.

"It was money in a mattress, I guess," he said.

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