1985-1989: BNL Officlal Begins Embezzling Funds to Iraq

Christopher Drogoul of the Atlanta branch of the Italian Banca Nazionale del Lavoro begins embezzling funds to Iraq. The funds consist of government backed loans meant for agricultural purposes as well as unreported loans that have been made in secret. While roughly half the funds will be used by Saddam Hussein’s government to purchase agricultural goods, the remainder will be used to “supply Iraqi missile, chemical, biological and nuclear weapons programs with industrial goods such as computer controlled machine tools, computers, scientific instruments, special alloy steel and aluminum, chemicals, and other industrial goods.” Additionally, the money spent on agriculture will allow Saddam Hussein’s regime to divert a significant portion of its own funds to the task of weapons development. [US Congress, 4/28/1992; Columbia Journalism Review, 3/1993] Between 1985 and 1989 roughly $5 billion makes its way to Iraq from the US. Internal government memos reveal that both the Federal Reserve and Department of Agriculture suspect that Iraq is using these funds inappropriately. Iraq eventually defaults on the government-backed loans, leaving US taxpayers with $2 billion dollars in unpaid debts. [Mother Jones, 1/1993; Columbia Journalism Review, 3/1993]