The search for Saddam's fortune: financial sleuths currently are trying to navigate Saddam Hussein's byzantine money trail. But finding his fortune and seizing it are two separate challenges

0 Comments | Insight on the News, May 13, 2003 | by Jamie Dettmer

Saddam's finances likely are as cleverly hidden as bin Laden's. A U.S. Treasury blacklist pays testimony to the likely far-flung nature of Saddam's financial empire; the list names individuals and companies in Britain, Jordan, Egypt and the United Arab Emirates. Rafidain Bank of Iraq, which is on the U.S. blacklist, has branches spread across the Middle East and may prove to be an important link in following Saddam's money trail. The bank is thought to have been a critical departure point for much of the regime's cash, and it transferred funds on Saddam's orders to banks worldwide.

In the 1980s, Saddam is known to have invested heavily in the West, including in the French company that owns Hachette, the publisher of Elle magazine and Car & Driver. Saddam's stake in Hachette is worth about $90 million but has been frozen since 1990.

After the Gulf War I, Saddam and his associates were much more careful about where they put their money, fearful that the accounts would be frozen. U.S. and Bank of England officials say that Saddam's money was moved frequently and that the bulk was kept in bank deposits and government bonds, including U.S. Treasuries. Other money, they say, was lodged in offshore front companies. That appears to dovetail with what the retired Swiss banker Borradori says. According to him, Saddam's money network is byzantine, involving a dizzying array of offshore companies. He himself knew of 47 bank accounts.

Court documents in Switzerland and Italy suggest that one of the main corporate entities used by Saddam was a company called Mediterranean Enterprises Development Projects, which is registered in Switzerland and has offices in New York City, Tokyo, London and Paris. It in turn controlled about 300 other companies, mainly in Liechtenstein and Panama. Three other key companies--Dumynta, Radistal and Technoservice International--are believed to have handled hundreds of millions of dollars for Saddam in the 1980s and probably remained conduits in the 1990s, too.

The challenge for the West's financial warriors won't stop at locating the cash. There likely will be a massive squabble over who can lay claim to any of Saddam's assets, with creditors ranging from France and Russia to South Korea's Hyundai Corp. all arguing that they deserve some of what is recovered. Iraq is believed to owe more than $100 billion on debts from the 1980s alone.

Then there is Kuwait, which likely will demand enforcement of reparations agreed to by Iraq in 1991.

And despite the gung-ho attitude of some neoconservative hawks in the Bush administration, there is international law and the laws of the individual countries where money is found to be taken into account as well. Under U.S. law, the president is allowed to seize assets of an enemy state, but courts in other countries aren't likely to freeze assets and accounts simply because they receive a request from Washington.

European authorities, even if they do want to help, are going to be bound by the laws in their countries that require such funds be linked to wrongdoing. Some U.S. officials argue that the United Nations could be useful here and hope that some procedure can be agreed to by the Security Council. U.S Treasury Counsel David Aufhauser maintains that "any assets accrued by Iraqis since 1990 are violations of U.N. sanctions" and as such are illicit and vulnerable to seizure. But that may not be the view of overseas courts. So even after the cash is found, it could be ensnared in legal systems across the world for years.