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An Italian bank is suing the Iraqi government in Fulton County Superior Court in a bid to recover more than $1 billion the bank lent to Saddam Hussein’s regime 15 years ago. Those loans — which originated in the Atlanta office of Banca Nazionale del Lavoro — were at the center of an international scandal commonly referred to as “Iraqgate,” during which critics blamed the first Bush administration with arming Saddam’s government in the late 1980s. Two inquiries by Republican and Democratic-controlled Justice Departments cleared the Bush administration of any wrongdoing. But many continue to speculate over how Atlanta bank employees lent the Iraqis billions of dollars — some of which was backed by the U.S. government through two agricultural programs — without the knowledge of their superiors in Rome or any high-ranking American officials. The Justice Department accused the manager of the bank’s Atlanta office, Christopher Drogoul, of organizing illicit loans and thereby defrauding the bank and the U.S. government. Some 18 months after FBI agents raided the bank’s Atlanta offices, a federal grand jury in 1991 indicted Drogoul, along with some of his subordinates, a government-owned Iraqi bank and five Iraqi officials. The indictment said the local officers of Banca Nazionale del Lavoro, or BNL, received lavish gifts and bribes to extend more than $4 billion in unauthorized credit to Iraq. Drogoul subsequently pleaded guilty in 1993 to two counts of lying to the Federal Reserve Board and one count of mail fraud. Judge G. Ernest Tidwell of the Northern District of Georgia sentenced the bank manager to 37 months in prison. The eight-page complaint filed Thursday by BNL names as defendants the Ministry of Trade of the Republic of Iraq, the Ministry of Industry of the Republic of Iraq and the Central Bank of Iraq. The lead attorney representing the bank is Walter W. Driver Jr., chairman of King & Spalding. In an e-mail to the Daily Report, he said the timing of the suit has nothing to do with any recent events in Iraq. “The bank has regularly demanded payment from the Iraqis but circumstances, obviously, have impeded their ability to repay,” Driver wrote. The suit states that from February 1988 through April 1989, BNL’s Atlanta office entered into four medium-term loan agreements with the Iraqis, resulting in the issuance of about $2.15 billion in credit. The agreements were attached as an exhibit to the complaint. The Iraqis drew against the loan agreements, ultimately borrowing about $1.38 billion. As of June 30, 2005, the Iraqis owe that principal amount, “plus interest in an amount to be established at trial,” according to the suit. The Italian bank, which no longer has an Atlanta office, also is seeking to recover attorney fees and litigation expenses. Banca Nazionale del Lavoro v. Ministry of Trade of the Republic of Iraq, No. 2005CV104420 (Fult. Super. filed Aug. 4, 2005). The complaint says the Iraqi agencies agreed that service of process may be made on any Iraqi Airways office. The airline recently resumed international flights, according to news reports. Driver did not want to say how he would serve the complaint. He told the Daily Report it was “not appropriate” to disclose how the Iraqis would receive a copy of the suit. Officials at the Iraqi embassy in Washington could not be reached to respond to the suit. Driver said he did not know who was representing the Iraqi government. Driver said he has represented BNL in all of its American cases since 1989. According to the King & Spalding Web site, he led the bank through congressional committee investigations and hearings, as well as multiple civil litigation cases. He also successfully resolved a protracted Federal Reserve inquiry, according to the K&S site. Driver also helped BNL recover $400 million from the U.S. government in litigation arising out of the loans to Iraq. Senior Judge Marvin H. Shoob of the U.S. District Court for the Northern District of Georgia oversaw a portion of the Justice Department’s prosecution of Drogoul. Shoob said Friday he believed the local bank officials were “small potatoes” in a larger conspiracy. “They were pawns,” Shoob said.

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