The United States is moving to freeze millions of dollars in accounts held by relatives of Saddam Hussein and other senior officials in his fallen regime, months after Washington seized billions of dollars in frozen Iraqi assets overseas.
The US Treasury Department in a statement Thursday urged other countries to follow suit and transfer the funds to the Development Fund for Iraq (DFI), authorized by the United Nations Security Council last May to safeguard Iraq’s oil revenues and other money earmarked for reconstruction.
But watchdog groups say the United States has no right to dispense with the funds as it pleases much of them going to US companies who have been awarded reconstruction contracts and that the money should be held until a legitimate, elected Iraqi government is in place.
“There has been an illegal regime change in Iraq,” said Rahul Mahajan of the group United for Peace and Justice.
“But since that has happened, until the Iraqi people have a chance to constitute their own legitimate government, they should have the right to put a hold on those funds and to call for some accounting for what previous heads of states and families have done.”
“Even if you (were to) grant them that it was in fact a legal occupation,” added Mahajan, “this certainly doesn’t give them the right to dispose of the Iraqi funds, not only the funds for members of Saddam Hussein’s family but also the Iraqi assets seized before,” he said.
Washington says it is worried the funds might be used to finance the Iraqi resistance.
Thursday’s announcement designated 191 “entities” whose funds, financial assets or economic resources will be frozen and later seized.
The list published includes 16 immediate family members of senior officials of the former Iraqi regime, including Sajida Khayrallah Tilfa, Hussein’s first wife, and her three daughters Raghad, Rana and Hala; his second wife Samira Shahbandar and his youngest son Ali.
Washington also plans to seize the assets of members of the family of Ali Izzat el-Duri, the former Iraqi vice-president, including assets and funds belonging to his four wives.
Among those on the list are a number of quasi-governmental companies that operated under the former regime, including Automobile State Enterprise, Central Petroleum Enterprise, Iraqi Oil Tankers Company, the Directorate General Of Contracts And Purchasing and the State Oil Marketing Organization.
Just before the March 2003 invasion of Iraq, US President George W. Bush ordered his government to identify, freeze and seize Iraqi assets worldwide.
“That mission has been and remains a top priority for the Department of the Treasury,” said Juan Zarate, treasury’s deputy assistant secretary for terrorist financing and financial crimes, on Thursday.
The seizure provoked an outcry from some humanitarian groups, who accused the U.S.-led Coalition Provisional Authority in Baghdad of not accounting for the seized money.
Treasury officials retorted that the funds had been handed over to the CPA for reconstruction projects, and soon after the authority published a skeleton budget of the DFI on its website.
Washington says it has since identified bank accounts and other assets held in over 20 countries, including Switzerland, France, Germany, Liechtenstein, Russia, Spain, Egypt, Thailand, Indonesia, Lebanon, Belarus, Iran, South Korea, Malaysia, Japan, Morocco, Saudi Arabia, UAE, British Virgin Islands, Jordan, Syria and Yemen.
The assets and the money include possessions in the countries that did business with Iraq, either legally or illegally, under the U.N. sanctions regime in place before March 2003. Known as “trading states,” these nations include Jordan, Lebanon, Syria and Turkey.
Zarate told a congressional hearing Thursday that Iraqi assets were “well concealed in the international financial system, behind a maze of front companies and straw men.”
“Saddam Hussein, his regime cronies and their immediate families cannot be allowed to get away with plundering the country of Iraq and hiding their ill-gotten gains in the international financial system,” he added.
Since Mar. 20, 2003, and under US pressure, nearly two billion dollars of Iraqi assets have been newly identified and frozen outside the United States and Iraq. Assets worth 751 million dollars have been transferred by 10 countries to the DFI.
In total, the United States, other nations and the Bank for International Settlements have transferred to Iraq assets worth an estimated 2.5 billion dollars.
Another 1.3 billion dollars in cash and valuables has been recovered in Iraq.
Washington has put enormous efforts into collecting Iraqi assets as calls have grown at home against the spiraling expense of the Iraq war and occupation, estimated at close to four billion dollars a month.
The Bush administration placed large financial investigation teams in Iraq on a long-term basis to obtain access to individuals who it says have knowledge of the flow and location of Iraqi funds. The teams work closely with the Federal Bureau of Investigation (FBI), the intelligence community and the Department of Defense.
“The hunt for Iraqi assets will be a long-term effort. It requires dogged investigation, including interrogations, witness interviews and document exploitation, as well as intensive diplomatic efforts worldwide and vigorous intelligence work,” Zarate said..
While Washington says it will hand over power to a still-unidentified Iraqi authority by Jun. 30, treasury officials said that as long as US military and civilian personnel are in the country and under threat from the resistance, it will continue to “attack the financial underpinnings of that insurgency.”