|
Banca Nazionale Del Lavoro: Kissinger Associates, BNL and Iraq
NOTICE: TO ALL CONCERNED Certain text files and messages contained on this site deal with activities and devices which would be in violation of various Federal, State, and local laws if actually carried out or constructed. The webmasters of this site do not advocate the breaking of any law. Our text files and message bases are for informational purposes only. We recommend that you contact your local law enforcement officials before undertaking any project based upon any information obtained from this or any other web site. We do not guarantee that any of the information contained on this system is correct, workable, or factual. We are not responsible for, nor do we assume any liability for, damages resulting from the use of any information on this site.
KISSINGER ASSOCIATES, BNL AND IRAQ
More on Kissinger and BNL
BNL actually a client of Kissinger Associates
Letter to President Bush
Scowcroft stock ownership
Many large defence contractors
Background on National Security Council
NSC influence over export licensing for Iraq
Scowcroft and EXIMBANK military sales
Conclusion
Financial Times, 26 Apr 1991
Stock Holdings of Brent Scowcroft
The SPEAKER pro tempore. Under a previous order of the House,
the gentleman from Texas [Mr. GONZALEZ] is recognized for 60
minutes. Mr. GONZALEZ. Mr. Speaker, during a special order last
week, I revealed that Henry Kissinger was a paid member of the
Banca Nazionale del Lavoro Consulting Board for International
Policy. Mr. Kissinger held this position during the height of the
biggest banking scandal in United States history-$4 billion in
unreported loans to Iraq by the Atlanta branch of BNL. This week I
will reveal some new information regarding Mr. Kissinger and his
relationship with BNL. I will also include in the RECORD a
detailed list of Mr. Brent Scowcroft's stock holdings.
MORE ON KISSINGER AND BNL
In order to learn more about Mr. Kissinger's role at BNL,
committee investigators contacted an attorney representing BNL in
the United States and asked him to contact BNL in Rome. The
BNL employee in Rome told BNL's attorney the following:
Mr. Kissinger has been a member of the BNL International
Advisory Board since 1985. Mr. Kissinger is paid $10,000 for
appearing at an Advisory Board meeting and he is paid extra for
speaking at BNL functions. It is important to bring these facts out
because BNL is owned by the Italian government. In effect, Mr.
Kissinger's fees are indirectly paid for with Italian taxpayer money.
Banking Committee investigators were also told that Mr. Kissinger
may still be a member of BNL Advisory Board. His term does not
expire until next month. This information conflicts with what Mr.
Kissinger was quoted as stating in a Financial Times article on
April 26. In that article Mr. Kissinger stated that he resigned from
BNL's advisory board on February 22, 1991. I will write BNL and
Mr. Kissinger in order to clear up this discrepancy.
Mr. Kissinger went on to state in the same Financial Times article:
I resigned earlier this year because I don't want to be connected, I
don't want to be asked about this sort of thing.
But it should be noted that Mr. Kissinger supposedly did not resign
his BNL post until over 18 months after the BNL scandal became
public in August 1989.
Another interesting point to note is the timing of Mr. Kissinger's
supposed resignation from BNL on February 22, 1991. That date is
just days before the Justice Department announced a 347 count
indictment against the former employees of BNL after an
exhaustive 18-month investigation. This is quite a coincidence.
BNL ACTUALLY A CLIENT OF KISSINGER ASSOCIATES
BNL was actually a client of Kissinger Associates at the same time
BNL's former employees in Atlanta were providing Iraq with
billions in unreported loans. This solidifies Mr. Kissinger's link to
BNL and raises the question of whether Mr. Kissinger had
knowledge of the BNL loans to Iraq.
As I stated last week, many Kissinger Associates clients were doing
business with the Iraqis as a direct result of the unreported $4
billion in BNL loans to Iraq. Volvo, whose chairman serves on the
Kissinger Associates board of directors, was doing big business in
Iraq and it was the beneficiary of BNL loans.
BNL was also the largest participant in the $5.5 billion CCC
program for Iraq. Between $800 and $900 million in BNL loans to
Iraq were guaranteed by the CCC. BNL was also the second largest
participant in the Export-Import [Eximbank] program for Iraq. Over
$50 million in BNL loans to Iraq were guaranteed by Eximbank.
Through these programs it became common knowledge in the
export community that BNL was Iraq's prime banker in the United
States.
I also reported last week that Mr. Lawrence Eagleburger had ties to
BNL. While he was serving as president of Kissinger Associates,
Eagleburger was a board member of a Yugoslavian bank that had a
substantial and even incestuous relationship with BNL. BNL was a
main factor in the growth of that Yugoslavian bank's operations in
the United States.
Despite the many linkages between Kissinger Associates and BNL,
Mr. Kissinger still maintains that he had no knowledge of the $4
billion in BNL loans to Iraq.
The fact that BNL was a client of Kissinger Associates also
solidifies the link between BNL and two very high ranking Bush
administration employees, NSC Director Brent Scowcroft and
Deputy Secretary of State Lawrence Eagleburger. Mr. Lawrence
Eagleburger and Mr. Brent Scowcroft were both high ranking
employees of Kissinger Associates during the period BNL was a
client of Kissinger Associates. In other words, part of their
paychecks was derived from fees paid by BNL.
The fact that BNL was a client of Kissinger Associates also raises
the question of how Mr. Eagleburger and Mr. Scowcroft reacted to
the BNL scandal once it became known to them in the fall of 1989.
I wonder if either thought it necessary to recuse himself from
making decisions on Iraq once the BNL scandal was uncovered?
COMMITTEE ON BANKING,
FINANACE AND URBAN AFFAIRS,
Washington, DC, May 2,1991.
Hon. GEORGE BUSH,
President of the United States,
Washington, DC
DEAR MR. PRESIDENT: The House Banking Committee is conducting an
investigation into over $4 billion in unreported loans the former employees
of the Atlanta branch of Banca Nazionale del Lavoro (BNL) provided to the
government of Iraq between 1985 and 1990. The Committee's investigation has
uncovered the fact that Henry Kissinger was on the International Advisory
Board of BNL during that same time period and that BNL was a client of
Kissinger Associates.
As you are aware, Mr. Brent Scowcroft and Mr. Lawrence Eagleburger were high
ranking officials of Kissinger Associates-Mr. Scowcroft as Vice Chairman and
Mr. Eagleburger as President. Kissinger Associates represents many large
multinational companies involved in various aspects of international trade,
including the arms business. Since these firms sell their wares worldwide,
they often are the beneficiaries of U.S. policy towards foreign countries.
I am deeply concerned over the potential influence Mr. Kissinger may exert
over the decisions and actions of Mr. Scowcroft and Mr. Eagleburger, and am
especially troubled by a potential conflict of interest involving Mr.
Scowcroft. The NationaI Security Advisor is in a position to strongly
influence our national security and foreign policies, including the U.S.
export licensing process. These policies often have a direct influence on
individual corporations doing business abroad. Until October
4,1990, Mr. Scowcroft owned stock in approximately 40 U.S. corporations.
many of which were doing busies in Iraq. Those companies received more than
one out of every eight U.S. export licenses for exports to Iraq. Several of
the companies were also clients of Kissinger Associates while Mr.
Scowcroft was Vice Chairman of that firm.
Mr. Scowcroft's stock holding, particularly in corporations that are
clients of Kissinger Associates, present the potential for serious
conflicts of interest and cause one to question whether or not his
decisions as National Security Advisor are completely
disassociated from the interests of his former boss and longtime colleague.
Mr. Eagleburger, the current Deputy Secretary of State, as well as
Mr. Scowcroft, may also be involved in a conflict of interest related to
their role in promoting military sales abroad. The Legal Times recently
reported that Mr. Eagleburger and Mr. Scowcroft (a lifelong Air Force
Officer) are strong advocates of using $1 billion in Export-Import Bank
resources to finance the sale of U.S. military articles overseas. The Legal
Times also reported that Mr. Eagleburger actually sent a classfied
memorandum to all U.S. Embassies urging that U.S. defense firms be given more
help selling weapons abroad. Many corporations, including Mr. Eagleburger's
past employer, the ITT Corporation, stand to benefit if the U.S. foreign
service is forced to take a greater role in selling U.S. military
articles abroad. For your information, I have attached a copy of the Legal
Times article referring to Mr. Eagleburger's and Mr. Scowcroft's roles in
expanding military sales abroad. I am concerned that their attempts
to use the foreign service and the Export-Import Bank to assist
corporations in financing military sales abroad may have been prejudiced by
their past associations.
Mr. Scowcroft's and Mr. Eagleburger's actions seem out of step at a
time when the U.S. should be leading a worldwide effort to limit arms
proliferation. The positions held by these men are of the utmost
importance to the national security of the United States. Persons
filling such important positions must be independent from past
associations which could cloud their judgement.
I trust you will consider the issues I have raised in this letter and, if
necessary, take appropriate action to ensure that potential conflicts
are eliminated.
Thank you for your time and consideration. With best wishes.
Sincerely,
HENRY B. GONZALEZ
Chairman
SCOWCROFT STOCK OWNERSHIP
The BNL scandal is not the only instance of Kissinger Associates
affiliations having had the potential of placing Mr. Scowcroft in a
potential conflict of interest situation involving U.S. national
security and foreign policy.
Last week I noted that Brent Scowcroft joined Mr. Kissinger in
setting up Kissinger Associates in 1982. Mr. Scowcroft served as
vice chairman of Kissinger Associates until being appointed as
National Security Advisor to President Bush in January 1989. In
that position, Mr. Scowcroft advises the President on matters
involving national security including export control policies.
I also revealed last week that Mr. Scowcroft owned stock in
approximately 40 companies while acting in those capacities for
President Bush.
These stocks were valued at well over $1 million.
The chart is pretty much self-explanatory. As the chart indicates, on
October 4,1990, the Office of Government Ethics required Mr.
Scowcroft to divest some of his stock holdings. But that was almost
2 years after he took office and several months after the Iraqi
invasion of Kuwait.
MANY LARGE DEFENSE CONTRACTORS
Many of the companies Mr. Scowcroft owned stock in are large
defense contractors. The Department of Defense recently released a
list of the top 100 prime defense contractors. Mr. Scowcroft owned
stock in 11 of these companies including General Electric, General
Motors, ITT, and Lockheed while acting as the President's National
Security Adviser.
Several of the companies Mr. Scowcroft owned stock in are
reported clients of Kissinger Associates. These connections raise
the question of Kissinger Associates' influence over the decisions
of Mr. Scowcroft as well as the issue of whether or not Mr.
Scowcroft can remain independent from the interests of his former
boss and longtime colleague Henry Kissinger.
I am deeply concerned by Mr. Scowcroft's stockholdings,
particularly those in corporations that are clients of Kissinger
Associates. Given the position of Mr. Scowcroft, his stockholdings
present the potential for serious conflicts of interest.
As an example consider that together, the companies he owned
stock in received over one in every eight United States export
licenses for sales to Iraq. No doubt these companies benefited from
United States policy toward Iraq. Mr. Scowcroft was instrumental
in setting and carrying out that policy and, at the same time owned
stock in companies benefiting directly from that same policy. Can
Mr. Scowcroft be providing the President with independent
judgement given those circumstances?
BACKGROUND ON NATIONAL SECURITY COUNCIL [NSC]
In order to better understand these issues it would help to learn
more about the role Mr. Scowcroft plays in setting, coordinating,
and carrying out the national security and foreign policies of the
United States. As we will see, the NSC can have considerable
influence over an individual company's ability to obtain an export
license to sell goods abroad.
During his tenure at Kissinger Associates, Mr. Scowcroft was
appointed by President Reagan to various special commissions on
national security issues. One such appointment was to the
President's Special Review Board. The President directed the
Board to examine the proper role of the National Security Council
staff in the development, coordination, and conduct of foreign and
national security policy following the Iran-Contra scandal. The
following background on the NSC is taken from that report.
The National Security Council was established by the National
Security Act of 1947. The NSC functions as an advisory body to
the President on national security issues and to improve
coordination between the military service and other executive
departments. The President is the head of the NSC with other
members being the Vice President, the Secretary of State, and the
Secretary of Defense.
Statutory advisers to the NSC include the Chairman of the Joint
Chiefs of Staff, the Director of the Central Intelligence Agency,
and the Director of the Arms Control and Disarmament Agency.
Other members of executive branch agencies may serve as de facto
members of the NSC at the invitation of the President. All members
are supposed to provide their best advice to the President, not
merely serve as advocates for their own bureaucracies.
Perhaps the greatest misconception regarding the NSC is that the
Assistant to the President for National Security Affairs, commonly
referred to as the National Security Adviser, is not a formal member
of the NSC. There is no legislative provision for Mr. Scowcroft's
present position.
Originally, under President Eisenhower, the National Security
Adviser served as the executive secretary of the NSC-setting the
agenda, briefing the President, and supervising staff. It was not
until President Kennedy, with McGeorge Bundy, and also
President Nixon, with Henry Kissinger, that the National Security
Adviser took on its current role. Bundy and Kissinger transformed
the position from one of coordinator and administrator to one of
policy advocate, personal adviser, spokesman and negotiator for
national security issues.
The National Security Act also established a National Security
Staff. The role and size of the staff has changed considerably since
1947, but has come to serve the dual role of coordinating and
monitoring the implementation of national security policy as well
as providing independent advice, options, and ideas to the
President. Mr. Scowcroft is the current Director of the NSC staff.
The role of the NSC staff received its greatest notoriety from the
actions of felonious staff member Oliver North.
NSC INFLUENCE OVER EXPORT LICENSING FOR IRAQ
One of the responsibilities of the NSC is to ensure that the national
security decision directives issued by the President are properly
carried out. Take for example the case of Iraq. Both Presidents
Bush and Reagan were determined to improve relations with Iraq,
and both considered the best way to achieve that goal was to
expand trade with Iraq. Since trade was the foundation on which
improved relations were to be achieved, increased importance was
placed on the export licensing process.
The export licensing process controls the export of U.S. goods and
technical data in order to achieve certain national security and
foreign policy goals. For example. in order to protect our national
security, the export licensing process is used to limit the export of
sophisticated United States computer technology to the Soviet
Union that could be used to improve weapons systems. In the case
of export licensing, the National Security Act of 1947 and
subsequent legislation, provide the President, through the National
Security Council [NSC], with ample authority to establish policies
on export controls.
To get a feel for the NSC's role in achieving the President's
objective regarding Iraq, we can look to the comments of Paul
Freedenberg. He was the chief export licensing official at the
Commerce Department during the latter half of the Reagan years
and the beginning of the Bush administration.
Mr. Freedenberg recently testified that Iraqi use of poison gas
against the Kurds, as well as the Iranians, did not suppress the zeal
of the NSC to approve technology transfers to Iraq. In testimony
before Congress he stated:
In the summer of 1988, a number of licenses were pending with
regard to technology transfer to Iraq. I asked for official guidance
with regard to what the licensing policy would be towards Iraq
since by that time there was credible evidence of the use of poison
gas by the Iraqis against their own people and also against the
Iranians. I suggested that the imposition of foreign policy controls
be considered as a way of justifying the denial of export licenses to
Iraq. I was told by the National Security Council that the licensing
policy with regard to Iraq was that of normal trade and that under
normal circumstances and that I should clear the licenses that were
pending. I passed that information on to my licensing officers and
the few dozen licenses that were pending at that time were
approved and licenses were issued for exports to Iraq.
This provides clear insight into the power of the NSC and points to
the influence it can have over the export licensing process. Yet
another example is provided by Dr. Stephen D. Bryen, former
Deputy Under Secretary of Defense for Trade Security Policy and
Director of Trade Technology Security Administration [DTSA].
DTSA helps review export licenses to determine if exports should
be denied because of their potential military applications.
While testifying before the Banking Committee, Dr. Bryen stated:
Generally speaking, the Defense Department s strongest objections
for Iraq concerned the potential use of exported goods for Iraq's
nuclear program, for missile testing and construction, and for
chemical and biological weapons development. In most cases when
we raised these issues we ran into strong opposition from the State
and Commerce Departments. In July 1987, at the urging of the
State Department, the National Security Council directed DTSA to
be more forthcoming with respect to Iraq. The NSC singled out a
number of cases DTSA held up, and urged us to revisit them. We
decided, in all but two or three cases identified by NSC to stick by
our guns and not give in because we had evidence the technology
was going into strategic military programs.
While Mr. Scowcroft was not the NSC Director at the time of the
above incidents, you can get a feel for the enormous lnfluence the
NSC can exercise over individual export licensing decisions.
The NSC provides crucial input into the President's foreign policy
and national security decisions. These decisions often affect trade
between the United States and foreign nations, which in turn
affects a corporation's ability to sell its goods overseas. As the Iraq
example illustrates, the NSC can exercise considerable sway over
export licensing decisions the directly determine whether or not a
corporation's export license is approved. This is one of the prime
reason Mr. Scowcroft's stock ownership presents the potential for a
conflict of interest.
Mr. Scowcroft's past affiliation with Kissinger Associates also
raises the question as to whether or not Mr. Scowcroft can truly
provide independent advice to the President in matters of national
security or foreign policy when those policies can run against the
interest of corporations that he owns stock in or that are affiliated
with Kissinger Associates.
SCOWCROFT AND EXIMBANK MILITARY SALES
Last week I placed in the RECORD a Legal Times article that
illustrated how Mr. Scowcroft and Mr. Lawrence Eagleburger have
been instrumental in formulating the recent administration proposal
to use $1 billion in Export-Import Bank credits to sell defense
articles overseas. This week I revealed that Mr. Scowcroft until very
recently owned stock in many of our largest defense contractors.
The fact that Mr. Scowcroft was even involved in a decision to
promote military sales while he owned stock in several huge
defense contractors strikes me as being a conflict of interest.
The President's proposal to use the Export-Import Bank to finance
military sales is an example of a policy decision that has the
potential to directly benefit corporations Mr. Scowcroft owns stock
in or that are affiliated with Kissinger Associates.
CONCLUSION
To summarize, I am deeply concerned that Mr. Scowcroft's
stockholdings, particularly in corporations that are clients of
Kissinger Associates, present the potential for serious conflicts of
interest. These stock-holdings also raise the question of Kissinger
Associates influence over the decisions of Mr. Scowcroft and
whether or not Mr. Scowcroft can remain independent from the
interests of his former boss and longtime colleague. I will be
writing President Bush to express my concern over these issues.
[From the Financial Times, Apr. 26,1991]
CONGRESSIONAL INQUIRY: KISSINGER'S FIRM LINKED TO BNL
(By Alan Friedman and Lionel Barber)
WASHINGTON.-Mr. Henry Kissinger, the former US secretary of
state who heads the international consulting firm Kissinger
Associates, had business links with Banca Nazionale del Lavoro
(BNL), the Italian bank whose branch in Atlanta, Georgia made
$4bn In unauthorized loans to Iraq, according to the chairman of
the US House banking committee.
BNL's activities in the US are at the center of a wideranging
congressional inquiry into how US funds were used to buy
militarily useful US technology and equipment until as late as June
1990, a few weeks before the invasion of Kuwait.
Mr. Kissinger last night denied knowledge of the improper Iraqi
loans. He confirmed, however, that he served until early this year as
a paid member of BNL's International advisory board.
He resigned the BNL position on February 22, 1991 because of the
BNL Atlanta scandal. Mr. Kissinger said last night: "I didn't have
any idea of what BNL was doing In Iraq. All I know was what I
read in the papers. I resigned earlier this year because I don't want
to be connected, I don't want to be asked about this sort of
question".
Congressman Henry Gonzalez, the Texan Democrat who is
investigating the BNL affair, also claimed that Kissinger Associates
advised US companies exporting to Iraq, several of which were
BNL financed.
Kissinger Associates is an international consultancy with blue-chip
clients, advising on political and commercial risk. Among its early
recruits were Mr. Brent Scowcroft, currently President George
Bush's national security adviser, as well as Mr. Lawrence
Eagleburger, a veteran diplomat, who currently serves as deputy US
secretary of state. Both resigned on taking office.
In a lengthy statement on the floor of the House of Representatives,
Mr. Henry Gonzalez, chairman of the banking committee described
how Mr. Alan Stoga. a Kissinger Associates executive, met Mr.
Saddam Hussein in Baghdad in June 1989.
At the meeting, Mr. Saddam apparently expressed interest in
expanding commercial relations with the US. "Many Kissinger
Associates clients received US export licenses for exports to Iraq.
Several were also the beneficiaries of BNL loans to Iraq," said Mr.
Gonzalez.
In response, Mr. Kissinger said his firm "derived no Income from
Iraq". To his knowledge, Mr. Stoga did not advise Iraq on any
financial matters, but he recalled that Mr. Stoga told him that he
was identified at the Saddam meeting "as an expert on debt and
could advise."
Mr. Kissinger, who has rarely spoken about his clients or his
business, said his firm would not have interceded with the US
government to secure export licenses for clients, but that "it is
possible that somebody may have advised a client on how to get a
license."
In his congressional statement Mr. Gonzalez said Mr. Eagleburger,
who worked for Kissinger Associates until two years ago, served on
the board of Ljubljanksa Bank (LBS), the Yugoslav bank.
Mr. Gonzalez said he wished to make clear that he was not
accusing anyone of any illegalities.
Stock Holdings of National Security Director Brent Scowcroft
Stocks Value of stock(3)
Advanced Display Technology.................................B
Allegran, Inc. .............................................B
Allied Signal, Inc. (1).....................................B
ARMCO, Inc. ................................................C
AT&T (1) (2)................................................D
Bank America Corp. (1)......................................C
CSX Corp. ..................................................A
DBA Systems, Inc. (1).......................................F
E.I. Dupont (1).............................................D
First Security Corp. .......................................D
General Motors Corp. (1)....................................B
General Electric Co. (1)....................................G
Great Atl.& Pac. Tea Co. ...................................B
Great Amerlcan Communications...............................B
Halliburton Company.........................................C
Hanson PLC Sponsored ADR....................................E
Hewlett Packard Co. (1).....................................D
IBM (1) (2).................................................D
Intergraph Corp. (1)........................................E
International Paper Company.................................B
ITT Corp. (1) (2)...........................................B
Kimberly Clark (1)..........................................B
Lehman Corp.................................................D
Lockheed Corp...............................................A
McKesson, Inc...............................................B
MCN Corp....................................................B
Merck & Co. (1).............................................D
Minnesota MNG MFG (1) (2)...................................B
Mobil Oil Company (1).......................................B
Monsanto Company............................................C
PacificCorp.................................................C
Phillips Petroleum Co.......................................B
Pfizer, Inc. (1)............................................D
Primark Corp................................................B
Questar Corp................................................C
Reynolds Metals (2).........................................B
Storage Technology CP (1)...................................C
Shell TRNS & TR (1) (2).....................................D
SmithKline Beackman Corp. (2)...............................A
Weyerhaeuser Co. (1)........................................D
Westinghouse Electric (1)...................................D
Wicor, Inc..................................................B
Xerox Corp. (1).............................................D
Washington BanCorp..........................................F
Notes:
(1) On October 4, 1990, the Office of Government Ethics
required divestiture of these stocks.
(2) Held by Spouse
(3) Value of Holding:
A= under $1,001
B=$1,001-5,000
C=$5,001-15,000
D=$15,001-50,000
E=$50,001-100,000
F=$100,001-250,000
G=over $250,000.
Source: Brent Scowcroft Financial Disclose Report
Office of Government Ethics (202) 523-5757.
|
|
