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
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
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
In total, the United States, other nations and the Bank for International
Settlements have transferred to Iraq assets worth an estimated 2.5 billion
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
"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."