Saddam Hussein stashed away an estimated $3 billion of his personal wealth in Syrian government--controlled banks, as TIME recently reported. Now an additional cache of hidden funds is vexing Iraqi officials--and, if their irritation is any measure, the issue could put Iraq on a diplomatic collision course with its Arab neighbors.
Those funds come from kickbacks Saddam collected from the United Nations--run Oil for Food program, which allowed companies to sell essential commodities to Iraq in exchange for its oil while economic sanctions were in effect. Iraqi Health Ministry officials tell TIME that foreign medical suppliers who won the contracts had to pay a 10% tithe to the regime, generating hundreds of millions of dollars for Saddam. An estimated $88 million came from sales to the Health Ministry alone last year. TIME has obtained bookkeeping documents from the Ministry of Health finance office listing eight of the foreign accounts to which the funds were sent--six in Jordan and two in Lebanon--as well as an Iraqi Central Bank decree, issued in March, ordering that all such transactions be kept secret.
Although a U.N. resolution requires that Iraqi assets be returned to Iraq, neither Jordan, Syria nor Lebanon has fully complied. A coalition official says Amman hopes to use the money to help Jordanian firms that did business with Saddam recoup their losses, though a senior Jordanian banking official denies it. Damascus says it does not have any of the money but has allowed a team of U.S. and Iraqi experts into Syria to investigate Saddam's finances. Meanwhile, some of the accounts in Lebanese banks remain open. "We're trying to get [those] banks to give us information on the accounts, but they refuse," complains Dawud Hassan, director of the international division of Iraq's Rafidain Bank, which Saddam used for foreign transactions. Hassan says the Iraqi secret police--the only people Saddam trusted with the money--controlled the accounts, and he suspects the money could today be helping underwrite Iraq's Baathist resistance.
--By Beth Potter and Adam Zagorin