69 lines
12 KiB
Markdown
69 lines
12 KiB
Markdown
---
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aliases:
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- Christopher P. Drogoul
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category: "Business & Finance"
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tags:
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- Person
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- ChristopherDrogoul
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- BNL
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- Iraqgate
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- Banking
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- Atlanta
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- KissingerAssociates
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summary: "Manager of the Atlanta branch of Banca Nazionale del Lavoro who extended billions of dollars in unreported credit to Iraq; Judge Shoob recorded his plea testimony that his superiors should have known of it."
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location: "Atlanta, Georgia"
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created: 2026-09-21
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updated: 2026-09-21
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relations:
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- type: employed_by
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with: "[[Banca Nazionale del Lavoro]]"
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role: "manager of the Atlanta branch"
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start: 1985
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end: 1989
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fn: 2
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---
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Christopher P. Drogoul managed the [[Atlanta]] branch of the Italian state-owned [[Banca Nazionale del Lavoro]], which between 1985 and 1989 extended more than four billion dollars in unreported loans and credits to [[Iraq]], a portion of them backed by the [[Commodity Credit Corporation]] of the [[United States Department of Agriculture|Department of Agriculture]]. FBI agents raided the branch on August 4, 1989 and seized its records.[^1] Drogoul was indicted on February 28, 1991, the day after President [[George H.W. Bush]] ordered the ceasefire in the [[Gulf War]]. He pleaded guilty, withdrew the plea, pleaded guilty again to three counts, and was sentenced in December 1993 to 37 months. A Central Intelligence Agency memorandum of November 6, 1989 put the branch's unauthorized letters of credit for Iraq at $3.2 billion in 2,500 letters between February 1988 and July 1989.[^2] The government's position throughout was that he acted without the knowledge of the bank's headquarters. The first judge assigned to the case concluded otherwise.[^3][^4][^5]
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### The Indictment
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The indictment, No. 1:91-CR-078 in the [[United States District Court for the Northern District of Georgia|Northern District of Georgia]], charged Drogoul on 347 counts together with two branch officers, [[Therese Barden]] and [[Amedeo DeCarolis]]; the [[New York City|New York]] trading company [[Entrade International]] and its manager, [[Yavuz Tezeller]]; the Iraqi state [[Rafidain Bank]]; and four Iraqi officials, among them [[Safa al-Habobi]], who ran Iraq's front companies in [[London]]. The government's list of unindicted co-conspirators, filed by Assistant U.S. Attorney [[Gale McKenzie]] on September 12, 1991, named an employee of the [[Central Bank of Iraq]] and [[Amir al-Saadi]] of the [[Ministry of Industry and Military Industrialization]]. [[United States Attorney General|Attorney General]] [[Richard Thornburgh]] said the defendants had been able "to silently pick the pockets of a major Italian bank of more than $4 billion in loans and credits, almost by the push of a button."[^3][^6]
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Tezeller left for [[Turkey]] after the raid and did not return. A [[Department of Justice|Justice Department]] letter of January 9, 1990, said he could "provide information regarding after sales services (a fancy word for bribes, kickbacks), unearned consulting fees, and other payments to Iraqis as well as kickbacks paid by [[United States]] and multinational companies to obtain Iraqi contracts." Entrade was an affiliate of the Turkish conglomerate [[Enka]] and had handled 52 guaranteed transactions for Iraq. An Agriculture Department inquiry found no evidence that the commodities in those transactions reached Iraq. Representative [[Henry Gonzalez]], chairman of the [[House Committee on Banking, Finance and Urban Affairs|House Banking Committee]], said on the House floor that the [[State Department]] had kept the Atlanta investigators from traveling to Turkey to question Tezeller, and that the Justice Department had discouraged the indictment of the Central Bank of Iraq and of [[Wafai Dajani]], a Jordanian businessman close to King [[Hussein of Jordan|Hussein]], on grounds of foreign policy.[^7]
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[[Joseph D. Whitley]] became acting United States attorney in Atlanta on June 1, 1990, and recused himself from the case the same day because his former law firm had represented [[Matrix Churchill]], the Iraqi-owned machine tool company that the branch had financed.[^8]
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### Shoob
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Drogoul pleaded guilty to 60 counts in June 1992. At the sentencing hearing before Judge [[Marvin Shoob]] he testified that the branch had been "a tool of the U.S. and Italian governments" and that "one has to consider it a foreign policy matter and not a banking matter." On September 14, 1992, Gonzalez announced that the [[Central Intelligence Agency|CIA]] had told his committee it had good evidence that officials of the bank in [[Rome]] knew of the Atlanta lending, which contradicted what the agency's general counsel had told the prosecutors. On October 1 Shoob allowed Drogoul to withdraw the plea and removed himself from the case, stating his conclusion "that officials at BNL-Rome were aware of and approved Mr. Drogoul's activities." The written order of October 5 records that Drogoul "testified only that his superiors should have known."[^3][^4][^9][^10]
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Attorney General [[William Barr]] declined to seek an independent counsel under the statute and on October 16, 1992, appointed a retired federal judge, [[Frederick Lacey]], as "independent counsel" under Justice Department regulations. Lacey's report states that on October 27 Barr authorized a preliminary investigation and asked for a report by December 8, 1992; the Senate staff record that Lacey submitted it on December 9.[^1] "I find Judge Shoob's specific charges against the USAO, and his concern about the interference of other agencies, to be inaccurate," he wrote. Of the national security adviser and the deputy secretary of state, both formerly of [[Kissinger Associates]], he wrote: "It is clear that, while at Kissinger Associates, Scowcroft and Eagleburger came into contact with BNL management. I have seen nothing, however, to suggest that they knew of BNL-Atlanta's wrongful loans to Iraq or influenced the prosecution of this matter." The second part of his report was classified top secret. Gonzalez called it "the Lacey Job" and said: "At best Lacey's probe was a whitewash." In December 1992 prosecutors in [[Venice]] indicted 59 people, including executives of the bank, for financing arms sales to [[Iran]].[^8][^9]
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In written answers submitted to the House committee, Drogoul stated that his attorney, [[Robert M. Simels]], had been in contact with [[Ross Perot]], that Perot told Simels he thought Drogoul's pretrial detention was "un-American" and that if bail were set he was prepared to aid in his release, and that although bail was set after these discussions, Perot offered no assistance.[^11]
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The staff of the [[Senate Select Committee on Intelligence]] reported in February 1993 that the intelligence agencies and the Justice Department had coordinated poorly and that the CIA's reasoning for withholding its reports from the prosecutors had "no legal support." It did not find that information had been concealed to protect senior officials.[^12]
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### The Italian Witnesses
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Drogoul's lawyer, [[Bobby Lee Cook]], named three officials in Rome, [[Giacomo Pedde]], [[Teodoro Monaco]], and [[Angelo Florio]], as the men who had authorized the loans. The government sought to depose thirteen Italian bank officers in Rome. Seven, including Pedde, Florio, and [[Nerio Nesi]], refused to testify in the United States.[^13] The defense told the court of appeals that "the testimony of these thirteen witnesses lies at the very core of the charges in the indictment, and its refutation the heart of the defense." The [[United States Court of Appeals for the Eleventh Circuit|Eleventh Circuit]] ordered the depositions on September 2, 1993, six days before the trial date. Drogoul then pleaded guilty to one count of wire fraud and two of making false statements to the Federal Reserve. A Justice Department review filed with the court on August 23 had found that six employees in Atlanta were responsible and that neither Rome nor Washington knew. "The evidence never gets on the books," Gonzalez said, "and the public will never know for certain what the Bush administration did for [[Saddam Hussein]] before the war."[^3][^4]
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### Testimony on Kissinger Associates
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Drogoul testified under oath to the [[House Banking Committee]] on November 9, 1993, with five other former employees of the bank. He said he learned at a business meeting in [[Italy]] in 1987 that [[Henry A. Kissinger|Henry Kissinger]] sat on the bank's international advisory board. "As we became involved in the medium-term lending," he said, "it became clear to us that the people at Kissinger and Associates were somehow assisting clients of Iraq in further developing business." He added: "By the time we moved into the 1988 period or early 1989 period, it was fairly clear to me that Kissinger and Associates' people were involved in some way in trying to enhance and develop a relationship between Iraq and the United States. I really shouldn't go farther than that, because the rest is probably speculation."[^14]
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### Footnotes
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[^1]: Senate Select Committee on Intelligence, *The Intelligence Community's Involvement in the Banca Nazionale del Lavoro (BNL) Affair,* Committee Print S. Prt. 103-12, February 1993, pp. 4-5, 10; Lacey, Report of the Independent Counsel, Serial No. 103-95, pp. 344-345. https://www.intelligence.senate.gov/sites/default/files/publications/10312.pdf
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[^2]: Central Intelligence Agency, Directorate of Intelligence, "Iraq-Italy: Repercussions of the BNL-Atlanta Scandal," November 6, 1989, printed in Serial No. 103-95, pp. 194-195 (the branch's letters of credit and its debt limits). https://archive.org/details/testimonyofforme1994unit
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[^3]: "Drogoul gets 37 months in BNL bank scandal," *United Press International,* December 9, 1993; "Was Banker Just Fall Guy in Loans to Iraq?" *Deseret News,* December 5, 1993.
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[^4]: United States v. Drogoul, 1 F.3d 1546 (11th Cir. 1993).
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[^5]: Gonzalez, Henry B. "Kissinger Associates, Scowcroft, Eagleburger, Stoga, Iraq, and BNL," *Congressional Record,* House, April 28, 1992, pp. H2694-H2701. https://www.globalsecurity.org/military/library/congress/1992_cr/h920428g.htm
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[^6]: "Government's Response to Defense Motions for List of Unindicted Co-Conspirators," United States v. Drogoul, No. 1:91-CR-078 (N.D. Ga. September 12, 1991), reproduced in House Committee on Banking, Finance and Urban Affairs, *Testimony of Former Employees of the Banca Nazionale del Lavoro,* Serial No. 103-95, November 9, 1993.
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[^7]: Gonzalez, Henry B. "Efforts to Thwart Investigation of the BNL Scandal," *Congressional Record,* House, March 30, 1992. https://www.globalsecurity.org/military/library/congress/1992_cr/h920330g.htm
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[^8]: Lacey, Frederick B. "The Banca Nazionale del Lavoro Investigation: Report of the Independent Counsel," reproduced in House Committee on Banking, Finance and Urban Affairs, Serial No. 103-95, pp. 514-15. https://archive.org/details/testimonyofforme1994unit
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[^9]: Gonzalez, Henry B. "Update on BNL Investigation," *Congressional Record,* House, January 21, 1993.
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[^10]: Order of Judge Marvin H. Shoob, October 1, 1992 (dated October 5, 1992), United States v. Drogoul, printed in House Committee on Banking, Finance and Urban Affairs, *Testimony of Former Employees of the Banca Nazionale del Lavoro,* Serial No. 103-95 (1994), pp. 205-206. https://archive.org/details/testimonyofforme1994unit
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[^11]: Answers submitted by Mr. Drogoul in response to questions on pages 20, 21 and 24 of the hearing text, printed insert in Serial No. 103-95, p. 153. https://archive.org/details/testimonyofforme1994unit
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[^12]: Senate Select Committee on Intelligence, *The Intelligence Community's Involvement in the Banca Nazionale del Lavoro (BNL) Affair,* staff report, S. Prt. 103-12, February 1993.
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[^13]: United States v. Drogoul, 1 F.3d 1546 (11th Cir. 1993), listing the seven who would not testify (Angelo Florio, Nerio Nesi, Giacomo Pedde, Giovanni D'Ercole, Marco Lunazzi, Francesco Bignardi and Gerardo Ruggero; the opinion spells the second name "Nero Nesi") and noting that Pedde and Florio were among them, and recording Drogoul's assertion that Pedde, Teodoro Monaco and Florio gave the authorizations. https://static.case.law/f3d/1/cases/1546-01.json
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[^14]: Testimony of Christopher P. Drogoul, House Committee on Banking, Finance and Urban Affairs, *Testimony of Former Employees of the Banca Nazionale del Lavoro,* Serial No. 103-95, November 9, 1993.
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