By Chris Wogan
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As expected, Iraq defaulted on all of the US-backed loans after its invasion of Kuwait, and US taxpayers were left to pay the tab. Representative Henry Gonzalez’s attempts to obtain information and gather evidence to support the House Banking Committee’s investigation were often blocked by the government agencies involved in the investigation. The White House, CIA, State Department, and Justice Department all refused to hand-over hundreds of documents pertinent to Rep. Gonzalez’s investigation into the BNL scandal by his Senate Banking Committee.
On November 21, Reagan asked Attorney General Ed Meese to conduct an inquiry into the accusations to get the facts straight, and Meese returned after only two days to tell Reagan the bad news. Meese’s office discovered a memo in Oliver North’s office from North to Poindexter that included details on an amount of money to be sent to the contras from the Iran sales profits. Reagan was said to have been visibly shaken after realizing the possibility of being impeached. The next day National Security Advisor John Poindexter resigned and Oliver North was fired.
According to Gonzalez, the CCC would announce a country’s coverage in the program, and US agricultural exporters would register sales to that country (in this case Iraq) and pay the CCC a guarantee fee. The transactions must be covered by a letter of credit from a CCC-approved bank located in Iraq. The exporting companies in the US would assign the guarantee to a bank like the Atlanta-BNL to finance the transaction. In those instances that Iraq did not pay for the imports, the CCC owed money to the bank that financed the transaction.