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By ZEINA KARAM
Associated Press Writer
January 23, 2005
Lebanon's finance minister played down Sunday the transfer by Iraq's Defense Ministry of $500 million in cash to a financial institution in Beirut, saying he would expect such a transfer to be legal if it was made by the Iraqi government.
In southern Iraq, meanwhile, the politician demanding an investigation into Iraqi Defense Minister Hazem Shaalan's decision to shift the cash to Beirut said he was not fleeing his country. Ahmad Chalabi said he was staying despite Shaalan's threat to arrest him and turn him over to Interpol based on an old Jordanian bank fraud conviction.
Finance Minister Elias Saba, speaking in an interview with the private Lebanese Broadcasting Corporation, said he could not confirm whether such a money transfer had been made and that such information would be with the Central Bank. Lebanese banking laws would not require it to be revealed.
However, Saba said he would not expect such a transfer to be a problem.
"If the source is the (Iraqi) government, there is no problem. It is not against the law," he said.
An Iraqi Defense Ministry official on Saturday confirmed the transfer from the Iraqi Central Bank to a financial institution in Beirut to buy weapons, saying it did so in a legal manner and with assistance from U.S.-led multinational forces. He said he believed the amount was US$500 million.
Such transfers have not been uncommon in Iraq since the fall of the former regime.
In January 2004, before the restoration of Iraqi sovereignty, Lebanese authorities confiscated 19.5 billion Iraqi dinars, then worth $15 million, from a private Lebanese-owned plane that flew from Baghdad to Beirut. Authorities ascertained the source - the Interior Ministry - and deemed the transaction legal, releasing the money so armored cars could be purchased.
Saba noted Lebanon's banking sector is very active and is known to be a gateway for many Arab countries to the rest of the world.
"In Lebanon, there is complete freedom for moving money around. There is nothing that prohibits moving money electronically or even in bank notes," he said, as long as the Central Bank's Special Investigation Committee on combating money laundering was aware of the source of the money.
Lebanon enjoys banking secrecy laws and an open market economy in a region where most financial institutions are either owned or controlled by the state.
Shaalan, who accuses Chalabi of trying to tarnish his image and that of the ministry, said Friday that Iraqi authorities would initiate criminal proceedings against Chalabi and hand him over to Interpol after the Islamic religious holiday of Eid al-Adha, or Feast of Sacrifice, which ends Sunday.
Shaalan told Al-Jazeera Television that Chalabi would be turned over to Interpol because of his 1992 conviction in absentia by a Jordanian court for embezzling funds from a Jordanian bank that he founded and ran while in exile there. The bank collapsed in 1989 in a move that shook the foundations of the Jordanian financial system; Chalabi has denied any wrongdoing.
In the southern Iraqi city of Basra, Chalabi denied on Sunday reports that he was planning to flee Iraq through Basra following Shaalan's arrest threat.
Chalabi repeated his fraud accusations against Shaalan and the interim government of Prime Minister Ayad Allawi, accusing them of buying votes for the Jan. 30 election and saying those responsible for transferring Iraqi funds abroad ought to stand trial.
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