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LIVE FROM THE HEADLINES

Interview With David Aufhauser

Aired May 14, 2003 - 20:14   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ANDERSON COOPER, CNN ANCHOR: While many of Iraqis lived in squalor, Saddam Hussein reaped billions. A lot of it is said to be kickbacks from the U.N. Oil for Food program. Well, now that Saddam is gone, the search is on for his riches, and now the Iraqi people may benefit. CNN's Chris Huntington reports.
(BEGIN VIDEOTAPE)

CHRIS HUNTINGTON, CNN CORRESPONDENT (voice-over): U.S. officials now believe the hundreds of millions of dollars in cash found by soldiers at the end of the war in Iraq was actually the bulk of the money Saddam Hussein's younger son Qusay tried to steal from the Iraqi Central Bank just before American tanks rolled into Baghdad.

DAVID AUFHAUSER, GENERAL COUNSEL, TREASURY DEPARTMENT: Two hundred six boxes of cash, either euros or U.S. dollars, were packaged that night by Central Bank personnel. But they were very meticulous in the records they kept. Out of the 236 boxes, we may well have found 191.

HUNTINGTON: All told, U.S. officials believe they know where close to $5 billion of Saddam Hussein's money is located -- $1.7 billion seized from U.S. bank accounts is now in the New York Federal Reserve. The cash found in Baghdad, nearly a billion if it's not counterfeit. Then there's more than $2 billion identified or frozen in global bank accounts, including nearly half a billion dollars found this week by the Central Bank of Lebanon.

And there's likely to be a whole lot more. U.S. officials insist Saddam Hussein's regime skimmed at least $6 billion from the U.N.'s Oil for Food program. International security expert Jules Kroll believes Saddam Hussein probably stashed around $12 billion, and not just in the traditional money havens like Switzerland.

JULES KROLL, KROLL INC.: But what you will find is that there are also much more esoteric places that these things are found today in certain Pacific island trusteeships, and so on. And we may also find it in some of the major industrial countries of Europe.

HUNTINGTON: But getting the money back to the Iraqi people remains a challenge. So far only a small portion of the seized assets have helped pay for the reconstruction effort.

(on camera): The Bush administration has gone back to the United Nations with a proposal to set up the Iraqi assistance fund. If approved, it would be administered by the United States with some U.N. and international involvement. The sooner that process is resolved, the sooner the Iraqi people get their money back.

Chris Huntington, CNN, New York.

(END VIDEOTAPE)

COOPER: Well, it's a fascinating story we want to hear more about. We're going to bring in David Aufhauser, he's general counsel for the Treasury Department and the lead sleuth, so to speak, in the hunt for Iraq's billions. He joins us from Washington. Thanks very much for being with us.

Hey, how much do you think Saddam Hussein was worth before he fell, and how much of that money may still be out there somewhere?

AUFHAUSER: Well, it's an unimagined amount of wealth. Nobody can put a specific amount on it. But it's in the billions of dollars. GAO put it at maybe as much as $6.6 billion.

COOPER: And spread out where?

AUFHAUSER: Well, it went through a bunch of switching stations in the Gulf states and then was sent out to various nestage (ph) jurisdictions in Europe and in Asia, and we've gone out and canvassed those jurisdictions and invited them to participate in the hunt.

COOPER: And what was he using this money for while he was in power? I mean, was this all money he hoped to just stock away for a rainy day or if things went really bad, or was it money he was using to maintain power?

AUFHAUSER: Three principal applications of the money. The first was misspent obscene extravagances which you've witnessed in the palaces. The second, actually, was to rearm himself. And the third is probably to salt some money away for a rainy day.

COOPER: What's the toughest part about tracking down this money?

AUFHAUSER: Well, he had somebody akin to his Tom Hagen in the form of a guy named Barzan Al-Tikriti. And Tikriti was a master at creating legal deceptions around the world. So going after the money requires unpeeling an awful lot of layers of the onion.

COOPER: And are you getting the cooperation you want from other governments, from other countries, other banking systems?

AUFHAUSER: In some cases, actual action, as was the case in Lebanon, who agreed to suspend or to secure $495 million. Indeed, even in the case of Syria, we recently spoke to them as late as yesterday, where they indicated that they were willing to block whatever funds they had of the government, and indeed to assist us when we provide them with the names of front companies.

We're discovering new front companies every day. We're exploiting more documents in Baghdad. And as a result of the interrogations, we have a better sense of what to ask for. COOPER: I know you're in charge of finding the money, not necessarily distributing it, but what's going to happen to the money once it is found?

AUFHAUSER: Every red cent is going to be dedicated to rebuilding Iraq.

COOPER: Distributed how? Has that been determined yet?

AUFHAUSER: Well, it will be distributed in accordance with the budget process, put up -- or established either by the provisional coalition authorities or, as soon as possible, the interim Iraqi authority, as soon as that is stood up. Once that budget is established, we'll know how much money needs to be distributed to the Education Ministry, to the Finance Ministry, to the Transportation Ministry, and the like.

COOPER: All right. David Aufhauser, appreciate you joining us. Thanks. It's a fascinating story.

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