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Will the truth come out in the U.S.-Iraq bank loans scandal?

Remember how James Earl Ray pleaded guilty to killing Martin Luther King Jr. 23 years ago and we never found out much about the case because there was no trial?

Well, until last week, the Bush administration's Justice Department had something similar in mind for a man named Christopher Drogoul.

Drogoul was manager of the Atlanta branch office of an Italian bank and was accused of loaning billions of dollars to Iraq's Saddam Hussein without going through proper channels.

There were 347 counts of bank fraud lodged against Drogoul, but the Justice Department deal was that he could cop a plea on 60 of the counts and get a light sentence _ if he swore that he, and nobody else, was responsible for the loans, many of which were backed by U.S. government guarantees.

Now before we go further, let's think about this for a minute.

The Justice Department was going to ask us to believe the manager of an Italian bank's branch office in Atlantadecided on his own, without telling his bosses back at headquarters, to loan Hussein about $4-billion.

On top of that, we were supposed to believe these billions of dollars were transferred to Iraq without bank officials or the Italian or U.S. government, its ultimate guarantor, knowing about it.

I don't know about you, but I would have found all this a bit hard to swallow for several reasons.

One is that Drogoul's bank, the Banca Nazionale del Lavoro, or BNL, is 90 percent owned by the Italian government. The manager of one of its more obscure branches doesn't loan $4-billion to anybody, especially Hussein, without telling his superiors.

Another is that the case was becoming highly embarrassing to a Bush administration already under fire for being excessively generous and lenient toward Hussein before his army invaded Kuwait in August 1990.

If the Atlanta case dragged on, there inevitably would be questions about whether the Bush administration knew about the illegal loans, if it condoned or even orchestrated them. It would be a mess, another scandal.

So, any way you looked at the Justice Department's plea bargain deal, there were plenty of reasons to be suspicious. But as long as Drogoul kept saying he acted alone, that was going to be the deal.

Drogoul would cop a plea and get a light sentence. There'd be no trial, no messy testimony and that would be the end of it.

On one level, the Justice Department deal made perfect sense. It would've been no more bizarre, say, than asking the public to believe Oliver North pulled off the Iran-Contra guns-for-hostages swap and guerrilla financing deal with no approval from his higher-ups.

But as it turns out, the plea bargain deal for Drogoul didn't work in the end. The branch office manager started saying that his bosses back in Italy knew all along what he was up to and approved it.

Then documents filed in the case indicated that the Central Intelligence Agency knew what was going on, too, and had passed on a report to the appropriate officials in the Bush administration. There were also allegations that the Italian government, through its ambassador to Washington, lobbied the Justice Department to keep the bank out of trouble.

The plea bargain was unraveling, becoming unsustainable.

So last week, U.S. District Judge Marvin Shoob agreed to vacate Drogoul's guilty plea. And at the same time, he sharply criticized the Justice Department's handling of the case.

"I have concluded that the substantial financing of Iraq by BNL-Atlanta was well-known in international banking circles, that it was well-known in the United States in banking circles and by U.S. intelligence," the judge said.

"I have concluded that the failure of U.S. investigators to conduct an investigation in Rome and Iraq and to question knowledgeable persons available to them indicated an effort" _ my italics _ "to absolve BNL-Rome of complicity in the Atlanta branch loans."

In short, the judge was saying the Justice Department was, for some reason, involved in a kind of coverup.

Shoob's decision had two consequences. First, it abruptly ended a three-week sentencing hearing for Drogoul in which embarrassing facts were being made public. Second, it set the stage for a full trial of the case in which all the ugly details eventually will get full publicity.

That's good, you might say. Now we'll finally know if there was some skullduggery involved here.

This time, it won't be like James Earl Ray and Martin Luther King Jr. This time, the American people will be able to hear the evidence and make up their own minds.

Well, there's a kicker, of course. The Justice Department won't be able to try the case until late this year or early next year.

However we make up our minds after hearing the evidence, it won't be in time to affect our votes in the presidential election.

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