The IRS Takes on Saddam's Kin

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JAMAL NASRALLAH/AFP

MONEYMAN: Saddam's half-brother, Barzan Tikriti, in 1998

As the early-morning cool gave way to temperatures that would rise above 100˚, Saddam Hussein's half brother sat calmly in a pale blue safari suit and sandals waiting to confront his American cross-examiner. Since his capture on April 17, Barzan Tikriti had been through weeks of questioning on military and security issues at an interrogation center near Baghdad airport. Now it was time to talk money. A special interrogator had been flown in from the U.S. to take up the matter of Saddam's hidden wealth with the man long regarded as the dictator's financial mastermind. What the American found was a detainee not only willing to talk about his brother's finances but also eager to denounce the regime he had long served.

According to the interrogator, Scott Schneider, Barzan proclaimed on several occasions, sometimes banging his fist on a folding table, "I spoke out against the regime." He demanded a search for documents that he said would prove his resistance to Saddam's dictatorship. Barzan had fled before the U.S. dropped six smart bombs on his luxurious compound 70 miles west of Baghdad, and was then turned in to American forces by an informer. Yet Schneider, an IRS criminal investigator based in Pensacola, Fla., told TIME that he displayed no ill will toward the U.S. Vain and concerned about his appearance, Barzan did grumble about a tear in his safari suit and waved a hand to show his long fingernails, complaining that he had not been allowed to trim them.

Barzan, who shared a mother with Saddam and whose daughter was once married to Saddam's elder son Uday, repeatedly demanded to be set free to participate in the running of his occupied country. "If you release me, if you let me go and then find a document implicating me in any crime, I will voluntarily come back (to detention)," he told an astonished Schneider. In addition to helping Saddam hide a fortune that U.S. investigators think could be anything from $2 billion to $7 billion or more, Barzan served from 1979 to 1983 as head of Iraqi intelligence, an organization notorious for its brutish tactics. Indict, a British human rights group, claims it can produce up to 30 witnesses to support various allegations against Barzan. Among them: he helped direct the murder of thousands of rebellious Iraqi Kurds in 1983, and he personally visited beatings, electroshock and executions on Iraqi prisoners.

If Barzan truly opposed Saddam, he did not let it show in a letter he wrote to his half brother that U.S. officials found among Barzan's possessions shortly after the regime fell. TIME obtained a synopsis of the nine-page handwritten document and also examined a partial copy of the original, which was apparently produced sometime in the 1990s. In the letter, Barzan describes the status of various funds controlled by Saddam and discusses means for hiding the money.

The tone of the missive is hardly that of a man writing to a close family member but rather of a fearful servant addressing his wrathful master, which is not surprising, given Saddam's penchant for crushing those who crossed him, kin or not. The letter contains little family bonhomie and no questions about relatives. Barzan never fails to refer to Saddam as "Your Excellency," and he does not stint when it comes to abject professions of devotion. "I hope that we will all be guarded by good intentions, purity of heart and the innocence of our motives," Barzan writes in an aside after describing how to camouflage assets. "I am prepared to do anything to increase your level of trust in the soundness of our relations which we live and die for ..." He signs the letter "your loyal brother, Barzan."

Despite his caution, Barzan occasionally spoke of the need for vague political reforms in Iraq. He is also widely believed to have run afoul of Saddam on a number of occasions over family matters, like his failure to marry his son to one of Saddam's daughters. Despite their differences, say private investigators who have studied Saddam's assets, Barzan began managing his half brother's overseas portfolio after moving to Geneva in 1983. There, he occupied a lavish lakeside villa and served as Iraq's ambassador to Switzerland and to the U.N.'s Geneva branch. His other job was establishing the extensive financial network that helped sustain Saddam during decades of war and international sanctions.

On the eve of the fIrst Gulf War, according to investigators hired by the Kuwaiti government, Barzan orchestrated a sweeping repatriation of Iraqi assets held abroad, preventing their seizure. When international sanctions were imposed on Iraq, he hid the funds in locations safe from prying eyes. Money that had been kept in sham accounts or in government bonds, including U.S. Treasuries, was stashed in companies or with individuals in Europe, the Middle East and Asia, sometimes via Iraq's Rafidain Bank, according to a report by the Coalition for International Justice, a Washington-based human rights group.

What most interest U.S. officials about Barzan's letter are the details describing where money was hidden and how. Investigators, who would not release those details for publication for fear of compromising their work, are now following up on the leads. At one point in the letter, Barzan mentions setting up a foreign dummy company to obscure an unidentified operation, apparently connected to Iraqi intelligence. Clearly, his goals went beyond concealment, because later he dismisses the idea, telling Saddam the taxes would be too high and the rate of return too low. In another part of the letter, Barzan writes, "In case there is a notion to withdraw (money), I believe it should be transferred under a different name." Otherwise, he writes, the transfer "will attract the attention of the authorities." It's not clear which authorities he means.

For U.S. investigators, the letter also served as a check on Barzan's veracity. Without letting on that he had the letter, Schneider questioned Barzan closely on its contents to establish what interrogators call a base line. The conclusion: Barzan was at least partly truthful. That gives Schneider, who found Barzan brash but always cordial, some hope that additional information he offered during the interrogation will pan out. Hoping to recover some of Saddam's missing billions, the IRS is fielding teams of investigators on several continents to track down every lead Barzan produced. There were quite a few, says Schneider, noting, "We definitely spent quality time together." U.S. officials fear that if not recovered, Saddam's money could find its way to terrorists or to those continuing to resist the occupation of Iraq. In addition, any money recovered from Saddam's stashes could help fund Iraq's reconstruction. Washington had counted on Iraqi oil revenue for much of that financing, but the industry is producing below expectation because of looting, sabotage and unanticipated maintenance problems. "There is a crying need for money to reconstruct Iraq, and anything we recover will buy a whole lot of schoolbooks," says David Aufhauser, general counsel of the U.S. Treasury, who is overseeing the effort to track down Saddam's wealth. "We must also demonstrate to the world that kleptocrats, tyrants and despots cannot rape their nations' finances and simply get away with it." That almost sounds like something Barzan would say these days.