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Drogoul, 43, had joined B.N.L. after spending seven years with Barclays Bank. (U.S. investigators allege that he left Barclays after making $2 billion worth of unauthorized loan commitments.) According to the indictment in the B.N.L. case, Drogoul and his Iraqi co-defendants had defrauded B.N.L. by making a series of unauthorized, low-interest loans to Iraq. About $1.9 billion worth of the loans was backed by Agriculture Department guarantees, and another $2.1 billion was uncollateralized commercial loans used by Iraq's Ministry of Industry and Military Production. Drogoul used intricate bookkeeping and money-laundering techniques to hide the transactions from auditors and regulators. In return, the indictment charged, Iraqi officials paid Drogoul $2.5 million directly and deposited an additional $2.25 million in foreign bank accounts for his use. U.S. prosecutors insisted that Drogoul acted alone; none of his superiors at B.N.L. offices in New York or Rome was implicated.
Drogoul, who had written a 122-page confession for his first attorney, Theodore Lackland, and was facing 390 years in prison, agreed to a plea bargain. In his written statement he said, "I cannot state that the bank ((in Rome)) was aware of our activities." In interviews with prosecutors, however, Drogoul did not always stick to that story. More than once, both during the investigations and later, he asserted that B.N.L.-Rome was aware of his loans to Iraq at the time they were made. TIME has learned that several still classified reports support Drogoul on this point. At first Iraq had accepted loans signed only by B.N.L. officers in Atlanta, but as the scale of these loans increased, the Iraqis asked that they be signed by executives in Rome. The bank agreed, and its headquarters approved funding for weapons and other purchases.
The federal judge in the case, Marvin Shoob, and members of Congress such as Boren were becoming increasingly skeptical about Justice's insistence that Drogoul had been a lone wolf. As a result, just before Drogoul's sentencing hearing, Brill asked Deputy Assistant Attorney General Laurence Urgenson to double-check with the CIA to make sure there was no hitherto unknown evidence of Rome's involvement. On Sept. 4 the CIA sent a letter to the Justice Department implying that it had no more than "publicly available" information -- meaning unconfirmed press reports -- that B.N.L.-Rome had been involved. This was misleading, as the Justice Department well knew. The CIA had long since shared with Justice a stack of reports, including several that dealt with the possibility of involvement by B.N.L.'s main office, although prosecutors did not consider them of any value.