Charity Official Accused of Spying for Iraq

Feds: Mich. man set up U.S. lawmaker trips for Saddam Hussein's intel service.

January 08, 2009, 1:15 AM

March 26, 2008— -- The former spokesman of a Detroit-area Islamic charity, who organized U.S. congressional delegations to Iraq, has been indicted for alleged conspiracy to spy for Saddam Hussein's government.

Muthanna Al-Hanooti, who worked as a top official at Life for Relief and Development — a charity in Southfield, Mich. — allegedly coordinated U.S. congressional delegations to Iraq at the direction of the executed dictator's intelligence service between 1999 and 2002.

In return, investigators say he received payoffs via the United Nation's Oil for Food program.

The indictment, which was unsealed Wednesday in Detroit, alleges that between 1999 and March 2003, Al-Hanooti acted as an unregistered foreign agent for the Iraqi Intelligence Service, and charges him with three counts of making false statements and violating the International Emergency Economic Powers Act.

Al-Hanooti, the indictment alleges, provided the IIS with a written strategy of how to lift U.S.-Iraqi sanctions regulations, claiming he "provided to the IIS a list of members of the United States Congress whom Al-Hanooti believed favored lifting of the Iraqi sanctions regulations."

The court documents focus on a 2002 visit by members of Congress to Iraq that was paid through Life for Relief and Development: "In September and October 2002, an IIS officer directed an intermediary [in Michigan] ... to pay the 2002 congressional delegations' travel expenses."

Although their names are not mentioned specifically in the indictment, the trip taken by Reps. Jim McDermott D-Wash., Mike Thompson, D-Calif. and then-Rep. David Bonior, D-Mich. was widely publicized at the time.

A Justice Department official told ABC News that the lawmakers on the trip had no knowledge of Al-Hanooti's contacts with the IIS.

"None of the congressional representatives are accused of any wrongdoing, and we have no information whatsoever that any of them were aware of the involvement of the Iraqi Intelligence Service," said Justice Department spokesman Dean Boyd.

According to court documents and information reviewed by the grand jury in September and October 2002, LRD received $34,000 from the intermediary.

"As compensation for services that defendant Al-Hanooti has rendered to the government of Iraq, including his organizing and leading the 2002 congressional delegation, with the concurrence of unindicted co-conspirator number one, on or about Dec. 22, 2002, the vice president of Iraq directed the Iraqi minister of petroleum to allocate to defendant Al-Hanooti a quantity of two million barrels of oil," the indictment notes.

Al-Hanooti had worked with Iraqi government contacts to profit from the sale by moving the oil into the Oil for Food program to a company in Cyprus called Laru Ltd., the government claims.

FBI agents executed search warrants at the offices of Life for Relief and Development on Sept. 18, 2006. According to search warrants in the case obtained by ABC News, the investigation was looking at money transfers to the charity from the Middle East by "obtaining, secreting, transfer, concealment and or expenditure of money by LDR."

Agents seized numerous computer records, videos and tax records from five locations they searched in the Detroit area.

A lawyer representing Al-Hanooti could not be reached Wednesday evening. David O'Brien, an attorney representing Life for Relief and Development in civil litigation against the Justice Department, did not return phone calls on the status of the organization's lawsuit.

After an initial court appearance on Wednesday, Al-Hanooti was released on a $100,000 bond after surrendering his passport and agreeing to wear an electronic monitoring device.

Since 2003, the Justice Department has prosecuted 12 other individuals who were accused of spying for Saddam Hussein's intelligence service.

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