Who's On Trial?

THROWING OUT A PLEA BARGAIN IS AN UNUSUAL step in the U.S. court system. But just about everything in the continuing legal saga of Christopher Drogoul is unusual. Though Drogoul pleaded guilty in June to 60 of 347 counts that he made $4 billion in illegal loans to Iraq before Saddam Hussein's invasion of Kuwait, a prosecutor announced last week that the government was no longer willing to honor that agreement because the defendant lied throughout his three-week sentencing hearing.

But a trial will also open a Pandora's box of allegations by the former Atlanta branch manager of the Italian Banca Nazionale del Lavoro and his attorney Bobby Lee Cook. They say that senior B.N.L. officials in Rome not only approved the loans to Iraq but that the U.S. and Italian governments were aware of the transactions. As proof, Drogoul and Cook introduced what they claim is an internal bank document written in Italian and slipped under Cook's hotel room door last week. The document is an executive summary of meetings between bank executives, Italian government officials and representatives of the U.S. government held in Washington in the spring of 1990, including a White House luncheon attended by Italian Ambassador Rinaldo Petrignani and Attorney General Richard Thornburgh. If the document proves authentic, score one for Drogoul's claims of a Bush Administration cover-up of its role in providing loans to Iraq just before the Gulf War.