By Ray Stern
By Ray Stern
By New Times
By Amy Silverman
By Stephen Lemons
By Stephen Lemons
By Monica Alonzo
By Chris Parker
Jawad Hashim raises his chin slightly, looking directly into the video camera recording his statement. Droves of lawyers hover. They all want to know just what Hashim did with several tens of millions of Arab dollars that disappeared more than a decade ago.
It's not the first time Hashim--a 57-year-old former Iraqi planning minister, a longtime confidant of President Saddam Hussein--has been questioned about the $50 million he stands convicted of embezzling from the Arab Monetary Fund.
Impeccably dressed in a dark-blue suit, his face tan and hair neatly groomed, Hashim exudes confidence. He seems almost amused as the deposition unfolds in the Arizona Center offices of the Phoenix law firm of Snell & Wilmer. After all, Hashim has dodged similar financial questions for 11 years, in court battles on three continents.
"If you are trying to wear me out, you can't," Hashim informs Snell & Wilmer's top bankruptcy attorney, Don Gaffney, who is just beginning to wade into Hashim's tangled financial web.
Gaffney, hired by the Arab Monetary Fund to track its assets, doesn't flinch.
"I'm glad you're in good health," he retorts.
Hashim has reason to be confident. He's already thumbed his nose at a court in the United Arab Emirates, refusing to attend a 1987 trial where he was convicted of defrauding the Arab Monetary Fund--an Abu Dhabi-based development agency--of $50 million. That proceeding also assessed him a 243-year prison sentence and an $80 million fine that Hashim, of course, never served or paid.
Instead, he fled to England. The Arab Monetary Fund eventually followed, filing a massive civil lawsuit. In 1993, the monetary fund won a $160 million judgment against Hashim and additional sums from his wife and two sons. Hashim slipped out of the country before the judgment was finalized. The courts later slapped him with a contempt of court charge that carries a two-year prison sentence, should Hashim be careless enough to step foot on British soil.
But he's out of Abu Dhabi. He's nowhere near England. Right now, Hashim's legal show has come to Arizona.
He's moved into plush quarters at the Phoenician resort. He's filed bankruptcy in an attempt to keep the AMF from collecting its money.
And he's doing what he has done well for a decade now. One of the world's great embezzlers is playing the victim.
"We came here thinking Saddam Hussein's reach could not get us," Hashim says. "But he is attacking us through the capacity of the Arab Monetary Fund."
Jawad Hashim and his wife left England in October 1993 and traveled to Canada before settling in Scottsdale to join their two sons, Omar and Jafar, who were already living in Arizona.
Omar was attending Arizona State University, and his older brother, Jafar, was finishing a master's degree at the American Graduate School of International Management in Glendale.
The family settled into a comfortable apartment off Civic Center Boulevard in downtown Scottsdale. Neither Hashim's conviction in Abu Dhabi nor the massive civil judgment entered in England could form the legal basis for extradition from the United States. Things were relatively peaceful.
They remained quiet until last fall, when the Arab Monetary Fund caught up with Hashim and filed a lawsuit in Phoenix, seeking to collect the $160 million that British courts said he owed.
In a crucial decision, Hashim elected not to fight the AMF in Maricopa County's Superior Court, where he might have kept the case tangled up for years. Instead he, his wife and their two sons decided to gamble by filing for bankruptcy protection.
Their goal was clear: quick declaration of bankruptcy, which would set aside the massive British judgment and let them get on with their financial affairs.
But filing bankruptcy also carried a risk.
It opened the door for the Arab Monetary Fund to contest any effort to nullify the British judgment and gave the fund the power to examine the assets of Hashim and his family.
The monetary fund seized on the bankruptcy filings with gusto. It hired Gaffney, one of the top bankruptcy attorneys in the state, and he has been methodically raking Hashim and family over the coals of pretrial discovery, hoping to find and recover at least some of the missing AMF millions.
Gaffney seems to take great pleasure in dissecting a case, bit by bit. During depositions, he bores in time and again, trying to clarify Hashim's evasive answers. A loan granted in December, a few weeks after Hashim filed for bankruptcy, becomes a target.
"Where did the $20,000 go?" Gaffney asks.
"On what I spent it, I really have to figure out," Hashim, who has master's and doctorate degrees from the London School of Economics, replies. "Because I don't know. I can't remember."
Gaffney rephrases the question.
"Did you buy anything?"
Hashim pauses, casts a glance toward his attorney, and replies: "Probably. I bought two shirts. Yes. Some socks. Shampoo."
And so it goes.
Hour after hour. Day after day. Gaffney presses Hashim for details. Slowly, very slowly, information starts to emerge. Sometimes, information that Hashim failed to disclose on his sworn bankruptcy filing. Sometimes, information that catches the attention of a federal bankruptcy fraud task force.
A bank account here. A few hundred thousand dollars over there. A mysterious offshore company. Complex real estate deals. Cash spirited out of Canada in suitcases. Bundles of checks, endorsed by other people, given to Hashim to cash whenever he wishes.
Early in the first interview, Gaffney presses Hashim for details of a $500 dinner and a subsequent trip to Las Vegas, where he spent the New Year's holiday at the Mirage Hotel. That foray came eight weeks after Hashim's bankruptcy disclosure statement claimed he had no assets, no cash, no debts, no job.
"Did you gamble?" Gaffney asks.
"I played some slot machines," Hashim replies. "I put some $20 in, and I won $500."
For an awfully long time, luck has seemed to be on Jawad Hashim's side.
Hashim claims he is innocent of any wrongdoing in regard to the multimillion-dollar losses the Arab Monetary Fund suffered more than a decade ago.
He says the losses--some $50 million--stemmed from legitimate currency and metals trading conducted by the fund during the time he was its director--1977 to 1982. Hashim says the monetary fund is trying to rewrite history, belatedly, and falsely, claiming he was not authorized to conduct the trades on the fund's behalf.
Actually, Hashim claims, he and his family, not the Arab Monetary Fund, are the true victims. Like thousands of others, Hashim says, he has become a target of Saddam Hussein's vengeance.
On the surface, Hashim's story--that he is being relentlessly hounded by the ruthless Saddam--seems plausible. Since departing Iraq, Hashim has helped other Iraqi officials defect, made public statements about Hussein's hidden wealth and Iraq's nuclear weapons program and testified before Congress about the Iraqi dictator.
Beneath the heroic story that Hashim spins is another story, a long, painstakingly documented history of deception, forgery and illegal movement of money around the world.
First, though, Hashim's version of events, pieced together from interviews, court documents and press accounts:
Hashim met Saddam Hussein while teaching at a Baghdad university where Saddam was studying law. The men became friends and Hashim rose to power on Saddam's coattails. Beginning in 1968, Hashim enjoyed the financial extravagances associated with being a close confidant and adviser to Saddam.
"When I was Saddam Hussein's minister of economics, I was paid about $200,000 a year, but that was really pocket money. Everything was paid for--cars, apartments, servants, food, everything," Hashim told the London Daily Mail, a British tabloid newspaper, in December.
In 1977, Saddam nominated Hashim as the first director-general of the Arab Monetary Fund, an agency created by 22 Arab countries to finance development projects in Middle Eastern nations lacking substantial oil income. His nomination was accepted, and Hashim and his wife moved to Abu Dhabi in the United Arab Emirates to oversee the fund's operation.
Hashim claims in court documents that during his five-year term as director of the Arab Monetary Fund, his relationship with Hussein soured. Many of Hashim's colleagues, and many other Hussein advisers, were executed during that period.
"On [Hashim's] last trip to Iraq before his term as director-general expired, Dr. Hashim himself was detained for three days by the Iraqi Intelligence Service for alleged political criticism of Saddam Hussein," court records say.
Hashim says members of his wife's family were also executed by Hussein during that time.
Once his term at the Arab Monetary Fund expired in 1982, Hashim decided not to return to Iraq, despite Hussein's order that he do so. Hashim claims his refusal eventually resulted in a death warrant being issued by the Revolutionary Command Council. Subsequently, he says, there were kidnaping attempts.
Hashim claims those attempts were admitted by the Iraqi minister of finance in an address given in April 1984.
"From that point forward, Dr. Hashim has been pursued either directly by Iraq, or as a result of its influence," court records filed by Hashim's attorneys say.
For the next seven years, Hashim kept a low profile, moving to Switzerland, England and finally Canada, where he says he became a citizen. During this period, there is no record of Hashim speaking out against Hussein.
But in the months following the 1991 Persian Gulf War, Hashim burst onto the international media scene, telling television and newspapers that Hussein had diverted billions of dollars from Iraqi oil sales and was moving forward with a nuclear weapons program.
In March 1991, Ted Koppel interviewed Hashim on ABC's Nightline news program. Hashim claimed that Saddam kept some $4 billion in cash on hand at his presidential palace and had skimmed more than $30 billion in government funds.
Saddam took his money in various forms, Hashim said: percentage payments on oil deals; bribes from arms salesmen; and kickbacks from Japanese companies obtaining contracts in Iraq.
According to Hashim, Saddam used the money to buy weapons secretly and to pay for favors from foreign leaders. Hashim said some foreign leaders left Baghdad with briefcases containing as much as $1 million. One of Hashim's more embarrassing public recollections involved Saddam's wife, who supposedly paid $320 million for the jewelry collection of the wife of the late shah of Iran.
In July 1991, Hashim sent a memo detailing Saddam's financial diversions to then-president Bush and the United Nations. The memo came at a crucial time. The U.N. was considering the relaxation of an economic embargo against Iraq.
Hashim's memo said that Hussein began diverting 5 percent of Iraqi oil sales to Swiss banks beginning in 1972, and the diversions lasted until at least 1989, according to a Washington Post story. Hashim's memo said that Saddam and the other leaders of the ruling Baath Party "wanted to accumulate sufficient funds, held abroad, to be used to finance their return to power in the event the party was ousted by a coup, or if the country were invaded."
The Post reported that Hashim's memo sent U.S. Treasury Department investigators searching for a huge Iraqi slush fund.
Treasury Department officials declined to comment last week on Hashim's memo. A variety of national and international press accounts indicates that efforts to find the $30 billion have proved fruitless. Sanctions against Iraq, however, have remained in place.
Two months after Hashim sent his letter to the White House and the U.N., he was a media favorite again, this time as an expert on the Iraqi nuclear weapons program.
Hashim told USA Today that a "topnotch" nuclear scientist reported directly to Saddam's office. Saddam kept him in a secret place and spread rumors he had been executed, Hashim says. "If anyone there is going to develop the bomb, it is that man," Hashim was quoted as saying.
Between the ABC news broadcast in March 1991 and Hashim's nuclear disclosure later that summer, the former Iraqi minister hit the news at least one other time.
In May 1991, Hashim summoned reporters to Toronto to announce the defection of two Iraqi ambassadors and the issuance of Iraqi death warrants against the diplomats and himself.
Hashim said he and the other two men were cited during a secret Iraqi trial for high treason and for cooperating with the CIA and British and Canadian security agencies.
Hashim said that he and the ambassadors--Mohammed al-Mashat and Issa al-Rawi--had been sentenced to death by the Revolutionary Command Council, which is chaired by Saddam.
Iraq denied Hashim's claim two days later.
The Iraqi Information Ministry said Hashim's allegation was "entirely baseless." An unidentified government spokesman was quoted as saying that none of the three had been tried or sentenced in absentia.
The spokesman called Hashim "an internationally known convict"--a reference to his 1987 conviction in Abu Dhabi for defrauding the Arab Monetary Fund. The spokesman also claimed that Hashim was pretending to be a victim of persecution to gain "personal benefits and then capitalize on that."
To be sure, Iraqi officials have lied, and lied often, in the bitter aftermath of their country's Gulf War defeat. But then again, so has Jawad Hashim.
While Hashim portrays himself as an anti-Saddam freedom fighter, court records from around the world show that there is another, less selfless side to the man.
Soon after Hashim's term as director ended in 1982, the Arab Monetary Fund launched an internal audit to find the causes of heavy losses it had suffered during his tenure. The audit uncovered a series of transfers of AMF assets to the Dresdner Bank in Luxembourg, where they were placed in "account No. 444."
The account was in the name of Jawad Hashim.
In May 1983, the monetary fund hired the accounting firm of Ernst & Whinney to conduct a more extensive audit. The accountants reported that evidence strongly suggested Hashim had siphoned about $50 million from the fund.
By the time Ernst & Whinney completed its work, however, the money allegedly diverted from AMF had been moved from Hashim accounts at the Dresdner Bank and at the eventually notorious Bank of Credit and Commerce International. (In the wake of its spectacular 1991 collapse, BCCI was often referred to as the Bank of Crooks and Criminals.)
The Arab Monetary Fund filed criminal charges against Hashim in May 1984 in Abu Dhabi. Hashim was summoned to attend the trial, which began in October 1985, but he never appeared. After 53 sessions of the Abu Dhabi court, Hashim was found guilty on March 16, 1987, of 47 charges of breach of trust and forgery. He was sentenced in absentia to 243 years in prison and fined $80 million.
Hashim says the Abu Dhabi trial was corrupt and claims to have several audio-tape recordings of the judge in the case offering an acquittal if Hashim would pay $1 million.
"I have in my possession a tape-recorded conversation which the judge in Abu Dhabi, he was a member of the PLO . . . a Palestinian judge, he called me from Cairo," Hashim says. "And it was recorded. Not only once or twice. Three or four times where he said, 'Give me $1 million. I know you are innocent. I will acquit you,' or something like that. I have it in my possession. I will use it someday."
Hashim declined to provide the tapes to New Times.
While the monetary fund pursued criminal charges in Abu Dhabi, it used another investigative firm, Shearman & Sterling, to track missing AMF money and explore the filing of charges in other countries. Shearman & Sterling discovered substantial transfer of funds out of Hashim's accounts at Dresdner Bank and BCCI into two accounts in Switzerland.
The monetary fund filed a criminal complaint against Hashim in Switzerland in March 1985. Court-appointed experts examining Hashim's Swiss banking arrangements determined that, by 1984, $25 million had been transferred into--and out of--Hashim's Swiss accounts.
Hashim says no money was transferred out of the Swiss accounts, because he never diverted money to them to begin with. He says the monetary fund attempted to prove he moved the money into Swiss banks, but lost the case.
"It was fully litigated and they lost," Hashim says.
But records indicate that Swiss courts dismissed the case in May 1988 because the $25 million had already been moved out of Switzerland--and beyond the jurisdiction of Swiss authorities.
The monetary fund didn't catch up with Hashim for several years after the Swiss case; the fund knew he had assets in England, but it couldn't locate him. By this time, he was living in Canada, where he had obtained citizenship.
The fund got a break in the fall of 1988, when Interpol, the European international police force, passed on word that Hashim had entered England. The AMF quickly asked the British courts to impose a worldwide freeze on Hashim's assets. The courts assented.
At the same time, the Arab Monetary Fund filed a civil suit against Hashim seeking repayment of the embezzled funds. The suit dragged on for five years, finally going to trial in January 1993.
The British High Court of Justice conducted the yearlong trial. The court issued a 606-page judgment in December 1993 in favor of the AMF, concluding that Hashim "misappropriated for his own benefit substantial sums of money belonging to the AMF."
Among the misappropriations were $18 million in AMF foreign-exchange profits diverted to Hashim's accounts at Banque Paribas Geneva and First National Bank of Geneva, and another $3 million in diversions from initial contributions by four member nations of the fund. The court also held Hashim liable for $21 million in losses incurred in precious metal trades covered by monetary fund assets.
The court ruled that Hashim transferred at least a portion of the missing money to his wife and his two sons, Omar and Jafar. The court ordered Hashim to pay the monetary fund $160 million; his wife was to pay $11 million; and Jafar and Omar owed $12 million and $11 million, respectively.
Finally, the High Court of Justice lambasted Hashim and his wife for lying to the court, submitting false documents and destroying evidence during the trial.
"From beginning to end, this litigation has been conducted by Dr. Hashim on the basis there is no depth to which he will not sink in order to discredit the [Arab Monetary Fund] and to seek to advance his cause," says Justice John Murray Chadwick, the presiding British judge.
Hashim says Chadwick was biased against him.
At any rate, Hashim and his family didn't stick around in England to hear Chadwick's final pronouncements. They left Britain before the multimillion-dollar judgments against them were entered, and, in November 1993, went to Canada for a brief stop before moving to a Scottsdale apartment.
Just because Hashim had left England did not mean the legal wrangling there was over.
British taxpayers had paid a $6 million legal bill for Hashim's side of the AMF lawsuit, because he qualified for public assistance after the British court froze his assets in 1988. In fact, Hashim asked the court to spend another $150,000 in early 1994 to cover his costs of filing an appeal to the judgment. The British have since revoked Hashim's right to public assistance and are seeking repayment of the legal aid he already has received.
While the protest over legal-aid payments to Hashim was reaching a crescendo in the British media, Hashim and his family were ignoring British court orders requiring them to disclose assets and refrain from transferring funds out of England. The British courts found Hashim and his wife in contempt last winter, sentencing Hashim to a two-year prison term. A warrant was issued for their arrest if the Hashims should reenter England.
But Hashim cannot be extradited from Arizona on the British contempt charges, and the Abu Dhabi conviction also cannot be enforced here. In fact, since moving to Arizona, the family's standard of living has seemed to regularly improve.
Jafar Hashim purchased a $475,000 Paradise Valley home a few months before filing bankruptcy. He owns a $15,000 BMW, a $40,000 Range Rover and a $15,000 Mercedes, according to bank records.
Jawad Hashim, his wife and their son Omar have moved out of the Scottsdale apartment they first rented two years ago and now enjoy life in a plush casita in an exclusive gated community at the Phoenician golf course, on the flanks of Camelback Mountain. Hashim says $70,000 he's borrowed from friends is tiding him over until he can obtain employment.
In the meantime, he's writing his memoirs on the Middle East and his times with Saddam Hussein. He's also seeking permanent U.S. residency.
"The weather is lovely here," Hashim told the London Daily Mirror in December. "It is warm all year round, and it is such a delight enjoying my grandchildren. They have given me renewed interest in life. Yes, life is quite wonderful."
But that was before Don Gaffney became fully involved in that life.
In depositions connected to the Hashim bankruptcy filings, Gaffney, the attorney the Arab Monetary Fund has hired in Phoenix, is relentlessly picking the Iraqi and his complex finances apart.
Gaffney is accustomed to complicated bankruptcy cases. He was the lead attorney in the massive bankruptcy filing that liquidated convicted swindler Charles H Keating's $7 billion American Continental Corporation. The procedures are almost second nature by now.
Gaffney's 19th-floor conference room in Arizona Center has been converted into a records warehouse filled with Hashim family financial records. Thirty six-inch-thick spiral binders are jammed with information on the Hashims. Bank records, telephone bills, credit-card bills and subpoenas are stacked atop a 15-foot conference-room table. More than a score of videotapes--the lengthy and sometimes hostile depositions of Jawad Hashim and his family--sit on a stand next to a television.
And this is just the beginning of Gaffney's probe.
Subpoenas are flying out of Gaffney's office at a blistering rate, triggering outcries from the Hashim family's attorneys, who claim Gaffney is on a politically motivated fishing expedition that is financed by the revenge-seeking AMF.
Hashim says Gaffney has unfairly attacked innocent third parties with more than 70 subpoenas and is improperly dragging out depositions over many days.
"They are generating good fees for themselves," Hashim says, noting that he's filed protests with the court over Gaffney's tactics.
Protests may be filed, but the bankruptcy case clearly has not gone well for the Hashims.
Gaffney continues to discover contradictions not only in their written, sworn disclosure statements, but in their oral depositions. Undisclosed bank accounts are routinely uncovered, and the extent of the Hashim family's business ties are just coming to light, bankruptcy records reveal.
Gaffney obviously is trying to show that Jawad Hashim failed to disclose information on his bankruptcy petition.
Failing to disclose pertinent financial information on federal bankruptcy documents can have serious consequences--five years in prison and a $500,000 fine. Court records show that the U.S. Attorney's Office is monitoring the case, although federal officials say they can neither confirm nor deny an investigation.
Gaffney is boring in particularly hard on Hashim's 30-year-old elder son, Jafar, who has a master's degree from the American Graduate School of International Management in Glendale. Jafar has taken on the primary role of provider in the Hashim family, covering expenses for the rest of the family.
Gaffney already has uncovered several glaring contradictions in Jafar Hashim's bankruptcy filing. In one instance, Jafar Hashim claimed he owned only $2,500 worth of furniture. But Gaffney uncovered receipts in Canada and bank loan statements showing Jafar Hashim owned $500,000 worth of furniture.
The furniture, Gaffney argues, should be included in the bankruptcy estate for possible liquidation that would benefit the Arab Monetary Fund.
Such discoveries have become almost routine in the complex case, court documents show.
"On almost a weekly basis the last four weeks, [we] continue to unearth bank accounts that were not provided in the statement of affairs," Gaffney told the bankruptcy judge during a February hearing.
In the last two months, Gaffney has stepped up pressure to expand the range of his depositions to include parties other than the Hashim family. The trustees assigned to each bankruptcy estate are also urging the court to allow Gaffney to continue requesting financial documents from as many parties as necessary to determine the extent of the Hashim family's finances.
"You have individuals who are living significant lifestyles but don't seem to have any visible means of support that they can call their own," says attorney Terry Dake, who represents the trustee over the Jawad Hashim estate. "For the most part, the contention seems to be that they are relying on the generosity of others."
Tom Clemency, the attorney representing another of the bankruptcy trustees in the Hashim bankruptcy cases, is urging that Gaffney be allowed to expand his probe to include nonfamily members, including a wealthy Iranian-born businessman, Ali Salass.
Ali Salass is a young Scottsdale real estate investor who manages a portfolio of about 15 partnerships worth approximately $30 million. He hails from an immensely wealthy Iranian family that founded and continues to operate Iran's largest heavy-construction company.
Gaffney and the trustees want to determine whether the Hashims have commingled their funds--including, possibly, stolen Arab Monetary Fund assets--with Salass' fortune. They have some reason to suspect something might be going on.
Ali Salass' sister, Maryam Salass, is married to Jafar Hashim. And there is no doubt that Ali Salass has extensive financial dealings with the Hashim family, bankruptcy court records show.
During the past four months, Gaffney and Salass' attorneys have been attempting to reach an agreement on turning over documents and deposing Ali Salass.
Gaffney already has found scores of checks between Ali Salass and his sister and brother-in-law involving "substantial" amounts of money. Documents show Salass also has loaned $500,000 to Jafar Hashim for a real estate investment in Canada. Jafar Hashim later defaulted on the loan.
More significant, Gaffney discovered checks from Ali Salass to Jawad Hashim, who then deposited them in a Bank of America account that he did not disclose on his bankruptcy filing. Hashim says he closed the Bank of America account prior to filing bankruptcy.
"Money goes back and forth in very large amounts at the most simplistic level possible, and we're dealing here within three years of bankruptcy," Gaffney said in a March 7 bankruptcy court hearing.
Gaffney's discovery of financial transactions between Ali Salass and Jawad Hashim raises serious doubts about the veracity of at least one statement Ali Salass made under oath to the bankruptcy court.
In a sworn affidavit dated February 3--one month before Gaffney discovered the checks going from Ali Salass to Jawad Hashim--Ali Salass stated: "I have had no financial dealings of any manner with Jawad Hashim."
As one glaring inconsistency after another emerges in bankruptcy court, it is clear the Hashims are getting desperate.
Jawad Hashim is bringing in new lawyers, who are making long-shot attempts to derail further discovery in the case.
At a May 4 hearing, Jawad Hashim's latest attorney, Michael Carmel, attempted to persuade Judge Charles G. Case II to freeze all depositions and discovery until the judge rules on a motion to remove the Arab Monetary Fund from the case.
Carmel argued that the AMF shouldn't be allowed to intervene in U.S. Bankruptcy Court. At the same time, Carmel contended the bankruptcy court could discharge--that is, nullify--the $160 million debt a British court has ordered Jawad Hashim to repay the monetary fund.
Case was stunned by Carmel's logic.
"That's a pretty sweet deal for the debtors [the Hashims]," Case said, rejecting Carmel's motion and allowing Gaffney to continue his search for $50 million that disappeared more than a decade ago, when America was still tilting toward Iraq and Saddam Hussein was a name not yet linked to infamy.