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CNN Live Today

Interview With Adam Zagorin

Aired October 13, 2003 - 10:32   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


DARYN KAGAN, CNN ANCHOR: Well ever since Saddam Hussein's statue fell in Baghdad this spring, American officials have been hunting not only for the man behind the monument but for his fortune, as well. Now there's a published report that says that up to $3 billion in Iraqi assets could be in Syrian banks controlled by the government there.
The special report is in this week's "TIME" magazine. Here now with more details on that report Adam Zagorin, Washington correspondent for "TIME" magazine joining us from our D.C. bureau. Adam, good morning.

ADAM ZAGORIN, "TIME" WASHINGTON CORRESPONDENT: Good morning to you, Daryn.

KAGAN: Haven't seen you since you and I were chasing Bono and the treasury secretary across Africa.

ZAGORIN: That is correct.

KAGAN: It has been a little bit of time. Now we're focusing on Syria here. Tell me what exactly American officials think is in these Syrian bank accounts.

ZAGORIN: Well, if you go back to May, last May, Secretary of State Colin Powell raised this issue privately with the -- at the highest level with Syrian President Bashar Assad. And the amount of money is supposed to be in the neighborhood of $3 billion, roughly. And Powell privately asked to get the money back.

Since then, what's happened is that the Syrians have denied publicly that they have the money. My understand something that the foreign minister of Syria denied it again this morning. But privately, I'm told, that Syrian officials have told the United States that unspecified bank accounts there have been frozen. And the United States right now has two financial specialists in Damascus looking for the money along with two representatives of the Iraqi Central Bank.

So they want the money back. But the problem is, according to U.S. officials, they are not really getting any cooperation from the Syrian government, and they're not happy about it. And that's why they're also going public with warnings which have been given privately before that Syria could face sanctions imposed by the administration under the PATRIOT Act that would target their financial system or the whole country if this cooperation about this money is not forthcoming. KAGAN: I want to get to what can happen to Syria in just a moment. But, first of all it's not that huge of a stretch to suggest this money to could have made it to Syria, after all Syria having a long-time economic relationship with Iraq.

ZAGORIN: Absolutely. Syria was the export conduit for a billion dollars in Iraqi oil that went out through a Syrian port, through a pipeline. A billion dollars every year. And that ended with the Iraq war, but that was in contravention of U.N. sanctions. It went on anyway. And the money, or apparently some it, anyway, has ended up in these Syrian government controlled banks, according to U.S. officials.

KAGAN: Let's talk sanctions now. Syria is in a lot of ways playing with fire by defying the U.S. demands.

ZAGORIN: Well, Syria has shrugged off in the past the impact of sanctions because -- and it's come up because there's also a bill working through Congress that could eventually impose sanctions on them.

But these sanctions would impact Syrian banks which finance, my understanding is, a very significant percentage of the country's foreign trade and exports and so forth. So that even if those exports are not headed for the United States or imports not coming from the United States, the sanctions could impact a much wider swath of products going in and out of the country involving European nations or Asian nations or other even Arab countries.

KAGAN: Adam Zagorin, "TIME" magazine, people can read more about the story there. Appreciate it. Good to see you again.

ZAGORIN: Thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com







Aired October 13, 2003 - 10:32   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DARYN KAGAN, CNN ANCHOR: Well ever since Saddam Hussein's statue fell in Baghdad this spring, American officials have been hunting not only for the man behind the monument but for his fortune, as well. Now there's a published report that says that up to $3 billion in Iraqi assets could be in Syrian banks controlled by the government there.
The special report is in this week's "TIME" magazine. Here now with more details on that report Adam Zagorin, Washington correspondent for "TIME" magazine joining us from our D.C. bureau. Adam, good morning.

ADAM ZAGORIN, "TIME" WASHINGTON CORRESPONDENT: Good morning to you, Daryn.

KAGAN: Haven't seen you since you and I were chasing Bono and the treasury secretary across Africa.

ZAGORIN: That is correct.

KAGAN: It has been a little bit of time. Now we're focusing on Syria here. Tell me what exactly American officials think is in these Syrian bank accounts.

ZAGORIN: Well, if you go back to May, last May, Secretary of State Colin Powell raised this issue privately with the -- at the highest level with Syrian President Bashar Assad. And the amount of money is supposed to be in the neighborhood of $3 billion, roughly. And Powell privately asked to get the money back.

Since then, what's happened is that the Syrians have denied publicly that they have the money. My understand something that the foreign minister of Syria denied it again this morning. But privately, I'm told, that Syrian officials have told the United States that unspecified bank accounts there have been frozen. And the United States right now has two financial specialists in Damascus looking for the money along with two representatives of the Iraqi Central Bank.

So they want the money back. But the problem is, according to U.S. officials, they are not really getting any cooperation from the Syrian government, and they're not happy about it. And that's why they're also going public with warnings which have been given privately before that Syria could face sanctions imposed by the administration under the PATRIOT Act that would target their financial system or the whole country if this cooperation about this money is not forthcoming. KAGAN: I want to get to what can happen to Syria in just a moment. But, first of all it's not that huge of a stretch to suggest this money to could have made it to Syria, after all Syria having a long-time economic relationship with Iraq.

ZAGORIN: Absolutely. Syria was the export conduit for a billion dollars in Iraqi oil that went out through a Syrian port, through a pipeline. A billion dollars every year. And that ended with the Iraq war, but that was in contravention of U.N. sanctions. It went on anyway. And the money, or apparently some it, anyway, has ended up in these Syrian government controlled banks, according to U.S. officials.

KAGAN: Let's talk sanctions now. Syria is in a lot of ways playing with fire by defying the U.S. demands.

ZAGORIN: Well, Syria has shrugged off in the past the impact of sanctions because -- and it's come up because there's also a bill working through Congress that could eventually impose sanctions on them.

But these sanctions would impact Syrian banks which finance, my understanding is, a very significant percentage of the country's foreign trade and exports and so forth. So that even if those exports are not headed for the United States or imports not coming from the United States, the sanctions could impact a much wider swath of products going in and out of the country involving European nations or Asian nations or other even Arab countries.

KAGAN: Adam Zagorin, "TIME" magazine, people can read more about the story there. Appreciate it. Good to see you again.

ZAGORIN: Thank you.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com