The Alhanooti case: An oil contract with Saddam’s G.O.I. without OFAC license

The Alhanooti case: An oil contract with Saddam’s G.OI. without OFAC license
The $40,000 potential, $0.00 realized

On Friday March 18 at 2 p.m. Judge Borman of the Eastern District of Michigan sentenced community leader and longtime activist Mr. Muthanna Alhanooti to a year and one day in federal prison. The personal saga of Muthanna ended on that day. There remains much confusion on the Muthanna case- what is it exactly that the government is charging he did? Is he a wealthy spy like the government charges seem to make him to be? Why was he sentenced to one year and a day in prison?
Government paints Muthanna as a spy, defense fails to counter
The confusion over Muthanna’s case is a result of the Bush administration’s presenting the case as a major case and the way that Muthanna’s attorney dealt with it. The government created the impression that Muthanna is a wealthy spy for Saddam. The government dealt Muthanna’s reputation a major blow by characterizing him as an agent/spy. Anyone who knows Muthanna knows that that cannot be true given the nature of Muthanna and his values. Muthanna is well known as a man who values friendship and freedom and hates betrayal and dictatorship. Such a man does not make a spy. The arrest of Muthanna made national and international news. In the U.S., the Wall Street Journal put his arrest as item one on its page one What’s News section. The international Arab media had a field day confusing the facts about the case and about Muthanna.

The five-count indictment
The initial indictment had five counts. Two counts were related to violations of the Iraq sanctions regime and three counts were making of false statements to FBI agents regarding the conduct in the first two charges. The first charge is conspiracy to “act as an agent of a foreign government,” “the second charge is the contract to purchase Iraqi oil in violation of the sanctions regime and three counts of false statement 18 USC 1001 (a)(2) to FBI agents. The conspiracy allegation is that Muthanna conspired with agents of Iraqi intelligence to form delegations to take to Iraq and work to undermine the sanctions regime. As compensation for his work, the government alleged that the government of Iraq allocated two million barrels of oil. It is a well- known fact that the government of Iraq rewarded its friends and those who advocated against the sanctions regime, whether independently or in coordination with Iraq, by awarding them contracts for oil that can be sold in the UN Oil for Food program. Many think that Muthanna actually received 2 million barrels of oil and is a millionaire. Far from it. In fact, the US government estimates that Muthanna would have made $100,000 out of the deal. Muthanna asserts that the contract would have resulted in $40,000 to him. Muthanna never received a penny from the deal- he merely accepted it and signed it off to LARU to take an allocation of Iraqi oil.

The Plea
Muthanna plead guilty to the second count of the indictment, the contract to purchase Iraqi oil in violation of the International Emergency Economic Powers Act (“IEEPA”) (50 U.S.C. 1705). He plead to accepting to the contract for the oil from the government of Iraq without having the proper license from OFAC, Office of Foreign Asset Control.

The government sentencing memorandum
In its sentencing memorandum, the government asked the judge to impose a sentence of 46 months on Muthanna- four years. In the Nature and Circumstances of the offense part the government wrote: “In direct contravention of IEEPA and the Iraqi Sanctions Regulations, defendant chose to unlawfully accept a valuable allocation of oil from the Iraqi government that was subject to the sanctions regime described herein. More specifically, defendant caused a contract between SOMO [State Oil marketing Organization] and an oil trading company, Laru, to be procured on his behalf…Defendant chose to ignore the national emergency that had been declared with respect to Iraq and instead, consummate for his own benefit a significant financial transaction with the highest levels of the Saddam Hussein regime.” Under the History and Characteristics of the Defendant section, the government wrote “Rather than being the result of a single mistake or bad decision, defendant’s crime was the result of a protracted effort to secure the oil allocation; indeed, Defendant, has told the FBI that he first discussed the oil allocation with Al-Huadithi approximately one year before the 2002 Congressional delegation.”
Muthanna had asked for probation. The government report read: ‘In his objections to the Presentence investigation report, defendant has indicated that he considers himself eligible for a departure based on his “extraordinary service to the United states during the early months of its occupation of Iraq by serving as a liaison with local government and other officials and the Coalition Occupation Authority in the Baghdad area.” However, the facts do not bear out Defendant’s assertions…Defendant could only recall by name one U.S. official with whom he met and he told the FBI that no U.S. government entity instructed defendant to perform any tasks , nor did the U.S. government offer or pay anything for defendant or FAAIR.’
Not only did the government refuse to acknowledge Muthanna’s efforts in helping the US government when he could, efforts that were motivated by loyalty and patriotism on his part, performed while not receiving one cent from the US government, the prosecution asked for a maximum penalty. The prosecution claimed, with a straight face, that Muthanna’s case is similar to Najib Shemami’s case. Najib Shemami admitted that he spied for the government of Iraq, endangered American troops and American citizens, and got paid by the government of Iraq for his spying and endangering Americans. According to a news report on the Shemami conviction, Shemami “told Iraqi authorities about the activities of expatriates in the United States. He also reported on U.S. military movements in Turkey before the invasion, describing the location of 200 tanks as well as tents for refugees.” This is completely different from the charges in the indictment of Muthanna let alone the charge he plead into. It also raises a question about the morality and ethics of such a comparison in a court of law.

The sentencing
In the sentencing, Judge Borman’s behavior was exemplary. It was a sober, deliberate and respectful process for all who spoke before the court. The performance of Muthanna’s attorney, an attorney who was paid a princely amount to defend Muthanna, however, left a lot to be desired. I am referring only to what I saw and heard in the sentencing hearing and soon after. Linda Moreno quoted Aleksandr Isayevich Solzhenitsyn, the Russian novelist, on freedom and innocence. That was seen as pretentious and of no value in an American court sentencing a Muslim Arab American man. More importantly, there were a number of factors that she could have raised that could have only helped Muthanna get a lighter sentence. For example, Muthanna had inquired whether getting the gift contract from the government of Iraq is legal and was told by some who did the research that it is a U.N. program and is fine. This fact was not mentioned by Ms. Moreno. Most importantly, the government alleged in the sentencing that Muthanna “negotiated at the highest political echelons” the oil contract. Recall that in the prosecution sentencing memo the government used “protracted effort” and” discussed.” This assertion of a deliberative and willful process of “negotiation over a year” went unchallenged by the defense and was cited by the judge in imposing the one year sentence. When the government uttered the words of “negotiated” and “highest echelons” Muthanna nudged his attorney because it was not true and he wanted her to challenge that assertion. Ms. Moreno motioned to Muthanna to stay quiet and this single assertion was singularly mentioned by the judge in imposing a one- year term. I was in the courtroom at the time and Muthanna told me this outside the court room. He separately told attorney Shereef Akeel and Moreno about it and inquired why she did not challenge the government allegation. It was too late he was told. Looking back, the judge cared more about the untrue allegation of a deliberate “negotiation” with “upper echelons” than about the learned citation of Aleksandr Isayevich Solzhenitsyn. The only solace of Muthanna is that he is not in Russia and he will not be serving time in the Gulag Archipelago.