Agriculture and Food:
Iraq's Participation in the Commodity Credit Corporation's GSM-102/103 Export Credit Guarantee Programs
T-NSIAD-91-13, Mar 14, 1991
GAO discussed Iraq's participation in the Department of Agriculture's (USDA) Export Credit Guarantee and Intermediate Export Credit Guarantee (GSM) programs. GAO noted that: (1) export credit guarantees approved for Iraq under the programs increased from about $400 million in fiscal year (FY) 1983 to about $1.1 billion in FY 1988 and FY 1989, and $500 million in FY 1990; (2) USDA risk analysis documents for FY 1989 and FY 1990 rated Iraq as a high-risk market for granting substantial credit guarantees, yet USDA continued to approve credit guarantees through FY 1990; (3) Congress did not enact proposed sanctions against Iraq in 1988, partly due to foreign policy interests and pressure from U.S. agricultural groups; (4) although interagency deliberations on Iraq's participation in the program raised concerns about its creditworthiness and capacity to service additional debt, it continued to receive approved credit guarantees through FY 1990; (5) the Department of Justice's investigation into loan improprieties resulted in a 347-count indictment of 10 defendants, including Iraqi governments officials, for making fraudulent loans to Iraq totalling more than $4 million; and (6) GSM programs to Iraq were driven by foreign and agricultural trade objectives which exposed the U.S. government to substantial financial loss.