Agricultural Loan Guarantees: National Advisory Council's Critical Views
on Loans to Iraq Withheld (Letter Report, 10/27/93, GAO/GGD-94-24).

The National Advisory Council on International Monetary and Financial
Policies (NAC) approved more than $6 billion in Agriculture Department
(USDA) loans and credit guarantees to Iraq despite that country's poor
creditworthiness.  NAC's use of majority voting to decide issues, as
well as approval letters that omitted dissenting opinion, enabled USDA
to continue to provide loans to Iraq while giving the impression that
interagency backing for its credit decisions was unanimous.  In
addition, although the NAC review and approval process is not
essentially an analysis of financial considerations, USDA represented
NAC as a financial review process in describing its credit guarantees to
Iraq.  NAC's role shrank even further after the Iraq incident when the
Bush administration did not consult NAC before announcing USDA credit
guarantees to the former Soviet Union.

--------------------------- Indexing Terms -----------------------------

 REPORTNUM:  GGD-94-24
     TITLE:  Agricultural Loan Guarantees: National Advisory Council's 
             Critical Views on Loans to Iraq Withheld
      DATE:  10/27/93
   SUBJECT:  Agricultural programs
             Agricultural policies
             Foreign economic development credit
             Foreign governments
             Interagency relations
             Foreign loans
             Government guaranteed loans
             Economic policies
             Exporting
             International relations
IDENTIFIER:  Iraq
             USDA GSM-102 Program
             USDA GSM-103 Program
             CCC Export Credit Guarantee Program
             
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