Volume 116 >> Issue 40 : Tuesday, September 10, 1996

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News Briefs II

Dole Resumes Criticism Of Clinton's Iraq Policy

After a one-week hiatus, Bob Dole resumed his attack on President Clinton's foreign policy Monday, charging that reports of continued unrest in northern Iraq "raise questions" about the administration's strategy in the region and threatens to undermine U.S. credibility.

In a written statement released through his presidential campaign Monday, Dole questioned whether Clinton's strategy "has advanced U.S. interests in the region." But in campaign appearances in Georgia and Florida, Dole barely referred to Iraq, instead concentrating on domestic issues.

Dole, who initially criticized Clinton's "weak leadership" in the Persian Gulf, had supported the president's decision to launch a missile strike against Iraq last Monday after Saddam Hussein's troops overran a Kurdish faction in the city of Irbil.

He noted that Iraqi troops do not appear to be withdrawing from the north, and that Iraqis connected with a CIA effort to undermine Hussein's regime fear reprisals from his secret police.

"In Iraq, as in Bosnia, the Clinton administration should be careful about making claims of success that events on the ground may not substantiate, and about giving assurances that it is unable or unwilling to fulfill, because the credibility of the United States is at stake," Dole warned.

During a campaign stop in Georgia, Dole made only the briefest of references to Iraq, noting in passing that the "second-guessing" had begun over Clinton's policy. He did not elaborate.

L.A. Federal Reserve Branch Shows Accounting Flaws

The cash operation at the Los Angeles branch of the Federal Reserve Bank - which processes $80 billion of coin and currency every year - is riddled with defects in its accounting system, according to a confidential draft audit by the General Accounting Office.

The audit was launched after the disclosure earlier this year that the bank's cash reports had discrepancies of $178 million during a three-month period last year and that the bank's management had arbitrarily altered the books to make them balance.

"The L.A. bank's inability to precisely summarize currency activity from its cash inventory records raises serious questions about the integrity of its accounting and internal controls," the GAO report asserts.

The GAO report amounts to a rare attack on what critics say is an imperious institution, resistant to outside oversight and defensive of its independence. The Federal Reserve is seldom exposed to the public spotlight, other than for its economic policy decisions in setting interest rates.

As a result, the Federal Reserve's far-flung banking operations that control the flow of currency in the economy have not received serious outside scrutiny, despite their huge role in the nation's financial system.