Michigan Man Accused of Helping Saddam Set Up Pre-War Visit to Iraq by U.S. Lawmakers

Muthanna Al-Hanooti was given an offer that federal prosecutors say he couldn't refuse: Set up a trip for U.S. lawmakers to pre-war Iraq and earn 2 million barrels of Iraqi oil in return.

An indictment unsealed Wednesday in Detroit accuses Al-Hanooti, a member of a Michigan nonprofit group, of making those arrangements in 2002 at the behest of Saddam Hussein's regime. The deal allegedly was financed by Iraqi intelligence officials through an intermediary.

At the time, the Bush administration was trying to persuade Congress to authorize military action against Iraq. The three anti-war Democratic lawmakers apparently targeted by Al-Hanooti used their October 2002 trip to call for a diplomatic solution in Iraq.

The lawmakers in question firmly defended themselves Wednesday, saying they had no idea how the trip was financed, a story that law enforcement officials say checks out.

None of the lawmakers in question was charged and Justice Department spokesman Dean Boyd said investigators "have no information whatsoever" any of them knew the trip was underwritten by Hussein.

The lawmakers are not named in the indictment but the dates correspond to a trip by Democratic Reps. Jim McDermott of Washington and Mike Thompson of California, and former Rep. David Bonior, a Democrat from Michigan.

McDermott spokesman Michael DeCesare told FOX News his boss did not know Al-Hanooti and "would not have gone" had he known who paid for the trip to Iraq in the fall of 2002.

He added that McDermott cleared the trip in advance with the House Ethics Committee.

DeCesare said McDermott went with a Seattle church group to study "the plight of Iraqi children" and that while on the trip, McDermott met with doctors and visited children at a hospital.

Thompson too released a statement Wednesday, saying he traveled to Iraq to "see firsthand the conditions on the ground" and that it was approved by the State Department.

"The organization sponsoring the trip was licensed by the Office of Foreign Assets of the Department of Treasury and the United Nations," he said. "Obviously, had there been any question at all regarding the sponsor of the trip or the funding, I would not have participated."

During the trip, the lawmakers expressed skepticism about the Bush administration's claims that Saddam was stockpiling weapons of mass destruction.

"War is not the answer," Bonior, who is no longer in Congress, said at a news conference while on the trip. "There is a way to resolve this."

Though weapons of mass destruction ultimately were never found, the lawmakers drew criticism for their trip at the time.

Conservatives even dubbed McDermott "Baghdad Jim" for the Iraq journey.

Al-Hanooti was arrested Tuesday night while returning to the U.S. from the Middle East, where he was looking for a job, his attorney, James Thomas, said. Al-Hanooti pleaded not guilty Wednesday to charges of conspiracy to act as an unregistered agent of a foreign government, illegally purchasing Iraqi oil and lying to authorities. He was being held on $100,000 bail.

Thomas said Al-Hanooti would "vigorously defend" himself against the charges but he could not discuss the specifics of the case since he had seen none of the evidence.

Al-Hanooti worked on and off from 1999 to 2006 as a public relations coordinator for Life for Relief and Development, a Michigan group formed after the first Gulf War to fund humanitarian work in Iraq. FBI and Joint Terrorism Task Force agents raided the charity's headquarters in 2006 but charged nobody and allowed the agency to continue operating.

Prosecutors said Al-Hanooti was responsible for monitoring Congress for the Iraqi Intelligence Service. From 1999 to 2002, he allegedly provided Saddam's government with a list of U.S. lawmakers he believed favored lifting economic sanctions against Iraq.

FOX News' Chad Pergram and The Associated Press contributed to this report.