A FINANCIAL adviser to Saddam Hussein has revealed how the Iraqi dictator channelled hundreds of millions of pounds into secretive offshore companies.

For more than 10 years Elio Borradori, a company trustee in the tax havens of Liechtenstein and Lugano, Switzerland, managed the huge “commissions” and “consultancy fees” from the Iraqi dictator’s arms deals and development contracts.

The money was funnelled into companies controlled by Saddam’s appointees operating through Panama, the Bahamas and Switzerland. It is thought to have partly funded the dictator’s palaces and lavish lifestyle.

Many of the millions moved in and out of an account codenamed “Satan”, which was originally overseen by a relative of Saddam. He was Saad al-Mahdi. But he made the mistake of falling out with Saddam and was executed, possibly for pilfering from the Satan account. A Swiss lawyer took over some of the companies; others went into the hands of Barzan Ibrahim Hasan al-Tikriti, Saddam’s half-brother.

Just before the first Gulf war in 1991 almost £1 billion was moved from Satan and other accounts to be hidden around the world. Italian police last month identified £300m in one account in Geneva.

The network of offshore companies remained active long after United Nations sanctions were imposed on Iraq at the end of the war.

The Sunday Times has uncovered more than 1,000 documents, some of which confirm Borradori’s role. They also provide indications of export deals relating to Dassault and Thomson-CSF, two French arms companies (then state owned), and to Russian firms.

Although many of the documents relate to the 1980s, others suggest activity in the mid-1990s. The material will be a fillip to investigators in Italy, Switzerland and Liechtenstein trying to untangle the web of transactions in the hunt for Saddam’s billions.

Borradori, who said he met Saddam in person several times, retired some years ago to live quietly in Switzerland. But a Lugano court case brought by the al-Mahdi family, and the mysterious death of one of the lawyers involved, revealed documents relating to Saddam’s secret network of companies. Now 75 and living on the southern shores of Lake Lugano, Borradori admitted he was Saddam’s banking adviser.

In the 1970s Borradori was working in Lugano as a trustee for companies in Vaduz, the capital of Liechtenstein. A former cycling champion with a penchant for stylish suits, he was the perfect face of private financial advice: imposing, charming and discreet.

Through a business associate in Italy he was introduced to al-Tikriti, the then head of Iraqi intelligence. Oil prices were soaring and Iraq was on a buying spree. Saddam, then a rising power in the government before becoming president in 1979, was keen to get a share of the multi-million-pound contracts negotiated by the state. Borradori was hired to set up companies as havens for the money.

He met Saddam and was encouraged to expand the network of companies. Once Saddam gave him a bullet engraved with his name. It was meant, Saddam said, to ensure he was never killed, although Borradori thought it carried a more sinister message.

By 1977 the network of companies and number of deals had grown so extensive — with both overt and covert operations — that al-Mahdi was sent to Europe to oversee them, under the control of al-Tikriti, who was then the overall head of Saddam’s financial network.

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