Washington ? President Bush said Friday he would return a campaign donation from an Iraqi-American who had dealings with Iraq’s government under Saddam Hussein.

“Due to the seriousness of the allegations and due to President Bush’s strong positions, we felt it appropriate to return the funds,” spokeswoman Merrill Smith said. Federal Election Commission records show that Assad Kalasho, a businessman from West Bloomfield, Mich., donated $2,000 to Bush’s campaign in July 2003.

A spokesman for Kalasho responded that Kalasho had done nothing wrong and was not the subject of legal investigations. The Detroit Free Press reported Friday that Kalasho negotiated a $16 million deal with the Iraqi government in 2000, when international sanctions prohibited most business dealings with Iraq.

“There is just a lot of innuendo and misinformation,” spokesman Mark Smith said.

The Republican National Committee said Friday it would return a $25,000 check it received from Kalasho in May, spokeswoman Heather Layman said. Sen. Debbie Stabenow, D-Mich., said she would donate the $1,000 she received last year from Kalasho to “an appropriate charity.”

Smith said Kalasho understood the decisions and would continue supporting Bush.

“We’re happy to take the check back and take care of everything on the home front,” Smith said. “We’re not going to allow the campaign to be dragged down into a local issue that has no merit.”