Documents portray U.S. eagerly courting Iraq Administration's role comes into question


WASHINGTON -- Nearly two years after Saddam Hussein triggered the largest U.S. military conflict in a generation, Congress is demanding to know more about the Bush administration's role in helping the Iraqi leader strengthen his war machine and pursue his dream of building a nuclear bomb.

A half-dozen separate investigations are under way on Capitol Hill, all laden with political implications and uncertain consequences in this election year. The House Judiciary Committee plans to meet Tuesday to consider whether an independent counsel should be appointed to investigate possible criminal wrongdoing by high-level administration officials.

Dozens of classified documents already obtained by Congress indicate that President Bush doggedly pushed for a risky, some say misguided, policy to help Iraq long after evidence began to mount that it was misusing U.S. technology and financing agreements to increase its military power.

The investigations have drawn a picture of an administration eagerly courting Iraq's favor. It pushed so hard for expanded exports that Commerce Department records were later altered to conceal from a suspicious Congress the true nature of U.S. sales to Baghdad. Warnings about Iraq's nuclear weapons program also were ignored.

Moreover, administration officials extended more and more loan guarantees despite signs that Iraq would never repay the money and was indirectly using the loans to buy military hardware.

In addition, only months before the Persian Gulf war, top officials brushed aside repeated Pentagon warnings of an Iraqi military buildup to send $1 billion more in financial aid and additional shipments of high technology exports to the oil-rich nation.

While some Republicans blast Democrats for embarking on an election-year "witch hunt" to embarrass Mr. Bush, others, such as Republican Sen. Richard G. Lugar of Indiana, believe that the administration must provide a fuller accounting of its actions, if only to dispel the public impression it has something to hide.

Those who are calling for full disclosure of past U.S. support for Iraq argue that the gulf conflict might ultimately cost Americans more than the $7.4 billion and the lives of 146 U.S. combat personnel that were lost during the war. Taxpayers might also have to pay another $2 billion to cover debts incurred by Iraq during its prewar U.S. shopping spree.

"Saddam Hussein is President Bush's Frankenstein, a run-of-the-mill dictator the president fed with billions of U.S. taxpayer dollars and turned him into a monster," Rep. Charles E. Schumer, a New York Democrat, said at a recent hearing.

Top officials, including Deputy Secretary of State Lawrence S. Eagleburger, readily acknowledge that their policy failed to achieve its goal of moderating the Iraqi leader's behavior. But they vigorously deny that laws were broken by either the Reagan or Bush administrations during a largely secret, eight-year campaign to aid Iraq.

The tenacity of congressional Democrats in the coming months could spell nothing but trouble for the Bush re-election campaign. Former Commerce Secretary Robert A. Mosbacher Sr., now the Bush campaign chairman, and former Agriculture Secretary Clayton K. Yeutter, now the White House domestic policy chief, could find themselves testifying under oath about their decisions to help Iraq.

Questions already are being raised over the administration's decision in November 1989 to approve $1 billion in new loan guarantees to Iraq. That action followed a call by Secretary of State James A. Baker III to Mr. Yeutter urging his department to up its decision to offer $400 million in credits.

A month earlier, Iraqi Foreign Minister Tarik Aziz had warned Mr. Baker that relations would "sour" if the United States failed to extend the full $1 billion in loan guarantees proposed earlier by Mr. Bush.

Four days before the Baker-Aziz meeting, Mr. Bush signed National Security Decision Directive 26, a secret document ordering U.S. government agencies to strengthen political and economic ties with Iraq "to moderate its behavior and to increase our influence with Iraq."

In his public comments so far, Mr. Bush has defended only his role in the Reagan administration's policy to aid Iraq. "As you may remember in history, there was a lot of support at the time for Iraq as a balance to a much more aggressive Iran under [Ayatollah Ruhollah] Khomeini," he told reporters in February.

But in the early 1980s, the tilt toward Iraq sometimes went too far, several current and former Defense Department officials said in interviews. Warnings about questionable exports went unheeded, and in 1985 the White House limited the Pentagon's authority to block sales to Iraq.

"The Pentagon was being ignored," complained an official who insisted on anonymity. "The Commerce Department overrode the Pentagon, sometimes without even letting us know."

Stephen Bryen, deputy undersecretary of defense for trade security policy during the Reagan years, said that by early 1987, Pentagon officials who tried to deny licenses were being accused by others in the government of being obstructionists.

After Mr. Bush became president, those opposed to selling high-tech gear to Iraq became even more frustrated, according to present and former government officials.

"It was a new team that had less inhibitions, and they were in aggressive pursuit of Saddam," said Mr. Bryen, who became an outspoken critic of trade with Baghdad after leaving the Pentagon in 1988. "The war with Iran was over. . . . There was no strategic reason to back Saddam. This was just appeasement. They thought they could buy him."

Commerce records show that the department approved 771 export licenses to Iraq between 1985 and 1990 at a total value of $1.5 billion. At least 82 of those licenses were for high-tech equipment with both civilian and military applications that ended up with the Iraqi Air Force, the defense ministry, the Iraqi director general for security and Iraqi Airways, which had close military ties.

In addition, 18 export licenses were approved between 1985 and 1989 that involved shipments to Iraq of toxins and bacteria that could be used in the manufacture of biological weapons, including six transactions with the Iraq Atomic Energy Commission, records show. After February 1989, when the State Department imposed controls on the export to Iraq of biological agents, all similar export license applications were denied.

In the late summer of 1988, despite reports that Iraq had gassed thousands of Kurds, Paul Freedenberg, who oversaw export licensing for the Commerce Department, says he was informed by the National Security Council at the White House to "stick with present policy. The NSC didn't want special controls on Iraq after the attacks on the Kurds."

Records show that on Sept. 13, 1988, the Commerce Department approved the sale of navigation, radar and airborne communications equipment to the Iraqi Defense Ministry.

"Iraq wasn't an issue," said Mr. Freedenberg, who left government in 1989. The administration was much more concerned with the Soviet bloc and possible resale of hardware to its armies.

Marshall Wiley, a lobbyist who promoted U.S.-Iraqi trade, said that Bush officials saw expanded business with Iraq "as an opportunity."

"Iraq was the largest untapped market in the Middle East," Mr. Wiley said. "From everyone's point of view, it was the intelligent thing to do."

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