Will the Iraqgate scandal unravel before Election Day


Washington -- Shirt-sleeved in the White House, Larry King told President Bush on CNN that "Senator Gore and William Safire are getting into what they call I guess we're calling it Iraqgate.

(Pundit's Note: I am not Gore's running mate. For different reasons, he and I have taken an interest in Bush's misuse of U.S. grain export guarantees as backdoor foreign aid to uncreditworthy Saddam Hussein in 1989. This wrongdoing, compounded by the deception of Congress and covered up by the unlawful obstruction of the investigation into Iraq's multibillion-dollar Atlanta bank fraud, has come to be known as Iraqgate.)

"What happened was," said the president about the unfolding scandal, "they had an illegal diversion of materials that would have helped them build a nuclear capability ..."

That's news. For years, I have been suspecting in print, and Alan Friedman of The Financial Times has been charging on Ted Koppel's "Nightline," that Iraq was using our guarantees to borrow the money to buy grain that was loaded onto ships and then diverted to other countries in barter for the technology enabling Saddam to develop nuclear weapons and missiles.

Now we have confirmation of that dangerous game in which the U.S. taxpayer lost billions from the Highest Authority. Unless the president has taken to believing everything he reads in this space, he presumably learned of that rip-off from information supplied him by the CIA or the Department of Agriculture. Until now, those agencies have been publicly denying any knowledge of grain diversions to help arm Saddam.

President Bush, having finally spilled the beans under the savage cross-examination of Larry King, takes refuge in having been an innocent dupe: "But to allege that we were building up his arms, or building up his nuclear power knowingly, is simply fallacious."

By "fallacious," Bush means either "erroneous" or "deceptive." Can he be asserting that we are mistaken in our judgment that the U.S. government knew of the Iraqi arms buildup in 1989 and 1990?

That assertion is patently absurd: Bush's Department of Energy warned in writing at the time of Saddam's nuclear planning. His Department of Commerce eagerly approved the shipment of dual-use technology to Iraq, and has admitted later altering documents that proved it.

In Atlanta, U.S. District Court Judge Marvin Shoob found this week "it is likely that the United States intelligence agencies were aware of BNL-Atlanta's relationship with Iraq. The CIA continues to be uncooperative ..."

After failing to scare off House Banking chairman Henry Gonzalez, the CIA. tried to mislead the court by minimizing its early knowledge of the scandal. Prodded by Senate Intelligence, the CIA inspector general is preparing his own whitewash.

Two inescapable facts: (1) Bush knew we were guaranteeing loans at unacceptable risk to a borrower who our Federal Reserve and Treasury warned would only repay upon receipt of larger loans, and (2) he knew that Saddam was using the money, or bartering our grain, to buy and develop weapons of mass destruction.

There is no running away from that, no possible loopmanship: the president directed that Saddam get the money knowing of his arms and technology purchases, some from U.S. companies. Bush knew we were giving Iraq money and he knew Saddam was buying arms. Thus, knowingly is far from "fallacious"; it is indisputably true.

To throw dust in the public's eyes, Bush descended to campaign mode. He slyly suggested that his opponent, the governor of Arkansas, was equally guilty: "Do you know who wanted to make loans, grain-credit loans, and got hold of Mr. Hamdoon, the Iraq ambassador, on grain credits? Governor Clinton. Ask him ..."

It turns out that the Iraqi ambassador paid a short courtesy call on Clinton while making a speech in Little Rock. The president of the United States, by personally trying to equate that with his own direct involvement in equipping Saddam Hussein and having his ex-CIA colleague, now the attorney general, refuse to allow independent counsel to investigate Justice's obstruction of justice shows what sort of desperate state he is in.

The Iraqgate cover-up is unraveling. In trying to conceal a blunder, real crimes have been committed.

William Safire is a New York Times columnist.

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