Senate Votes Iraq Penalty for Gas Use : Chemical Attack on Kurds Denied; Debt Financing Periled

The Senate, in a sharp escalation of U.S. protests over Iraq’s alleged use of poison gas against Kurdish insurgents, voted Friday to impose stiff sanctions against the Baghdad regime’s war-ravaged economy.

The measure, which could make it impossible for Iraq to refinance its crushing $60-billion international debt, was sent to the House on a unanimous voice vote less than 24 hours after it was introduced by Sen. Claiborne Pell (D-R.I.), chairman of the Senate Foreign Relations Committee.

Action in the House, where the measure is believed to have substantial support, is likely next week.

Vote Follows Denial

The Senate vote came only hours after Iraqi Minister of State Saddoun Hamadi categorically denied that the Iraqi army has used chemical weapons in its campaign against Kurdish guerrillas fighting for an autonomous homeland in northern Iraq, where they constitute a majority of the population. He described the Kurds as “a small group of terrorists who collaborated with the Iranian invader” during the Persian Gulf War.

Pell accused Iraq of “a campaign of genocide” against the Kurds, however. His bill would impose the sanctions until the President certifies that Iraq has ended its use of poison gas.

An aide to Pell, brushing aside Iraqi denials, said the U.S. government has gathered overwhelming proof that Iraq violated the international conventions barring the use of chemical weapons. He said that if Iraq ceases the use of gas, the proof will be equally easy to obtain.

State Department spokesman Charles Redman, who often criticizes Congress for a heavy-handed approach to foreign policy, welcomed the action by the Senate.

‘Have to See What Develops’

“I think the Congress is concerned, as we are, when chemical weapons are used,” he said. “I think the fact that this is a serious issue means that everyone is going to be looking at what we can do to see if we can’t stop this use of chemical weapons. So we’ll have to see what develops.”

Admission Not Required

He said Hamadi’s denial did not change the Administration’s conclusion that Iraq had used poison gas. The Iraqis, he added, could repair the damage to the Washington-Baghdad relationship by discontinuing the use of chemical weapons. He indicated that it would not be necessary for Iraq to admit its previous actions so long as it did not repeat them.

Redman said Secretary of State George P. Shultz, who met with Hamadi on Thursday night, “made very clear that this issue of chemical weapons is of sufficient importance that the Iraqi authorities need to weigh it very carefully in their decision making, because of the impact it can have on our relationship.”

Redman said it would be “a good starting point” for Iraq to promise not to use poison gas. Hamadi did just that at a news conference, but he coupled the pledge with a denial that Iraq had used chemical weapons in its current campaign against the Kurds, an assertion that the U.S. government clearly does not believe.

Hamadi, whose trip to the United States to discuss the Iran-Iraq peace talks in Geneva was swamped by the controversy over chemical warfare, said Shultz produced no evidence to support the charge of poison gas use. But he said that Iraq would “study carefully” Shultz’s blunt warning Thursday that there is no chance for improvement in Washington-Baghdad relations as long as Iraq continues to use poison gas.

‘No Evidence at All’

“No evidence was provided to us,” Hamadi said. “We have seen no evidence at all.”

The State Department has declined to spell out the proof because to do so might reveal intelligence sources and methods. But a cable from the U.S. Embassy in Turkey reported that two U.S. diplomats who visited the Iran-Turkey border area observed Kurds who were clearly the victims of chemical attacks.

“Most refugees had blistering, oozing sores around noses and mouths,” the cable, obtained by United Press International, said. “Additional similar wounds were noted and photographed on hands, feet and other exposed tissue. All agree that those exposed to gas suffer from breathing problems and inflamed eyes. Many are having difficulty maintaining balance, while vomiting and diarrhea are near universal. Most victims report dizzy spells and periods of hallucination.”

(However, in Ankara, wire services Friday quoted the Turkish Foreign Ministry as saying that it found no evidence of chemical weapons use when it screened the sick and injured among 60,000 Kurdish refugees who fled across the border to escape Iraqi bombings.)

Hamadi said Iraq wants to continue a warming trend in its relations with the United States despite the latest controversy. Asked if Iraq is angry because the Reagan Administration accused it of war crimes, Hamadi replied, “Of course we wish that this (statement) did not take place on the part of the American government, but we will study the matter carefully and see where we come out.”

U.S. Could Veto Project

Pell’s bill requires the United States to vote against international loans to Iraq. Under the weighted voting system used by the World Bank and most other international lending organizations, U.S. opposition is usually enough to veto a project.

An aide to Pell said Iraq’s international debt is about $60 billion, one of the highest per-capita debts in the world--more than $2,000 for every man, woman and child in the country. U.S. opposition could make it impossible for Iraq to refinance those loans when they come due.

The measure also would bar all U.S. financial credits or guarantees to Iraq, prohibit the importation of Iraqi oil, ban U.S. economic or military aid and block the transfer of high-technology items. Iraq currently receives about $200 million in U.S. Export-Import Bank credits. However, the United States buys very little oil from Iraq and does not provide any military or economic aid to the Baghdad regime.