U.S. Stalls Loan to Nevada Firm Over Iran Rocket Fuel

Times Staff Writer

U.S. officials held up a $92-million, federally financed loan for a Nevada chemical firm Thursday after learning that the company was linked to an apparent attempt to export a rocket fuel ingredient to Iran.

Rep. Robert A. Roe (D-N.J.), chairman of the House Science, Space and Technology Committee, said that National Aeronautics and Space Administration chief James C. Fletcher agreed to freeze the loan request after being told that rocket fuel oxidizer from the firm was seized aboard an Iranian freighter in the Dutch port of Rotterdam last year.

Roe also said that Brent Scowcroft, President Bush’s national security adviser, had expressed concern that a federal judge soon may release the chemical shipment, which is impounded. The release might enable Iran to equip an estimated 300 missiles with the scarce propellant.

A spokesman for Scowcroft said Thursday that, after meeting with Roe, Scowcroft had “agreed to look into the issue and is doing so.” The national security chief is “gathering additional information,” spokesman Bill Harlow said.


The chemical shipment has become the center of a 14-month saga of bureaucratic in-fighting and mix-ups pitting the U.S. Customs Service against the State and Justice departments and leaving other key agencies--NASA, the Pentagon and Commerce Department--in the dark.

The chemical firm under fire is Pacific Engineering & Production Co. of Henderson, Nev., which--until its plant blew up in an accident last May--was one of only two domestic sources of the oxidizer, ammonium perchlorate, which is used for U.S. spaceships and missiles.

The government, facing a scarcity of the rocket fuel component, tentatively had agreed to finance reconstruction of the plant by repaying private bank loans through purchases of the chemical.

Roe’s actions followed letters written by House Armed Services Committee Chairman Les Aspin (D-Wis.) to both President Bush and Secretary of State James A. Baker III, urging that the seized shipment be kept impounded.

In meetings with Scowcroft and Fletcher on Thursday, Roe and two aides displayed new evidence which, they claim, links the company to the disputed shipment. The evidence is in the form of a videotape taken by a Nevada television station, depicting shipping drums at the Pacific Engineering & Production plant before it was destroyed in last year’s accident.

The labels on the drums suggest that the firm had some commercial connection with the company that placed the oxidizer on the Iran-bound ship.

In February, 1988, Dutch police, acting on a tip from U.S. Customs officials, seized 286,000 pounds of the chemical manufactured by Pacific Engineering from a Iranian-registered ship, the Aladat, bound for the port of Bandar Abbas in Iran. The shipment had been owned by a West German firm, D. A. Dampf.

Officials of Pacific Engineering have denied any knowledge of how the chemical got to that point, saying that they sold it to a U.S. firm, Girindus Corp. of Tampa, Fla. Officials of Girindus also have denied any knowledge of a plan to ship the chemical to Iran, insisting in a lawsuit seeking return of the chemical that they had sold the chemical to a Swiss company, Inter-Commerce Truehand, Handels & Franz.


But the videotape, according to Roe, shows the drums at Pacific Engineering’s plant labeled with D. A. Dampf’s name, suggesting that the firm may have known from the beginning that the German company was the eventual recipient of the chemical.

In the videotape, reporter Cathy Hanson of WTNV, Las Vegas, is shown interviewing Keith Rooker, president of Pacific Engineering & Production. Rooker says on the tape that the firm had never shipped oxidizer to Iran and did not know where Girindus shipped the chemical. He said he had never heard of Dampf.

However, when confronted with evidence of the Dampf-labeled drums, Rooker says after a lengthy pause: “Wait a minute, I seem to remember something now. At one point, the Girindus Co. sent us back a lot of ammonium perchlorate, and that may be the lot you’re speaking about.”

Charge ‘Totally Unfounded’


Informed by the interviewer that two of his firm’s workers had said that they had applied the Dampf labels to the drums, Rooker replied that that is “totally unfounded.”

Rooker could not be reached for comment Thursday.

Girindus’ lawsuit is pending before U.S. District Judge Sim Lake in Tampa, Fla., who ruled two weeks ago that the shipment had been illegally impounded because the State Department had issued an export license for it. He said that the government had offered no evidence of any diversion to Iran.

But the judge set another hearing for Monday after the Customs Service filed a countersuit, demanding that the shipment be forfeited to the government on grounds that the listed destination was false.


The State Department has rejected a request by Customs Commissioner William von Raab that the export license be withdrawn. According to the Customs Service, the State Department contended that the license was valid because the chemical was not scarce when it was originally issued.