U.S. ‘Looked Other Way’ as Iraq Backed Terrorism in 1980s, Ex-CIA Expert Says : Intelligence: He charges that the decision to leave Baghdad off the official terrorist-state list was ‘a terrible mistake.’

The United States repeatedly turned a blind eye to Iraqi-sponsored terrorism during the 1980s by leaving the nation off its official terrorist-state list, the CIA’s former counterterrorist operations chief charged Tuesday.

“We looked the other way when we knew that Iraq was carrying out a terrorist operation,” said Vincent M. Cannistraro, who retired from the CIA on Oct. 1. He branded the decision to keep Iraq off the terrorist list--a designation that carries economic sanctions--”a terrible mistake.”

A government counterterrorism official who declined to be identified contended that Cannistraro was “stretching things a bit.”

While “we knew they didn’t have completely clean hands,” there was no evidence of terrorism after the end of 1982, the year Iraq was dropped from the State Department listing of specific terrorism sponsorship, he said.

An official of another agency with counterterrorism responsibilities said he would not dispute the retired CIA official’s assessment but would give no specifics.

Cannistraro declined to give details of U.S. knowledge of Iraqi sponsorship of terrorism. Now a senior fellow with the National Strategy Information Center, a nonprofit organization concerned with intelligence issues, Cannistraro formerly held intelligence positions with the National Security Council and the Pentagon in addition to his service at the CIA.

Talking with reporters, Cannistraro said: “There was intelligence information available at various stages that indicated quite clearly that Iraq was involved in the sponsorship of terrorism. This goes over two Administrations,” he added, referring to the Bush and Reagan administrations.

Cannistraro said Iraq was kept off the State Department list because during the Iran-Iraq War the United States considered Iran its principal enemy.

“This was an instance of our using short-term policy interests to confuse our longer-term coherent policy objectives,” he said. “That’s what I’m opposed to.”

Cannistraro’s allegations would indicate significantly greater tolerance of Iraqi misdeeds than earlier known at a time when the United States was trying to cultivate favor with the government of Saddam Hussein.

Earlier, officials have acknowledged that the United States supplied Iraq with military intelligence to use against Iran and later allowed export of some technology that might have military applications.

Until now, there has been no indication that the United States was willing to overlook terrorism by the Iraqis. Iraq was returned to the list of states sponsoring terrorism in September, a month after it invaded Kuwait.

Cannistraro contended that government officials who were monitoring Iraq saw involvement in terrorism “very clearly,” but were undercut by the Iraqi desk at the State Department, which oversees U.S. relations with that nation.

“The country desk would constantly undercut the intelligence information by saying, ‘No, no that’s not valid. You’ve only one source for that,’ ” Cannistraro said. “In other words, there’d be a whole series of rationalizations for why they should not believe that Iraq was involved in terrorism, because it wasn’t in their interest to believe it.

“That’s a major problem,” he added. “We’ve seen that with Iraq, and I think we’re seeing that today with Syria.

“We are now very anxious to cultivate relations with (Syrian leader Hafez) Assad, because from a foreign policy point of view it is important for us to have a larger Arab component in Saudi Arabia. And therefore we’re overlooking some of the really horrible things Assad has done and continues to do,” Cannistraro said.

Turning to the investigation of the Dec. 21, 1988, bombing of Pan Am Flight 103, Cannistraro said the Justice Department “has made substantial progress in identifying the modus operandi by which that bomb got on board.”

He said he thought the department was “very, very close” to obtaining an indictment of those who carried out the bombing of the New York-bound flight from London.

The bombing killed all 259 people aboard and 11 residents of Lockerbie, Scotland.

But a source familiar with the investigation disputed Cannistraro’s timetable, suggesting that he was confusing intelligence information with that needed to support a criminal indictment.

Cannistraro also contended that “there is a lot of evidence that puts the commissioning of the (Flight 103) terrorist incident at the doorstep of the Iranian government. I’m persuaded that that’s true. . . . That’s not to say that the Iranian government implemented it.

“I’m saying that the majority of the ruling members of the Iranian government made a conscious joint decision to commission that,” he said. “It was not a rogue operation. I do not believe that (current Iranian President Hashemi) Rafsanjani was unaware of that decision.”