Germany Was Hub of Iraq Arms Network in Europe

It was the ideal marriage.

On one side, a dictator with a grudge, ready cash and a will to possess unchallenged military power; on the other, a nation with an advanced high-tech industry and a proud tradition of selling to any and all.

That connection, between an array of mainly German companies and the envoys of Saddam Hussein, underpinned a carefully constructed Iraqi purchasing network across Europe that operated for the better part of a decade.

Between the late 1970s and the time alarm bells began ringing in government offices across Western Europe 10 years later, this network had brought Hussein the richest, most frightening harvest of military technology ever assembled by a Third World country.

“The Iraqis operated a substantial front on two levels,” commented Heino Kopitz, former weapons specialist and senior Middle East analyst at the London-based consulting firm Control Risks. “They wanted to maintain their war with Iran, but on the other hand they were looking far beyond that.”

Although the French delivered weapons, the British machine tools, the Swedes trucks and the Belgians protective hangars, the German connection brought Hussein far more: the key ingredients to wage chemical and biological warfare, upgrade ballistic missiles and important components of nuclear self-sufficiency.

The Germans even built Hussein’s personal bunker under the presidential guest house in Baghdad and provided the steel for a 100-foot-high statue of the Iraqi leader that looks out over the capital.

In its early years, the Iraqi purchasing effort operated from Baghdad in a chaotic and ill-directed manner. But by the mid-1980s, like good businessmen anywhere, the Iraqis realized that they needed to move closer to the market.

They set up a de-facto regional coordinating bureau, initially under the name of Meed International, in the narrow streets of London’s fashionable Mayfair. A second company, the Technology and Development Group (TDG), part of the Iraqi Al-Arabi Co., later took over the job.

Carefully, the Iraqis began to invest.

They bought stakes in at least two German trading companies, a Swiss metal-working company and two British machine-tool builders, including the respected Coventry producer, Matrix Churchill.

According to Hans Leyendecker, co-author of “Exporters of Death,” a recently published book that chronicles Germany’s arms trade, some of these investment decisions were made on the advice of British and French management consultants.

Such companies not only brought the Iraqis their own expertise but also provided a layer of legitimacy for Baghdad in establishing its relations with other firms that would later become subcontractors.

The Iraqi Embassy in Bonn, with Hussein confidante Abdul Chabbar Ghani as ambassador, helped coordinate activities between London and a group of about 40 small and medium-sized German companies that eventually became the network’s main suppliers.

Because Hussein was a cash buyer, there was no shortage of suppliers willing to take two to three times the going price for specialty steels or seemingly benign industrial components that were, in fact, small pieces of a carefully constructed arsenal.

The lure of fat profits drew such interest that at one point, two German companies actually went to court to decide who had the right to supply Iraq with, among other things, components now believed to have been used to upgrade Soviet-made Scud-B missiles.

The pillars of European industry such as Germany’s Messerschmitt-Boelkow-Blohm and Gildemeister, Thomson-CSF and Dassault of France and a subsidiary of Italy’s Fiat group, SNIA Techoit, all eventually supplied Saddam Hussein’s Iraq.

Many companies claim that they received tacit encouragement from governments that were leaning toward Baghdad in the bitter Iran-Iraq conflict.

“Everyone was closing their eyes just to get rid of (Iranian leader Ayatollah Ruhollah) Khomeini,” commented Dieter Mueller-Lindemann, a senior official at the German Federal Economics Authority in Eschborn, near Frankfurt, the government office responsible for issuing export licenses. “Now no one wants to admit that.”

Certainly, the backbone of Hussein’s military machine required little finesse to put together. Aircraft, tanks and battlefield missiles were acquired mainly in government-to-government deals with France and the Soviet Union.

France even supported Hussein’s efforts to develop nuclear potential, supplying two research reactors plus 39 fuel elements and 27 1/2 pounds of enriched uranium-235--all dutifully logged with the International Atomic Energy Agency in Vienna.

But Hussein sought more than routine military equipment and research power reactors.

He wanted missiles that would reach Tehran, Tel Aviv and beyond. He wanted the means to wage chemical and germ warfare. He wanted the nuclear bomb. He was ready to pay.

In these critical areas, he turned to Germany.

In many ways, the choice was natural.

Commercial and cultural ties between the two countries have long been strong.

Prominent Iraqis who had once studied in West Germany revived student-day links to build new business partnerships.

Iraqi Lt. Gen. Amer Hamoudi Saadi, for example, who returned from his European studies in the late 1960s with a German wife, is believed to have held overall responsibility for construction of key chemical weapons plants at Samarra and Falludsha and for two important guided missile projects.

All were dominated by West German companies.

East German scientists and technicians are also believed to have provided technical expertise.

But beyond this was the reality that West German industry had what Hussein needed most: top-flight technology in the key areas of precision mechanics, electronics and chemical engineering.

German export controls were also weak.

The German Federal Economic Authority in Eschborn, responsible for enforcing what controls did exist, was a poor stepchild of the Economics Ministry. Hopelessly understaffed, its performance was rated in Bonn more by its ability to process license applications quickly than to catch potential offenders.

“Anyone raising questions was curtly reminded they worked as a part of the Ministry for Economics,” commented a disillusioned German official from outside the ministry, who declined to be quoted by name or position.

Senior officials at the Eschborn authority now believe that even some of the country’s most respected companies knowingly falsified information on export license applications, apparently confident that it would not be followed up.

The authority, for example, routinely issued export approvals to the prestigious Gildemeister machine-tool company, prime contractor for the $1-billion Saad 16 project at Mosul, 175 miles north of Baghdad, accepting the company’s description of the facility as a university research center.

Saad 16 was later assessed to be the most ambitious weapons testing and research center in the Arab world.

“It’s my conviction that the company knew what it was doing,” said Hans-Dieter Corvinus, director of the export-control division at Eschborn.

And so it was that a country whose government policy bans the export of weapons to areas of tension and whose official statistics show that it shipped only $31 million of the $25 billion in arms imported by Iraq during the 1980s, became the pivotal supplier to the most horrific elements of Hussein’s war machine.

The lure of such profits also drew numerous smaller German companies, apparently willing to ignore or deny the reality of their business, for such a onetime economic windfall.

The story of the small trading company near Muenster called H+H Metalform exemplifies part of the Iraqi purchasing network.

Established by two men, Dietrich Hinze and Peter Huetten, who knew Iraq from export work in a previous company, H+H carried out a series of initial contracts by buying manufactured goods and forwarding them to Baghdad.

Confident of their new partner, the Iraqis eventually purchased a 50% stake in H+H. The company’s turnover rocketed.

H+H is suspected of procuring and delivering to Iraq precision machine tools for the production of gas centrifuges for a uranium enrichment facility at Tadshi, just north of Baghdad, and a computerized metals testing facility for such items as tank barrels, missile cladding and grenades.

According to Leyendecker, H+H proved so reliable that it was even asked to provide the steel for Hussein’s statue in Baghdad.

Another small German trading company, Karl Kolb GmbH, is suspected of delivering six nerve-gas plants to the Samarra complex over an eight-year period.

By all reports, the company conducted its business with a mixture of persistence and chutzpah, insistent in its claim that the contract was for pesticides to help Iraqi agriculture.

The law only caught up with Karl Kolb last August, when the Darmstadt public prosecutor’s office took six men into investigative custody on suspicion of violating export-control regulations by delivering a nerve-gas complex.

One man has since confessed and entered a guilty plea, and a trial is expected to open soon against the others, according to Darmstadt prosecutor’s office spokesman Georg Nauth.

Big-name companies also played the game.

Iraqi armored helicopters and key components of about 10,000 Iraqi antitank and antiaircraft missiles were produced by the premier German aerospace company, Messerschmitt-Boelkow-Blohm.

The company also worked as a main subcontractor on the Saad 16 weapons research center and is believed to have assisted Iraq in the development of a medium-range missile.

Yet by working through secondary companies--in some cases large concerns such as French-based Euromissile (in which Messerschmitt-Boelkow-Blohm owns 50%), in other instances with small consulting firms, frequently staffed with a number of former MBB engineers--it built a deniability.

“This company works within the government rules that no weapons are exported to areas of tension,” commented MBB corporate spokesman Willi Vogler. “Every direct delivery to Iraq has been civilian in character.”

Messerschmitt-Boelkow-Blohm helicopters were first shipped to Spain, where they were armor-plated and fitted with weapons before transported to Iraq. The missiles were assembled and shipped from France, and the medium-range missile and weapons development contracts were given over to small companies, along with many of the key MBB personnel.

The depth of the Iraqi-German connection is the latest in a series of revelations that has shaken the government’s traditionally close ties with industry.

As a result, export controls, already tightened last year after a German company was found to have delivered a chemical-weapons factory to Libya, will soon be strengthened further, providing authorities with greater investigative powers and more manpower.

Still, many argue that the new manpower is raw and inexperienced and that a completely new approach is impossible as long as the office remains under the same leadership and within a ministry that promotes exports.

Indeed, in addition to reports that German specialists are helping build a huge underground chemical and nuclear weapons storage center in Libya, it is believed that Eschborn authorities continue to issue licenses for the export of chemical solvents to Libya--solvents that some argue could possibly be used in the production of chemical weapons.

“These shipments are checked very carefully,” noted Corvinus. “Only small amounts are allowed.”