Despite Warning, U.S. OKd Sale of Missile Parts to Iraq : Technology: Baghdad cleared the deal by saying the sophisticated relays were for civilian use.

The Bush Administration allowed a New Jersey company to export $1-million worth of precision electronic parts to Iraq in 1989, even though the American businessman who negotiated the deal informed three U.S. government agencies that the devices could be used in ballistic missiles.

But, Ronald Waugaman said, government officials told him that as long as the “end user”--the Iraqi State Electrical Ministry--stated a civilian use on the export application, there was no problem with the shipment.

Significantly, there is no record of this sale on a Commerce Department list of $1.5 billion of government-approved exports to Iraq from 1985 to 1990 subpoenaed by a House of Representatives subcommittee, according to persons familiar with the list.

Critics of the government’s handling of export licenses to Iraq say this indicates that other exports with potential military use may not have been revealed.

A congressional source said that questions about the sale will be asked today at a hearing of the House Banking, Commerce and Urban Affairs Committee.

Waugaman said he told the Commerce and State departments and the Customs Service that the Iraqis required that time-delay relay systems sold by Struthers Dunn Inc. of Pitman, N.J., perform at 350,000 feet--66.3 miles--above the Earth.

“When I heard 350,000 feet, I thought missile,” said Waugaman, then a Struthers Dunn vice president who is now an executive at a California electronics company. While time-delay relays have a number of commercial uses, this type of state-of-the art relay is commonly used to initiate stage separation for ballistic missiles, according to experts. Waugaman said the devices were modified and “tested for shock and vibration” to ensure that they could perform at the extremely high altitude.

Waugaman said he relayed his concern to Michael Manning, who reviews export licenses for the Commerce Department at its Trenton field office.

“I told them they have a requirement for military grade specifications . . . a higher degree of accuracy than required for a tank. . . . I said they’re not putting tractors 350,000 feet in the air.”

But the Iraqi ministry told Waugaman that the “end use” was “heavy industrial use.” Waugaman said that U.S. government officials then told him that if a civilian end use was stated, there was no reason to bar the export.

Thomas Cleary, Struthers Dunn’s president, confirmed Monday that the relays were sold to Iraq in 1989 and 1990 but declined to provide further details.

At the time of the sale, the Iraqis were in the process of developing long-range missiles considerably more sophisticated than the Scuds used in the Persian Gulf War.

Stephen D. Bryen, former director of the Pentagon’s technology security office, said that once government officials were informed of the 350,000-foot specification, they should have launched a detailed investigation.

“The clear implication is this is a long-range, multistage rocket system, with components specially designed,” Bryen said. He said the fact that such a sale could have been consummated without a detailed review is “bizarre.”

Gary Milhollin, director of the Wisconsin Project on Nuclear Arms Control, said the sale added a new dimension to earlier revelations about massive exports to Iraq of so-called dual use items, which have both civilian and military applications. He said the sale demonstrates the need for a full congressional review of export policy.

A spokeswoman at the Commerce Department in Trenton said Manning was out of the office and not available for comment. Mildred Cooper, a Commerce spokeswoman in Washington, said the department would not comment on individual sales because of a law prohibiting disclosure of the names of exporters.

A source at the State Department, speaking on condition of anonymity, said he was not familiar with the relay deal but said it sounded unusual. “I’m surprised that with this kind of altitude, someone would have said ‘That’s fine,’ unless they felt the rules would not allow prohibiting the export,” he said.

A Customs investigator said the agency had reviewed the sale late last year after it had been brought to its attention by a San Diego businessman who had heard about it from Waugaman at a trade show. He said that nothing had been discovered that would give rise to a criminal charge being filed and that by the time the agency’s investigators got involved, all the goods had been shipped.

Meanwhile, in Washington on Monday, a Commerce Department undersecretary, Dennis Kloske, told a congressional subcommittee that his department began advocating an embargo on the sale of advanced dual-use technology to Iraq early last year but was repeatedly blocked by the State Department, which secured White House concurrence. He said he urged the embargo because he was concerned that Iraq could use such equipment in its nuclear, biological and chemical weapons programs.

Rep. Sam Gejdenson (D-Conn.) said Kloske’s testimony showed that the State Department bears most of the blame for “the arming of Saddam Hussein’s military.”

But a State Department official, speaking anonymously, said the hearing had been “orchestrated” to portray the Commerce Department in a favorable light.

Times staff writer Michael Ross, in Washington, contributed to this story.