Flaws in U.S. Export Policy Helped Iraq, Report Says : Technology: The Commerce Dept. is singled out. A House panel calls for an agency to oversee sales.

Charging that a breakdown in regulating U.S. exports helped Iraq develop its war machine, a House committee Wednesday advocated creating an agency to license the sale of sensitive American technology to foreign countries.

Authority for regulating exports now rests with several federal agencies, resulting in what a committee report said is interagency bickering and divergent motives that weaken export controls.

The report, adopted Wednesday by the House Government Operations Committee, was most critical of the Commerce Department. It claimed that the department’s desire to increase U.S. exports led it to approve questionable sales to Iraq over Defense Department objections and without consulting other agencies.

“Commerce’s poor coordination and institutional bias to promote exports likely combined in the case of Iraq to allow the sale of technologies that may have helped that aggressor nation’s missile and nuclear, chemical and biological weapons development programs,” said the report, prepared by the panel’s subcommittee on commerce, consumer and monetary affairs.

Rep. Doug Barnard Jr. (D-Ga.), the subcommittee chairman, said an independent agency should be set up to assure a consistent export policy for sensitive technologies and equipment. The agency also would help streamline the licensing process for businesses that rely heavily on export sales, he said.

In March, Commerce released documents showing that, from 1985-90, it approved 771 export licenses to sell Iraq $1.5 billion worth of dual-use goods--those that have both military and commercial uses.

“Some of these sales involved technologies that very probably helped Saddam Hussein develop ballistic missiles and chemical and nuclear weapons,” the report said.

One example cited was approval for a New Jersey firm to sell Iraq furnaces that can be used to cast highly enriched uranium for nuclear bomb cores and to melt titanium for fabricating ballistic missile components. The report said Commerce did not inform the Defense Department of the sale and that it was stopped only at the last minute by a presidential order.

In two other cases cited, Commerce approved the sale of machine tools and lasers that may have been used to improve Iraq’s Scud missiles.

Attempts to reach Commerce officials for comment were unsuccessful. In the past, the agency has defended its export policy as legal.