Attempted Cover-Up of Aid to Iraq to Be Probed : Congress: Panels to investigate Administration’s efforts to restrict access to data on assistance to Hussein.

When Congress tried to investigate billions of dollars in U.S. aid and technology sales to Iraq, the Bush Administration sought to restrict access to key records and minimize information given to committees, according to confidential documents and interviews.

The actions reflected longstanding efforts by the Administration to keep Congress from learning the extent of U.S. assistance to the regime of Saddam Hussein in the years and months leading up to Iraq’s invasion of Kuwait.

In many cases, classified documents show that President Bush played a personal role in providing that aid, both as vice president in the Ronald Reagan Administration and later as President.

Now that details of the assistance have become known, the shape of the congressional response also is beginning to emerge. Among the inquiries:

* The Senate Agriculture Committee plans to look into whether its members were misled by Administration officials on the Iraqi aid, according to committee aides.

* Rep. Henry B. Gonzalez (D-Tex.), chairman of the House Banking Committee, has asked the General Accounting Office, an investigating arm of Congress, to investigate whether the Export-Import Bank violated its charter by approving loan guarantees for Iraq in 1984 and 1987 after intervention by Bush, who was then vice president.

* The House Banking Committee, in hearings set to begin April 3, plans to seek testimony from officials at agencies belonging to the National Advisory Council, the interagency group where loan guarantees for Iraq were debated and approved.

The Times has reported that in October, 1989, nine months before Iraq invaded Kuwait, Bush signed a top-secret directive ordering closer ties with Baghdad and opening the way for $1 billion in loan guarantees to finance the purchase of U.S. agricultural products by Iraq. Officials in the Agriculture Department and other agencies objected to granting Iraq the loan guarantees but were overruled after Secretary of State James A. Baker III telephoned Clayton K. Yeutter, then secretary of agriculture, and asked for the aid “on foreign policy grounds,” according to classified documents.

When questions were raised about these and other matters related to Iraq, however, the Administration took steps to limit the amount of information it provided to Congress.

In one confidential memo, dated April 8, 1991, C. Nicholas Rostow, special assistant to President Bush and legal adviser to the National Security Council, wrote that “alternatives to providing documents should be explored.”

In the memo, Rostow instructed agencies involved in assisting Iraq to offer verbal briefings to members of Congress rather than to hand over documents, and he proposed several justifications for withholding information.

In some cases, members of Congress say they believe the Administration concealed critical information about agricultural loan guarantees and exports of sensitive technology to Iraq.

“The Agriculture Department clearly misled me and my subcommittee,” said Rep. Charlie Rose (D-N.C.), chairman of a House Agriculture Committee subcommittee. “Clearly, there was pressure at the highest levels of the Bush Administration to see that Iraq got continuing and large amounts of loan guarantees, although the Administration knew there were abuses and kickbacks.”

Rose said his subcommittee plans hearings to question Administration officials about behind-the-scenes efforts by the White House and the State Department to retain Agriculture Department loan guarantees. The guarantees were made over objections from other federal agencies and amid evidence of abuse by Iraq.

The Senate Agriculture Committee will open its own investigation into whether its members were not given the full story by the Administration.

“I am very concerned that in an effort to cover up its secret dealings to aid Saddam Hussein, the Administration refused to tell the American people the truth,” said Senate Agriculture Committee Chairman Patrick J. Leahy (D-Vt.). “At a time when Saddam Hussein was expanding his military operations, the Administration ignored its own experts and used taxpayer money to secretly help Iraq.”

Leahy said late last month he may have been misled when Yeutter assured him in a February, 1990, letter that there had been no foreign policy considerations in a controversial $1-billion aid package for Iraq in late 1989.

“The answer from the secretary of agriculture was that they weren’t being pressured,” Leahy said. “It would appear, indeed, they were being pressured.”

Leahy has asked the GAO to assist in his committee’s inquiry. Sources close to the committee said that it has not been decided whether to seek testimony from Yeutter, now President Bush’s chief domestic policy adviser.

Gonzalez, the House Banking Committee chairman, also indicated last week that he plans to look into any foreign policy pressures involved in Agriculture’s loan-guarantee program, known as the Commodity Credit Corp.

“Because the CCC lacked tough standards for granting credits, the Administration found it easy to use the CCC program for Iraq as a foreign policy tool at the expense of the U.S. taxpayer,” Gonzalez said.

At numerous points, Administration officials testified before Congress and provided documents claiming that the CCC program was not influenced by foreign policy.

For instance, in his 1990 letter to Leahy, Yeutter wrote: “You mentioned that there were ‘rumors’ that foreign policy pressures have encouraged the department to give Iraq special treatment in this case. To the contrary, the extension of guarantees in connection with sales to Iraq have recently been subject to special scrutiny.”

On June 15, 1990, Assistant Secretary of State John Kelly testified before the Senate Foreign Relations Committee in opposition to a bill to impose sanctions on Iraq in response to its poison gas bombardments of Iraqi Kurds and Hussein’s threat to burn half of Israel.

“Regarding our agricultural programs, U.S. policy in both this Administration and in the previous one has been not to single out farm exports as a tool of foreign policy,” said Kelly, who has since left the State Department.

Some congressional investigators said they believe there was a deliberate effort to mislead Congress about the extent and nature of U.S. aid to Iraq.

The Justice Department has confirmed that it is conducting a preliminary inquiry into alterations that were made to a list of export licenses granted to Iraq.

A congressional staff probe and an internal investigation by the Department of Commerce discovered that military designations on some of the technology had been removed from the list provided to Rep. Doug Barnard Jr. (D-Ga.), chairman of the Government Operations Committee subcommittee, which was conducting the inquiry.

“I believe that it is a crime to knowingly supply false information to Congress,” Barnard wrote to the Justice Department in requesting the investigation.

Rostow, the NSC legal adviser, and Stephen Rademaker, another NSC official, supervised the compilation and transmittal of the list to Barnard’s subcommittee, according to two Administration officials familiar with the preparation of the material.

The preliminary Justice Department probe has found no evidence to indicate that the two officials were aware of the alterations, said the sources.

Rostow and Rademaker referred calls to the White House. An official there said the two NSC officials were not aware of any alterations to the list. The official said the two NSC officials “barely remembered the list because it was so mundane.”

Confidential documents obtained by The Times show that Rostow supervised preparation of the responses to Gonzalez’s committee and Rose’s subcommittee. The documents show that he presided over interagency meetings on crafting responses on April 8, 9 and 15, 1991. C. Boyden Gray, the President’s legal counsel, participated in at least two of the meetings, according to the documents.

After the April 8 session, Rostow sent officials a memo outlining how to respond to the congressional requests and specifying that the NSC would supervise the process.

“Department general counsels should review and inventory all requests to determine which, if any, raise issues of executive privilege,” wrote Rostow, adding several grounds on which requests could be refused or restricted, such as national security and foreign relations.

“Alternatives to providing documents should be explored (e.g. briefings),” he wrote.

An April 17, 1991, memo to the secretary of agriculture from the department’s general counsel recounted a meeting on April 15. It said Rostow was to be in charge of the decision-making on which documents would be provided to congressional investigators.

“It was also noted that the objective is to cooperate with Congress while also ensuring that appropriate protections are accorded to deliberative materials,” said the memo by Alan Charles Raul, general counsel at the Agriculture Department.