Baker Questioned on Aid to Iraq, Defends U.S. Policy : Congress: He tells House panel economic and technological assistance was intended to moderate Hussein’s behavior.

Secretary of State James A. Baker III was questioned sharply in Congress on Thursday about recent disclosures that the Bush Administration continued aid to Iraq even as Baghdad’s hostile intentions became more pronounced in the weeks before its invasion of Kuwait in 1990.

Baker defended the Administration’s policy, echoing President Bush’s earlier contention that U.S. economic aid and sales of sensitive technology were intended to moderate the behavior of Iraqi President Saddam Hussein. Baker also said the policy was set down by a secret presidential order that Bush issued in October, 1989.

The policy “was to use economic incentives to try and moderate Iraqi behavior and, if possible, to get them to support the peace process,” Baker testified before the House Foreign Affairs Committee.

But under questioning by Rep. Mel Levine (D-Santa Monica), Baker acknowledged that the strategy was a failure.

“That policy didn’t work,” said Baker. “And with 20-20 hindsight, if you’d known that they were going to invade tiny little Kuwait, obviously, you would have pursued a different policy approach.”

The secretary of state downplayed the significance of Saudi Arabia’s transfers of U.S. military equipment to Iraq in 1986 and Syria and Bangladesh in 1991, following the end of the Persian Gulf War. All three instances, Baker said, were inadvertent actions by the Saudis.

Baker testified that he did not know the details of the transfer of an undisclosed number of 2,000-pound American bombs to Iraq by the Saudis. But he maintained that the Syrians and Bangladeshis had received only “non-lethal” trucks.

Sources have told The Times, however, that the Syrians were provided with armored trucks and Bangladesh received armored personnel carriers.

The Times also learned Thursday that the Senate Foreign Relations Committee has asked the State Department for a full report on the transfers of U.S. military goods by the Saudis.

In a letter to Baker, Sen. Claiborne Pell (D-R. I.), committee chairman, sought details about the specific incidents and asked for a review to determine whether other transfers had occurred. Pell also called the Administration’s disclosure of the episodes to Congress “belated and incomplete.”

Federal law requires the Administration to notify Congress immediately when it learns that U.S. military goods have been transferred to another country. Congress was not told of the Saudi transfers to Syria and Bangladesh until March 2, a year after the actions occurred.

On Wednesday, Rep. Henry B. Gonzalez (D-Tex.) took the unusual step of asking Bush to provide the House Banking, Finance and Urban Affairs Committee with all White House documents related to the National Security Council’s involvement in the investigation of the Banca Nazionale del Lavoro scandal in Atlanta and the Agriculture Department’s $5-billion food aid program for Iraq.

“The committee would like to better understand the role the White House and NSC played,” Gonzalez, the committee chairman, wrote in a letter to Bush.