High-Tech Aid Flowed as Iraq Built Up Forces

For two years before the Persian Gulf War, U.S. intelligence agencies issued a series of warnings describing efforts by Iraq to develop nuclear weapons, ballistic missiles and other sophisticated weapons, according to documents and interviews.

Despite the repeated warnings, however, the Bush Administration resisted efforts to stanch the flow of U.S. economic assistance and militarily useful technology to Iraq, believing Baghdad could be controlled better with the carrot than the stick.

Iraq invaded Kuwait on Aug. 2, 1990, and in a post-invasion memo, an assistant secretary of state complained that “no one was paying attention” to Iraq’s ominous arms acquisition program. But other documents and interviews with sources show that U.S. intelligence analysts were well aware of the strategy and the concerns were passed up the ladder.

“The intelligence guys reported what they saw,” said a federal official familiar with the reports. “The policy decision was made to ignore it.”

Previously undisclosed intelligence documents and recently declassified records provide the fullest account yet of the extent of the Administration’s knowledge of the worldwide procurement network established by Iraqi President Saddam Hussein to acquire technology for nuclear, chemical and biological weapons.

The alarms go far beyond a disputed State Department memo highlighted at last week’s hearing of the House Judiciary Committee on whether to seek an independent counsel. They raise new questions about whether the Administration should have modified or abandoned its policy of placating Iraq.

“The policy was wrong,” Rep. Henry B. Gonzalez (D-Tex.), a fierce critic of the Administration’s Iraq policy, said at a recent congressional hearing. “It was pursued despite warning signs and despite Hussein’s well-known brutality, and it failed.”

Among the new elements in the still-emerging picture:

* As early as January of 1989, congressional committees were briefed by intelligence officers about Iraq’s attempts to acquire nuclear-weapons technology, according to one participant in the sessions.

* In the spring and summer of that year, intelligence reports raising alarms over the Iraqi arms procurement network were circulated within the Administration, according to knowledgeable sources and reviews of documents.

* In November, 1989, intelligence experts told Administration officials regulating nuclear exports that Iraq was using front companies to obtain nuclear technology and diverting technology from commercial purposes to military projects, according to a recently declassified State Department report.

Yet that same month, the State Department and National Security Council combined to push through $1 billion in loan guarantees for Baghdad. And three months later, an assistant secretary of state complained in a memo that restrictions on the sale of nuclear-related technology were “a drag on trade with Iraq.”

* Although several U.S. law enforcement agencies have responsibilities for policing the export of militarily sensitive material to foreign countries, a top federal law enforcement official said CIA reports on the Iraqi arms network were not shared with the U.S. Customs Service until after the invasion of Kuwait.

President Bush and senior Administration officials now acknowledge that trying to influence Iraq with aid was a mistake, though Bush has strenuously denied that the United States did anything to enhance Iraq’s nuclear or chemical warfare capabilities.

While Administration officials say they were concerned in 1989 and 1990 about Iraq’s nuclear program, they say they continued to provide “prudent” assistance to Baghdad because doing so offered the best hope for moderating Hussein’s behavior.

“It is easy to defend a policy that works. It’s not so easy when a policy didn’t work,” Deputy Secretary of State Lawrence S. Eagleburger told a congressional hearing in May. “But the fact of the matter is, because we tried to work with Iraq and with Saddam Hussein does not mean we created a Frankenstein’s monster. He was there. He was his own monster. We tried to contain him. We did not succeed.”

Just how much of a “monster” Hussein had become emerged soon after Iraq’s invasion of Kuwait. The State Department estimated that Baghdad had spent $10 billion to $20 billion on nuclear and chemical weapons in the 1980s.

Iraq had amassed such an arsenal of chemical and biological weapons--and was so close to a nuclear weapon--that one of the justifications provided by President Bush for the Gulf War was the destruction of those armaments.

After the Gulf War, United Nations investigators discovered the accuracy of the pre-invasion warnings. Sifting through Iraq’s bombed weapons plants and examining its hidden facilities, the U.N. teams found that Western technology had played a vital role in Iraq’s military buildup.

Some of the machinery they found in the nuclear arsenal was U.S. goods with dual commercial and military uses that Baghdad had specified were for commercial purposes.

Between 1985 and 1990, the Ronald Reagan and Bush administrations approved at least 46 export licenses to provide Iraq with dual-use technology that could assist in its nuclear-weapons program, according to a study by the Wisconsin Project on Nuclear Arms Control in Washington.

From the beginning of the Bush Administration, intelligence agencies had expressed concerns about Iraq’s nuclear weapons development effort, according to documents and interviews.

In January, 1989, soon after President Bush took office, intelligence officials--briefing Congress in secret on chemical weapons plants in Libya--expressed deep concern about Iraq’s efforts to develop nuclear and chemical weapons, according to a participant in several sessions.

Not all such warnings were secret. On Feb. 22, 1989, Rear Adm. Thomas Brooks, director of Naval Intelligence, testified before the House Armed Services Committee that Iraq was “actively pursuing” nuclear-weapons capability.

In April, 1989, the Iraqi efforts were detected at the Department of Energy, which monitors the spread of nuclear technology. Officials were being “peppered” with calls from weapons experts about Iraq’s nuclear “shopping list,” according to a memo prepared by investigators for the House Energy and Commerce Committee.

The most alarming items on the list were carbon-fiber rotors for centrifuges, which are used in making weapons-grade uranium, according to intelligence reports that circulated through the government. The Iraqi rotor specifications indicated Baghdad was acquiring state-of-the-art technology.

“Recent evidence indicates that Iraq has a major effort under way to produce nuclear weapons,” A. Bryan Siebert, the chief export control officer, wrote in an April, 1989, memo to his superiors. He added another warning: “Iraq is attempting to procure some of these items in the U.S.”

In an episode first reported in the New York Times in April, Siebert urged that Energy Secretary James D. Watkins pass the information on to Secretary of State James A. Baker III for disclosure to the NSC. But Siebert later told the Energy and Commerce Committee his warnings were dismissed at lower levels as “alarmist.”

Rep. John D. Dingell (D-Mich.), chairman of the committee, wrote a letter of complaint to President Bush two months ago in which he said, “It is outrageous that a country such as Iraq was allowed to reach the brink of acquiring deliverable nuclear weapons, particularly with the knowledge and apparent assistance of the United States.”

Despite the alarm bells, in August, 1989, Iraqi scientists attended a symposium on explosives detonation in Portland, Ore., sponsored by the U.S. government. According to a top federal nuclear weapons expert, the symposium was “the place to be . . . if you were a potential nuclear proliferant.”

A simultaneous attempt by Iraqi agents to obtain U.S. technology for a ballistic missile that could carry a nuclear warhead was outlined in a confidential report by the Pentagon’s Defense Intelligence Agency on Sept. 19, 1989.

The analysis warned the agency believed that if either Egypt or Iraq obtained “a ballistic missile, capable of carrying conventional, chemical, or nuclear warheads,” that would “increase regional tensions and add further fuel to the regional arms race.”

On Oct. 2, 1989, less than two weeks later, President Bush signed a top-secret order, National Security Directive 26, which mandated offering incentives to bring closer political and economic ties with Iraq.

NSD 26 contained a caveat: Iraq’s leadership “must understand” that the United States would seek “the broadest possible” political and economic sanctions if Iraq violated international prohibitions against the development of nuclear weapons.

Yet signs continued to accumulate that Iraq was engaged in a worldwide effort to buy nuclear-weapons technology.

In an Oct. 13 memo, State Department official Frank Lemay said bribes paid by American exporters to Iraq under the Agriculture Department’s Commodity Credit Corp. program may have been diverted to buy sensitive nuclear technology. The memo identified such specific items as a nuclear-fuel compounder and a nose cone burr for a nuclear warhead.

“If smoke indicates fire, we may be facing a four-alarm blaze in the near future,” warned Lemay.

Classified documents reported upon earlier in the Los Angeles Times show that Baker was receiving other warnings about irregularities in the CCC program. Yet he persuaded then Secretary of Agriculture Clayton K. Yeutter to reverse subordinates and approve another $1 billion in CCC loan guarantees for Baghdad on Nov. 8, 1989.

On Nov. 21, 1989, concerns about Iraq’s nuclear program were raised before the Subgroup on Nuclear Export Controls, an interagency panel that plays a critical role in reviewing U.S. export licenses for nuclear-related technology.

The policy had been not to license the sale of nuclear technology to Iraq, but the memo suggested non-sensitive commodities should be allowed to go to facilities not involved in military projects as a response to NSD 26.

Identifying these “clean” facilities, however, was a problem. The intelligence officials explained that Iraq was diverting U.S technology from commercial to military projects and was using front companies to acquire nuclear-related items, according to the memo.

There was “a presumption by the intelligence community and others that the Iraqi government is interested in acquiring a nuclear explosive capability,” said the memo.

Three months later, Assistant Secretary of State John Kelly complained in a memo that the subgroup’s policy on nuclear-related exports was “a drag on trade with Iraq.” He advocated an increased decision-making role for the State Department.

Any doubts about Iraq’s nuclear-weapons intentions were swept away on March 28, 1990. That day, U.S. and British customs agents in London seized a shipment of American-made triggers for nuclear weapons bound for Iraq. Among those indicted in San Diego in the case were three Iraqi government engineers.

The Administration response was relatively low key. White House spokesman Marlin Fitzwater said the case “once again raises our concern for the nuclear proliferation in the Middle East.”