Sale of High-Tech Glass Factory to Iraq Assailed

The chairman of the House Banking Committee on Monday accused the Bush Administration of approving the sale of a glass-fiber factory to an Iraqi government facility known by U.S. officials to be responsible for developing nuclear and chemical weapons and ballistic missiles.

The chairman, Rep. Henry B. Gonzalez (D-Tex.), said the transaction, which involved a small Chino, Calif., firm, is another example of the Administration’s mishandling of prewar policy with Baghdad.

“Any claim that the U.S. may have ‘inadvertently’ helped to arm Iraq is a smoke screen to obscure the massive blunder that occurred during the coddling of Saddam Hussein,” Gonzalez charged in an hourlong statement on the floor of the House. The remarks were the latest in a series of attacks by Gonzalez on the subject.

President Bush has maintained that the Administration did nothing to enhance Iraq’s nuclear or chemical weapons programs. A White House spokesman did not return telephone calls Monday.

The transaction involved the sale of $15 million in glass-fiber manufacturing equipment and technology to Iraq by Glass Incorporated International of Chino. The deal was one of many Iraqi high-tech purchases financed by the Atlanta branch of Italy’s Banca Nazionale del Lavoro and arranged by Matrix Churchill Corp., an Ohio firm later identified as an Iraqi front.

Evan Williams, an attorney for Glass Incorporated, said the sale was strictly commercial and was approved at every level by the U.S. government. He said the glass fiber that the plant was to manufacture was not suitable for military uses.

“We had no knowledge of any military involvement,” said Williams. “We were not dealing with an enemy of this country at the time and everything we did was proper.”

According to documents released by Gonzalez, the November, 1989, application for an export license listed the purchaser of the factory as TECHCORP.

The name stood for the Iraqi Technical Corps for Special Projects. Just two months earlier, in September of 1989, a CIA report identified TECHCORP as having overall responsibility for the “highest priority military projects--chemical weapons, long-range missile programs, nuclear programs.”

Gonzalez maintained that the glass-fiber plant had potential military uses, including the manufacture of missile casings and centrifuges for Iraq’s program to produce bomb-grade uranium.

Williams said the plant, to have been located outside Baghdad, was not completed when Iraq invaded Kuwait and shipments were stopped. He also said his client has not been paid.

During the time the export application was pending with the Commerce Department, U.S. officials issued several warnings about Iraq’s attempts to obtain technology for its nuclear weapons and missile programs.

As The Times reported last week, the State Department went so far in February and April of 1990 as to send messages and diplomats to other Western companies asking them not to sell certain technology to Iraq. One State Department official identified a glass-fiber factory as one element Iraq sought.

On June 4, 1990, two months before Iraq’s invasion of Kuwait, the Commerce Department approved the export of the glass-fiber technology without a license as long as the Iraqi receivers promised not to share it with a third country, according to documents.