Britain Warned Allies of Iraqi Arms Purchases, Witness Says : Weapons: Intelligence official tells London court that details of network were shared with Western allies. U.S. official says CIA received the data.

A British intelligence official, testifying from behind a screen, told a London court Friday that details of Iraq’s secret arms-buying effort were shared with other Western intelligence agencies as early as 1987.

The official, identified only as “Officer B” of the MI5 security service, did not specifically say the CIA received the intelligence reports, which included information that Iraq had acquired U.S. blueprints to build a 1,000-pound bomb.

However, a U.S. intelligence source confirmed independently that the CIA received data about the Iraqi arms network from Britain during that time period. The two agencies routinely share information, according to the source and other intelligence experts.

“We had a lot of information about the Iraqi network, and we were getting it out,” said the U.S. source, who spoke on the condition that his name be withheld.

The London testimony is likely to fuel charges by Democrats in Congress that the Ronald Reagan and Bush administrations ignored intelligence warnings and allowed Iraq to acquire Western military technology as part of a tilt by the United States toward the regime of Saddam Hussein.

Earlier accounts have described numerous U.S. intelligence reports on Iraq’s efforts to buy weapons technology, and Defense Department concerns about such illicit purchases by Baghdad date back to 1985. But Friday’s account represents the earliest date that Western governments had solid evidence of Iraq’s ambitious program.

The testimony came at the trial of three former directors of Matrix Churchill Corp., a British-based, Iraqi-owned company. They are accused of violating British export laws by shipping millions of dollars worth of machine tools to Iraqi arms factories between 1988 and 1990.

A senior British trade official testified earlier in the week that Matrix Churchill had been allowed to export to Iraqi arms factories because two of its officials were providing information on Iraq’s arms program to intelligence agencies.

Peter Earnest, a CIA spokesman, declined to comment on Friday’s testimony, saying: “We do not discuss agency relationships with other intelligence agencies.”

Congressional investigators say the CIA knew Iraqi-owned companies were operating in the United States in 1989 and 1990 under the guise of civilian buying agents when in fact they were military purchasing fronts. The London testimony raises the possibility that the agency knew even earlier.

A Matrix Churchill subsidiary in Solon, Ohio, played a major role in the U.S. end of Iraq’s arms-buying network, according to documents and federal investigators. Many of its transactions were financed through the Atlanta branch of Italy’s Banca Nazionale del Lavoro, which provided $5 billion in illicit loans for Baghdad.

Internal Matrix Churchill documents show that the Ohio subsidiary helped Iraq acquire technology for its nuclear-weapons program, Condor 2 ballistic missiles and the supergun developed by artillery wizard Gerald Bull, who was murdered in March, 1990.

The CIA knew by at least in November, 1989, that Matrix Churchill was part of the Iraqi network, according to a CIA report disclosed previously in The Times. Yet the Ohio subsidiary was not shut down by U.S. customs agents until September, 1990, a month after Iraq’s invasion of Kuwait.

A British intelligence report introduced Thursday as evidence at the London trial described Iraq’s efforts to buy machinery for arms production from companies in Europe. The information was based on accounts from British businessmen who had visited two large Iraqi arms plants.

The August, 1987, document also revealed that the Iraqis had obtained American blueprints to build a 1,000-pound bomb. It did not say how the Iraqis had gotten the American blueprints.

A senior defense lawyer told the London court that it was likely the CIA would have received the 1987 information. “Britain shares its information with U.S. and Western intelligence services,” said the lawyer, Geoffrey Robertson.