U.S. Shielded Two in Iraq Arms Affair, Papers Show

Top executives of an Iraqi-owned company that funneled military technology to Baghdad before the Persian Gulf War were given immunity by federal prosecutors investigating $5 billion in hidden Iraqi loans, according to documents.

Giving immunity to the two senior executives of Matrix Churchill in the United States and Britain adds to questions about whether the Bush Administration permitted Iraqi fronts to obtain weapons technology as part of its favorable treatment of the regime of Saddam Hussein before the war.

Matrix Churchill was owned secretly by Iraq and provided millions of dollars worth of military technology to Baghdad’s war effort through its British and U.S. operations under the guise of buying the technology for commercial purposes.

Last month, it was disclosed in a London trial that the British government allowed Matrix Churchill to send machinery to Iraq because its intelligence agents were receiving information on Baghdad’s weapons programs from two company executives.

Many Matrix Churchill sales to Iraq were financed as part of $5 billion in loans to Iraq by the Atlanta office of Italy’s Banca Nazionale del Lavoro. The Justice Department’s handling of the BNL investigation is under scrutiny by several congressional committees and a special investigator appointed by Atty. Gen. William P. Barr.

The immunity, first disclosed in the Atlanta Constitution newspaper, was given by BNL prosecutors to Gordon Cooper, the former chief executive of Matrix Churchill in Ohio, and Paul Henderson, his counterpart in Coventry, Britain.

Henderson is one of three former officials of Matrix Churchill in Britain on trial in London on charges of violating export laws by shipping machinery with military uses to Iraq.

Cooper and Henderson were told that they would not be prosecuted in Atlanta for any Iraq-related crimes in exchange for their testimony before the grand jury investigating BNL, according to the agreements.

The deals were not disclosed to U.S. District Judge Marvin H. Shoob, who presided over the BNL case in Atlanta. In several hearings, Shoob asked prosecutors why Matrix Churchill and its officials were not indicted. But the judge did not learn of the agreements until this week, according to one of his law clerks.

Gerrilyn G. Brill, the acting U.S. attorney, declined to confirm the existence of the agreements. But she said Shoob and a defense lawyer were notified by letter in September that some witnesses had received limited immunity as part of the investigation.