Bomb Maker With Iraqi Ties Alleges U.S. Intimidation : Arms: A probe studies possible export violations in connection with purchases from Teledyne. He says American officials approved of his sales.

A manufacturer who supplied cluster bombs to Iraq in the 1980s said here Tuesday that American officials are waging “business terrorism” against him as they investigate how he was able to buy a controlled ingredient for the bombs from Teledyne Inc., a Los Angeles-based defense contractor.

Carlos Cardoen, who made a fortune selling arms to Iraqi leader Saddam Hussein, said that he did so with the approval of American authorities. He said that the George Bush Administration later turned against him, trying to make him a scapegoat amid controversy over the West’s role in arming Iraq before its 1990 invasion of neighboring Kuwait.

Federal prosecutors in Miami are investigating possible violations of export laws in Cardoen’s purchase of munitions-grade zirconium from a Teledyne division. The zirconium, which intensifies heat in explosions, was a key ingredient in the cluster bombs that Cardoen sold to Iraq.

A cluster bomb unleashes hundreds of bomblets that explode in the air, saturating a wide area with a lethal rain. With zirconium, the blasts can penetrate steel armor.

Teledyne Wah Chang, the Teledyne division that manufactures zirconium in Albany, Ore., sold about 100 tons of the material for $2 million to Cardoen Industries between 1984 and 1988, Cardoen acknowledged in an interview.

Federal prosecutors are reviewing classified material to determine what the American government knew about ties between Baghdad and Cardoen, sources close to the case said.

Prosecutors have asked the CIA, the State Department and possibly other agencies to check their files for records reflecting any knowledge about the dealings, the sources said.

Cardoen said Tuesday that American authorities “knew perfectly well” that the zirconium sold to his company was to be used in bombs for Iraq.

“The U.S. ambassadors, as well as the military attaches, went to our factories and they saw the products,” he said. “And every time that we were shipping, they were patting us on the back, saying: ‘Guys, you’re doing the right thing.’ Remember that . . . Iraq (then) was fighting Iran and Iran was the big enemy of the Western world. So it was not only us, but the United States was shipping armaments to Iraq.”

In discussions with attorneys in the case, prosecutors have contended that senior American officials were unaware of Cardoen’s arms sales to Iraq. But prosecutors last week obtained a four-month delay in the case, which sources said was to provide time to search for and examine classified documents.

Prosecutors had to ask Teledyne to agree to the delay because the five-year criminal statute of limitations on the sales ran out this month. Teledyne agreed to an extension until June 1 in the hopes of avoiding charges, according to the sources.

The Times reported earlier this month that the CIA, the State Department and Customs Service records show several American agencies were aware that Cardoen was selling cluster bombs to Iraq as early as 1984.

At the time, the United States was tilting toward Iraq in its war against Iran, which ended in August, 1988.

Licenses to sell the zirconium to Cardoen were approved by the Commerce Department during a period in 1987 when classified records show that then-Vice President Bush was promising Iraqi diplomats that the United States was loosening up export restrictions.

Cardoen said that his cluster bomb sales to Iraq were a matter of public knowledge in Washington in the early 1980s: “I was in Washington, D.C., 10 years ago . . . at the Sheraton Hotel, showing our bombs, showing the zirconium use, and it’s in every one of our brochures.”

Prosecutors also are investigating whether Teledyne was aware that the zirconium was used in cluster bombs. “Absolutely. Of course,” Teledyne knew, said Cardoen. He said that Teledyne officials participated in military field testing in Chile.

Teledyne lawyers have contended that the Wah Chang division did not know about the military uses of the zirconium. They also have claimed that American officials knew Cardoen was selling cluster bombs to Iraq and did not stop the sales because of the U.S. tilt toward Iraq.

Dan Gelber, a special counsel to the U.S. attorney in Miami, declined to comment on the case Tuesday, as did Justice Department officials in Washington. William Joseph Linklater, a Chicago lawyer representing Teledyne Wah Chang, also declined to comment.

Cardoen said that he knew of no prohibition in the U.S. export license against reselling the zirconium. He admitted that “low-echelon” officials in his company neglected to indicate in the application form that the zirconium was for military explosives. “The only supposed violation would have been an incomplete application that had to indicate ‘military explosive’ and said ‘explosive’ only,” he said.

But responsibility for the application was Teledyne’s, he said, and he was “astonished” that he was under investigation. He blamed his involvement on the Bush Administration.

“We think as the Bush Administration goes out, trying to find a scapegoat for whatever, they’ve tried to point their finger on us,” he said. “They have made a mistake. They have done a lot of damage and I think it’s time for some sense to be brought into the subject.”

In accusing U.S. officials of “business terrorism,” he said that they have “done nothing but try to ruin my reputation and my business and this is unjust.” Partly because of American pressure, he says, his companies no longer manufacture military weapons.

Cardoen met late last year in Jamaica with federal prosecutors but rejected suggestions that he testify against Teledyne, he said.

“I am not here to tell on anybody,” he said. “We had a straight-forward business relation with Teledyne. We think Teledyne did the rightful things and we did the rightful things.”

Long reported from Santiago and Frantz from Washington.