No Prosecutions Seen in Iraq Export Case : Probe: The Justice Department gives no reason for decision not to bring charges. Sources say FBI found no intent to obstruct House inquiry.

The Justice Department has declined to prosecute anyone for altering a list of export licenses to delete references to military uses for goods approved for sale to Iraq, it was disclosed Thursday.

The list had been requested by the chairman of a congressional panel investigating the George Bush Administration’s pre-Persian Gulf War policy of secretly aiding the regime of Iraqi President Saddam Hussein.

It later was determined that the military uses for $1 billion in equipment cleared for export were deleted or changed so the material would appear to be solely for civilian use.

The alterations on 68 of 771 licenses were a central element in a showdown last summer between congressional Democrats and the Bush Administration over U.S. assistance to Iraq in the years before Operation Desert Storm.

There was evidence that White House officials had been involved in the preparation of the list, and House Democrats cited the alterations as one of the reasons a special prosecutor was necessary in the matter.

But then-Atty. Gen. William P. Barr rejected requests for an independent counsel. One of his justifications was that the alterations were already under investigation.

The decision not to proceed with prosecution comes as interest in the Bush Administration’s Iraq policy appears to be waning. The most aggressive congressional investigator, Rep. Henry B. Gonzalez (D-Tex.), chairman of the House Banking, Finance and Urban Affairs Committee, is not expected to conduct further hearings on the matter.

The decision not to bring charges in connection with the deletions from the export list was disclosed in a one-sentence Justice Department letter to Rep. John M. Spratt Jr. (D-S.C.). It was dated Wednesday and released by Spratt on Thursday.

The Justice Department said the decision came after a full investigation by the FBI into the alterations. The letter did not give a reason for declining to prosecute, and a department spokesman said no one would say when the decision was made or whether it was reviewed by Atty. Gen. Janet Reno.

Spratt, who recently became chairman of the House Government Operations subcommittee that received the altered list, had written to Reno last month asking about the status of the inquiry.

A subcommittee staff member said Spratt will raise the issue with Reno personally in an attempt to get a full explanation concerning the decision.

A source close to the investigation said Thursday that FBI agents found no evidence of actual intent to obstruct the congressional inquiry.

“There was no evidence to support criminal intent in the changes,” said the source, who spoke on condition that he not be named.

Dennis E. Kloske, a former undersecretary of commerce, acknowledged last June that he approved removing the military uses for the goods from the list prepared by the Commerce Department. He said the action came after Commerce Department officials were in touch with officials at the White House and other agencies.

But Kloske said there was no intent to deceive Congress and that the changes were made to provide a more accurate list of exports.

“Neither I nor anyone else involved in this process, to my knowledge, had any desire to or attempted to deceive,” he said.

Attempts to reach Kloske on Thursday were unsuccessful.

The list of $1.5 billion worth of U.S. export licenses approved for Iraq between 1985 and 1990 was prepared in October, 1990--two months after Iraq’s invasion of Kuwait--at the request of then-Rep. Doug Barnard Jr. (D-Ga.), chairman of the House commerce, consumer and monetary affairs subcommittee, part of the Government Operations Committee.

After an anonymous tip, Barnard’s staff asked the Commerce Department’s inspector general to investigate whether the list had been altered. The inspector general found 68 instances in which military uses for trucks, computers and other equipment had been altered to reflect more benign commercial uses.

Times staff writer Ronald J. Ostrow contributed to this story.