Firm Says U.S. OKd Bomb Sales to Iraq : Gulf War: Teledyne, charged with export violations, contends that a secret government policy allowed arms to go to Saddam Hussein’s regime.

Lawyers for a division of Teledyne Inc., claimed Monday that the Los Angeles-based defense company was allowed to sell material for Iraqi cluster bombs as part of a secret U.S. government policy to assist the regime of Saddam Hussein before the Persian Gulf War.

Teledyne said that the U.S. government knew that Chilean arms manufacturer Carlos Cardoen was selling the bombs to Iraq but still granted Teledyne export licenses to provide Cardoen with zirconium, a key ingredient in the weapons.

In a motion filed in federal court in Miami, Teledyne’s lawyers indicated that they intend to defend the company against export violation charges by trying to prove that former Presidents Ronald Reagan and George Bush allowed Iraq to receive U.S. military assistance through a covert policy.

Attached to the motion were dozens of declassified government documents detailing U.S. knowledge of Cardoen’s activities on behalf of Iraq and other shipments of military technology to Iraq in the 1980s when Hussein was at war with neighboring Iran.

Teledyne’s Wah Chang division in Albany, Ore., two employees of the division, and Cardoen were indicted by a federal grand jury in Miami in May on charges of violating U.S. export laws. The allegations, which involve the sale of 24,000 cluster bombs, were the first criminal charges brought against an American company in connection with arms sales to Iraq.

A key ingredient in the cluster bombs is zirconium, a metal that enhances burning. The government said that Teledyne Wah Chang obtained export licenses to sell Cardoen 130 tons of zirconium by falsely claiming that the material was for commercial use. The government contends that Teledyne knew the zirconium was for Iraqi-bound cluster bombs.

No trial is scheduled until next year, and defense lawyers said that they believe it is unlikely prosecutors will succeed in extraditing Cardoen from Chile, where he is one of the nation’s wealthiest businessmen. Cardoen has maintained in press interviews that the U.S. government was kept informed of his arms sales to Iraq.

Teledyne’s lawyers said that the company and its employees thought the zirconium was being used for commercial explosives. The company’s motion said Teledyne was unaware that Cardoen was using the material for cluster bombs but it contended that the U.S. government knew what Cardoen was doing.

Documents attached to the motion show that the U.S. government knew as early as 1984 that Cardoen was selling thousands of cluster bombs to Iraq. The issue was first raised by an Iraqi diplomat, who complained to U.S. officials that Cardoen might also sell the bombs to Iran. Later, James Theberge, a former U.S. ambassador to Chile, went on Cardoen’s payroll at a time when Theberge also was a senior adviser to the Central Intelligence Agency.

Cluster bombs were used widely by Iraq against Iran in the 1980s. The weapons release hundreds of smaller anti-armor and anti-personnel bombs over a wide area. Zirconium intensifies burning, helping the bombs penetrate armor.

“From the evidence which the defendants have been able to gather,” said the motion, “two things are clear: 1) it was the policy of the United States to arm Iraq by whatever means were necessary so as to counterbalance Iranian influence in the Middle East and 2) Carlos Cardoen was well-known to the United States government as a manufacturer of cluster bombs which he sold to Iraq.”

William Joseph Linklater, Teledyne’s lead lawyer, declined to comment on the motion. A spokesman in the U.S. attorney’s office in Miami said that there would be no comment on a pending case.

Last week, Teledyne agreed to pay a $1.5-million fine and plead guilty to criminal charges of lying to the government for the second time in less than a year. The settlement involved Teledyne’s failure to disclose $3 million in payments to a consultant for help in obtaining $70 million worth of defense contracts from Taiwan in the 1980s. The company earlier pleaded guilty to improperly testing 9 million electronic components for the U.S. military.