NEWS ANALYSIS : Major Dodges Bullet in Probe Over Sales to Iraq

With unprecedented testimony before an independent inquiry, Prime Minister John Major has, for now, sidestepped a political land mine involving what Conservative governments he has served in may have known about British sales of militarily sensitive equipment to Iraq.

The opposition Labor Party had hoped that Tory officials would be politically tarred when they were forced to admit that they broke their own rules and shipped critical supplies--arms-making machine tools and other “dual-use” equipment--to Baghdad before the Persian Gulf War.

Major--following the example of his predecessor, Margaret Thatcher, who gave hostile testimony to an investigative panel headed by Lord Justice Richard Scott--denied specific knowledge of a change in the government guidelines on dual-use exports to Iraq.

Although less frosty than Thatcher, Major still managed to be equally reticent about export laws that governed the British-Iraqi transactions that occurred during the time he was a treasury minister, foreign secretary, chancellor of the Exchequer and even until late 1992, when he was prime minister.

His appearance this week marked the first time in parliamentary history that a serving prime minister had gone before an outside, investigative tribunal.

Major contended that if there were changes made to the export regulations, effectively barring dual-use sales to Iraq, he knew nothing of them and suggested they had been made by junior ministers who failed to tell him and other senior officials about them.

That argument infuriated Labor Party leader John Smith, who had predicted that the prime minister’s testimony would expose him as “a knave or a fool,” because in early 1992 Major had declared that the guidelines had been followed.

The rough export rules were originally announced to Parliament in October, 1985, and were secretly relaxed in December, 1988--a decision that, testimony has indicated, was agreed to by senior officials in the foreign, defense and trade ministries. The rule relaxation led to exports of machine tools and engineering equipment that could be used to manufacture arms. Matrix Churchill Co. was one of the companies charged by the Customs Office with violating the rules to conduct illegal trade with Iraq.

The trial against Matrix Churchill officials collapsed in November, 1992, when the defense showed that British intelligence knew that the parts might have military uses and that the Department of Trade had approved the shipments.

Alan Clark, the outspoken former junior defense minister, has told the inquiry that the guidelines were fudged to help British companies compete for Iraqi sales. Clark has admitted being “economical with the truth” in publicly advising Parliament on the case. But he argued that British jobs were at stake.

The probe has uncovered the cozy way--even by British standards--that business was conducted in Thatcher-Major governments: It was kept from public and parliamentary view.

“The inquiry has uncovered layers of scandal,” said Anthony Sampson, a social historian. “Most seriously, it reveals the lack of any effective check on the abuses of power.”