How Hussein Gets ‘Anything He Wants’
Late one afternoon in March 2001, busy border guards in Jordan gave a cursory check to a sheaf of export documents, then waved past three large trucks hauling hundreds of rolls of brightly colored cloth into Iraq.
Hidden inside the trucks was a bonanza of banned military materiel -- including night-vision devices, global positioning systems, communications gear and other highly specialized electronic equipment from South Korea.
An Iraqi smuggler had bought counterfeit export approval papers for $5,000 from officials in Amman, the Jordanian capital. That, plus a forged signature and a bogus blue stamp, was all it took to shatter strict United Nations sanctions against President Saddam Hussein’s regime.
“I buy the permission,” said the smuggler, a slim, 39-year-old Baghdad-born engineer who spoke on condition of anonymity. “The permission says only fabric. It is supposed to be permission from the U.N. So the guard says: ‘OK, no problem. Just go.’ ”
In all, the engineer said, he helped sneak at least 25 loads of contraband cargo into Iraq for hefty commissions. Among them: 2,500 tires for armored personnel carriers from Ukraine, two trucks of high-tech laboratory equipment from Germany, and mainframe South Korean computers inside empty refrigerator boxes from Dubai, United Arab Emirates.
“Saddam, anything he wants, he can get,” said the Iraqi, who recently moved to Britain. “Especially now. He will pay anything.”
The smuggler’s story, and others like it, are familiar and frustrating to U.S., European and U.N. officials who have sought to unravel the illegal procurement network Baghdad has used since U.N. sanctions were imposed after Iraq’s 1990 invasion of Kuwait.
Those sanctions-busting schemes are back in the spotlight as U.N. inspection teams return to Iraq and as Washington girds for war. At issue: determining what Hussein may have done to make poison gases, produce deadly microbes for germ warfare, develop atomic bombs and build long-range ballistic missiles to deliver them all.
It won’t be easy. Hussein has relied on a global maze of front companies and offshore banks, shady arms merchants and factory owners, crooked middlemen and brokers, plus corrupt officials and border guards. Only a fraction of goods are checked at border posts. And only a handful of people have been caught or prosecuted.
“In terms of smuggling, the U.N. inspectors will not be armed with lots of new documents showing this or that has entered the country,” said Mustafa Alani, an Iraq expert at London’s Royal United Services Institute for Defense Studies, which is affiliated with Britain’s Defense Ministry. “There is almost no hard evidence. There are mostly assumptions.”
In part, that’s because almost all the components and raw materials needed to produce chemical and biological weapons and ballistic missiles are known as dual-use, meaning they also have legitimate uses in Iraq’s petrochemical industry, hospitals, pesticide plants or other civilian facilities.
U.N. Must OK Goods
Under sanctions, U.N. officials are supposed to approve all goods, including any dual-use equipment, that Iraq seeks to import. Inspectors have identified more than 100 suspect contracts since December 1999 and now are checking a backlog of additional dual-use documents that Iraq handed over Oct. 1 in Vienna.
“There is no specific equipment for producing chemical warfare agents,” explained a member of the current U.N. weapons inspection team. “It’s all dual-use equipment.”
In some cases, legitimate suppliers are unaware of the agents’ agenda.
“I found a European company trying to sell high-speed pumps to Iraq,” said a Western government official who plays a lead role in tracking and intercepting clandestine shipments. “Perfectly innocent. But the pump is perfect for missiles. We had to tell them.”
Uncertainty also stems from Hussein’s reorganization of his covert procurement network after U.N. inspectors last searched Iraqi factories, laboratories and offices for incriminating evidence in 1998.
The state-run Military Industrialization Commission was put in charge of the revamped effort. Commission agents, often traveling on phony passports, have been tracked from Congo and Kenya to Malaysia and Indonesia, from China and Thailand to Austria and Germany.
Iraq tracks them as well. In July, the official Iraqi press reported that 10 engineers at Bader Enterprise, a missile-parts plant run by the commission, had been arrested after returning from delegation visits to India, Russia and Ukraine. The engineers were said to face execution for allegedly passing information to foreign governments.
Iraqi intelligence agents accompany all such overseas visits. In the 1990s, an Iraqi intelligence unit known as M-19 also was used to create shell companies for especially sensitive deals.
“Typically M-19 sets up a front in Amman, then sets up a parallel Jordanian company run by Palestinians,” said Scott Ritter, a former U.N. weapons inspector who investigated several such deals. “They set up an affiliate in Switzerland and then another in France. Then they’ll open another in Malaysia or in Singapore, who will buy what Saddam wants in Taiwan. No one notices when a Singapore company buys machine tools in Taiwan, and the billing goes to Geneva and the end user is in Jordan. Except it then gets trucked into Iraq.”
Officials say the system is similar today, although Syria and Dubai have largely replaced Jordan, and companies increasingly are registered in Lichtenstein, Cyprus and Panama. The labyrinth of corporate “cutouts,” usually run by individuals whose identities can’t be traced, helps shield every operation involving weapons of mass destruction, or WMD.
“One company will be for transport, one to pay the bills, one to deal with suppliers of WMD materials, one to deal with suppliers of a legitimate product like food or medicine,” said the Western government official. “The classic front company is one man, one fax, one transaction.”
In some cases, Western authorities have let Hussein’s nameplate companies remain open so they could eavesdrop to gather intelligence. One result: Electronic tracking or surveillance devices have been inserted into several shipments of goods smuggled into Iraq to see where they wound up, officials say.
Carrying a Shopping List
Iraqi agents have been known to carry 30-page shopping lists of prohibited equipment. They usually pay in cash and buy in bulk. The military industrial commission usually remits the money through the nearest Iraqi ambassador or military attache.
“They are forbidden from even negotiating,” said Nabil Musawi, who has interviewed several smugglers for the Iraqi National Congress, an opposition group based in London. “They are told: ‘Just get the items. Whatever it costs.’ ”
The known sums are relatively small. Between 1994 and 1998, U.N. inspectors uncovered or intercepted transactions worth $50 million to $60 million for components, raw materials, high-tech spare parts and other equipment that could be used for weapons of mass destruction. Shipments or deals were traced to about 20 countries.
Most involved Iraq’s efforts to produce chemical weapons or to acquire liquid propellant chemicals and solid propellant rocket motor ingredients for long-range ballistic missiles. Few of the confirmed deals involved germ warfare agents, and none involved material for nuclear weapons.
But only a handful of suspected smuggling cases for weapons of mass destruction have come to light since inspectors left in 1998. Even fewer are known to have succeeded.
U.S. and British officials, for example, say Iraq has made a concerted effort to procure materials that could be used to construct gas centrifuges to enrich uranium, a step toward forming fuel for nuclear weapons.
As evidence, a British Joint Intelligence Committee report in September revealed that Baghdad had “sought significant quantities” of uranium from Africa even though Iraq has no nuclear power plants.
Although Iraqi agents visited many of the 13 African countries where uranium is mined, no evidence indicates they succeeded in obtaining uranium, intelligence officials say.
The British report also said Iraq made “attempts to purchase” vacuum pumps, special magnets, a large filament winding machine and other specialized equipment “which could be used” to build gas centrifuges. Iraq also “made repeated attempts” to acquire 60,000 or more specialized aluminum tubes, the report noted, “although there is no definitive intelligence that it is destined for a nuclear program.”
Officials won’t say why the attempts went awry. But most nuclear-related materials are subject to international export controls, so they are easier to track and intercept.
Even nonnuclear deals often fail. In the 1990s, U.N. inspectors found that three out of four of the suspected weapons-smuggling schemes they investigated had not resulted in delivery of prohibited goods.
In some cases, suppliers backed out. In others, Iraq didn’t approve the deal, or someone in the system got cold feet. One reason: Not everyone in the illegal trade is a volunteer.
“People who have successful businesses, [the regime] sends someone who says ‘the master’ -- they call Saddam ‘the master’ -- wishes to be your partner,” said Hamid Bayati, another Iraqi exile here in London. “He says OK or he disappears.”
Baghdad got scammed at least once, buying guidance units from dismantled Ukrainian missiles in the mid-1990s that didn’t fit Iraqi missiles. “They got them, smuggled them inside, and U.N. inspectors finally got wind,” said former inspector David Kay. “Divers found them dumped in the Tigris River.”
Other deals may be fakes. A CIA official warns that many Iraqi defectors concoct or inflate smuggling stories to win favor in the West. And both Iraqi and Western intelligence agencies have sought to trick one another in what one official called a “covert struggle.”
Hussein’s agents, for example, deliberately have laid false trails, such as seeking multiple bids to set Western spy services scrambling. Western operatives, in turn, have tried to “sting” Iraqi diplomats or traders, seeking to entice or blackmail them into becoming informants.
“The U.S. and British send people to Amman and offer the Iraqis radioactive materials, missile parts, weapons of mass destruction,” said Alani, the Iraq expert. “They go to someone in the Iraqi Embassy, or an Iraqi businessman. And he goes back to Baghdad. And then he comes back and says no. Because it’s obviously a trap. But the report to Washington says Iraq was interested.”
To be sure, Iraq has long experience in buying banned weapons.
During the bitter 1980-88 Iran-Iraq War, Baghdad successfully supplied its troops despite a U.N. arms embargo. The system was never shut down, and few of the regime’s offshore bank accounts were ever found.
These days, Iraqi smuggling is far more extensive -- and even more crucial to Hussein’s regime.
U.N. sanctions prohibit all imports to or exports from Iraq except for those approved by the world body. In the largest program, known as “oil for food,” a U.N. agency sells Iraqi crude oil on the world market and uses the proceeds -- about $10 billion this year -- to buy food, medicine and other humanitarian goods for Iraqi civilians.
The U.N. system clearly is porous, however.
According to a CIA report last month, some of the approved goods have been directly used in weapons programs. More important, the agency claims, U.N. monitors at Iraq’s borders “do not inspect cargo worth hundreds of millions of dollars” that enters Iraq outside the oil-for-food program.
“Some of these goods clearly support Iraq’s military and [weapons of mass destruction] programs,” the CIA said.
The CIA also estimates that Iraq will earn about $3 billion this year -- more than four times the 1998 amount -- by illegally exporting oil outside U.N. auspices.
The money “increases Baghdad’s capability to finance WMD programs,” the CIA said.
Experts say most of the illicit oil money goes to illegally import a vast array of consumer goods, from Marlboro cigarettes to IBM computers. Hussein has encouraged such systematic smuggling by slashing import duties and tariffs since 1996, when the oil-for-food system began. The results have been dramatic.
“What the sanctions have done is create a rabid free-market economy,” said Toby Dodge, an Iraq expert at the Royal Institute of International Affairs in London. “It’s like structural adjustment with guns. It’s a full-scale alternate economy.”
Baghdad also buys banned conventional weapons and supplies on the global black market. Although Hussein’s military force has shrunk drastically since the 1991 Persian Gulf War, experts say he has been able to refurbish many aging Soviet-built craft. He also has sought to upgrade Iraq’s antiaircraft systems, a chief concern for U.S. and British warplanes patrolling “no-fly” zones over northern and southern Iraq.
U.S. officials say the chief sources for such sales are arms companies, organized-crime groups and independent dealers in Eastern Europe and several former Soviet republics. A Chinese company provided a fiber-optic communications system.
In recent months, authorities have investigated reports that Iraq obtained a wide range of military equipment from Bosnia-Herzegovina, Yugoslavia, Belarus and other countries in Eastern Europe.
Authorities also have tracked suspected arms deals to groups in Germany, Russia and Syria, among other places.
At least one operation took place at sea, when a freighter registered in Cyprus offloaded weapons parts in exchange for Iraqi oil.
“The sanctions are no more than a strainer,” said the Western government official. “It impedes things. But almost everything ultimately can go through.”