House panel to probe pre-war U.S.-Iraq link U.S. helped build Iraqi war machine, newspaper says.

February 25, 1992|By Los Angeles Times

WASHINGTON -- The House Banking, Finance and Urban Affairs Committee plans extensive hearings into disclosures that President Bush and other high U.S. officials secretly helped Saddam Hussein build Iraq's war machine almost until the start of the Persian Gulf War.

An aide to committee Chairman Henry B. Gonzalez, D-Texas, said yesterday that the hearings would address questions raised in a series of Los Angeles Times articles as well as other issues surrounding "the Iraqi procurement network."

In a House speech, Mr. Gonzalez said that he also would ask a congressional agency to investigate whether the Export-Import Bank improperly approved aid for Iraq in 1984 and 1987 after being lobbied by then-Vice President Bush and others.

Mr. Bush intervened on at least four occasions to clear the way for U.S. loan guarantees to Iraq, the last time less than eight months before the Iraqi invasion of Kuwait, according to documents revealed by Mr. Gonzalez.

The congressman said that Congress' General Accounting Office will examine "ample evidence" that directors of the bank approved $684 million in loan guarantees for Iraq, despite repeated warnings that there was no "reasonable assurance of repayment," as required by the agency's charter.

"The policy toward Iraq is by far the most tragic foreign policy episode of the Bush and Reagan administrations," the congressman declared.

Two other Banking Committee members, Reps. Maxine Waters, D-Calif., and Jim Slattery, D-Kan., sharply criticized the actions of Mr. Bush and other officials. Their remarks suggest that Democrats may try to use the disclosures in election campaigns this year if they are assailed for voting against Mr. Bush's request to wage war against Iraq.

"We now learn that the same president who sent our sons and and daughters to fight a war also empowered the monster we were fighting by sending them a billion dollars in foreign aid," Ms. Waters said. "American taxpayers subsidized the development of his [Mr. Saddam's] ballistic missiles and then had to pay for the war, too."

Mr. Slattery said that the Times articles outline "a very troubling record of what I'd have to call appeasement" of Mr. Saddam.

"Who was really advising this policy of appeasement?" Mr. Slattery asked. "Was it the president, the vice president, aides in the White House, or all of the above . . . ?"

Mr. Gonzalez has already conducted three hearings on $4 billion in unauthorized loans made by the Atlanta branch of Banca Nazionale el Lavoro, an Italian bank that was heavily involved in Export-Import Bank loan guarantees for Iraq. Investigators have determined that funds from the unauthorized loans were used to buy military technology and goods.

He noted that "it took interventions and constant pressure, often from high-level State Department policy-makers and even [then-Vice President] Bush, to permit Iraq to utilize Ex-Im bank credits."

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