U.S. intelligence knew about Iraqi arms buildup before Bush warmed relations

November 02, 1992|By Dean Baquet with Elaine Sciolino | Dean Baquet with Elaine Sciolino,New York Times News Service

Four months before President Bush signed a secret order encouraging closer relations with Iraq, the Defense Intelligence Agency provided details on a network of European companies Iraqi President Saddam Hussein used to buy technology that could upset the balance of military power in the Mideast.

A classified 1989 document illustrates how much information about Mr. Hussein's military ambitions and methods was available as the administration was embarking on its policy of courting Iraq.

It shows that U.S. intelligence knew that British tool-maker Matrix Churchill Corp., which had a branch in Solon, Ohio, played a major role in Iraq's weapons-buying program, yet did nothing to stop the operation.

Mr. Hussein used the company to buy seemingly innocent technology and equipment, then converted it for use in building a home-grown weapons industry, law enforcement officials said.

The existence and timing of the report raise the question of whether Mr. Hussein's arms-related buying spree was aided by a lack of communication between U.S. intelligence agencies on the one hand, and export agencies and policy makers on the other.

It is not clear whether this June 1989 report, written more than one year before Iraq invaded Kuwait, made its way to top policy-makers within the administration, or the agencies that control exports. One Pentagon official familiar with the report, who spoke on the condition of anonymity, said it was the kind of document that would be widely circulated among senior Pentagon officials.

If the report was passed on, it raises yet another question: In its pursuit of a closer relationship with Iraq, did Washington allow Iraqi-owned companies in the West to freely acquire weapons technology?

Parts of the June 1989 report, as well as a classified Nov. 6, 1989, report by the CIA, were described in broad terms in a floor statement last summer by Rep. Henry B. Gonzalez, D-Texas, as evidence that the government had information about Mr. Hussein's arms network.

But other administration and government officials familiar with the report provided additional information about it, including the warnings about Mr. Hussein's growing power and aggressiveness.

The administration has repeatedly asserted that it did nothing to encourage Mr. Hussein's military buildup, and that Iraq acquired Western arms technology by lying about the purpose of equipment it bought.

But last week, documents made public in a trial in London revealed that the British government knowingly allowed Matrix Churchill to buy arms-making equipment because two of the company's British executives were secretly informing it about Iraq's arms buildup.

Rather than lose this source of intelligence, the British let the company buy equipment known to be destined to help Mr. Hussein build weapons.

Following disclosure of the documents in London, the Senate Intelligence Committee asked CIA Director Robert M. Gates what Washington intelligence agencies knew about the relationship between Matrix Churchill and the British government. Among other things, the committee wanted to know whether U.S. intelligence also allowed the company to buy equipment for Iraq.

The report's warnings about Mr. Hussein mirror the criticism Democrats have leveled at the Bush administration's policy toward Iraq.

Although it is not known if the report was widely circulated, other evidence about Mr. Hussein's arms buildup was presented to Mr. Bush and senior policy makers during a 1989 National Security Council meeting called to discuss whether economic and political incentives could be used to change Mr. Hussein's behavior.

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