Study: Commerce Dept. aided Iraqi arms buildup

Chicago Tribune
June 20, 1991

WASHINGTON—The Commerce Department helped Saddam Hussein build his war machine in the late 1980s by approving the sale of millions of dollars of sensitive U.S. technology to military agencies and research centers in Iraq, according to a study released Wednesday.

The equipment ranged from advanced computers to precision machine tools, and the buyers included entities that US intelligence officials knew were involved in Iraqi efforts to develop nuclear weapons and missiles like the Scuds fired at Israel and Saudi Arabia in the Persian Gulf war.

Yet the Commerce Department approved some of the technology sales without consulting the Defense, State or Energy Departments, as required under federal rules, the study contended.

The study was prepared by the Wisconsin Project on Nuclear Arms Control, an affiliate of the University of Wisconsin Law School, which examined documents relating to the Commerce Department’s approval of 771 licenses for the export of $1.5 billion worth of goods to Iraq from 1985 through 1990. All of the items were “dual-use” products, those that could have either civilian or military applications.

Only $500 million of the $1.5 billion worth of goods were delivered to Baghdad, because some contracts fell through and sanctions were imposed after Iraq invaded Kuwait last August.

Several congressional committees also are reviewing the sales, and a number of critics share the Wisconsin group’s conclusion that the licensing system “suffered a massive breakdown in the period preceding the gulf war.” They suggest speedy reforms before the US inadvertently helps to arm another potentially hostile dictator.

Some critics see the main problem as a conflict between the Commerce Department’s twin roles as the government’s chief trade-promotion agency and as a regulator.

In its report, the Wisconsin group cited a number of sales that it said the Commerce Department could have blocked under regulations specifically designed to prevent other countries from using American technology to develop nuclear weapons or ballistic missiles.

In early 1988, for instance, the department granted licenses to a German company to ship $1.4 million worth of US machine tools and lasers to Iraq, even though the application said the tools and lasers were to be used for “general military repair applications such as jet engines, rocket cases, etc.”

About that time, Commerce officials also authorized the sale of more than $2 million worth of quartz crystals to Iraqi trading companies that said they wanted to use them as “components in a ground radar system,” the Wisconsin group said.

And in late 1989, Commerce officials allowed one of the Iraqi firms to buy frequency synthesizers valued at $140,000 to “calibrate, adjust and test surveillance radar,” the report said.

The study said the Commerce Department did not consult with the State Department, as required in federal regulations, before approving either of the radar-related sales.

Commerce Department officials declined Wednesday to discuss the Wisconsin group’s findings. But they contended in a written statement that “all licenses to Iraq were decided in accordance with export control policies then in effect” and coordinated with other US agencies “to the extent possible.”

Some department officials also have said they had no authority to block most of the sales after the State Department dropped Iraq from a watch list of countries supporting terrorism in 1982.

One former Pentagon official, Stephen Bryen, told a House subcommittee recently that the Commerce Department repeatedly tried to prevent his office from reviewing sensitive export license applications during the 1980s.

“Obviously, there is something wrong in a system where, despite clear-cut evidence, the agency with supervisory, legal responsibility to regulate sensitive exports is, in fact, doing everything it can to promote exports and to neutralize those in the government who object,” Bryen said.

A former top Commerce Department official, Dennis Kloske, also has testified that he tried to snarl some of the sales to Iraq “in red tape” after he failed early in 1990 to make his concern about them ”clear at the very highest levels” of the Bush administration.

The Wisconsin report also contended that Commerce officials ignored a warning from the Pentagon in late 1986 that Iraq was developing missiles and unconventional weapons at a site called “Sa’ad 16.”

Commerce later approved the sales of more than $500,000 in computers, $290,000 worth of precision electronic and photographic equipment and $850,000 worth of high-performance testing equipment to organizations linked to the research at that site.

Commerce officials also told a New Jersey company in 1989 that it did not need a license to export a sophisticated furnace to Iraq, even though company officials were concerned that it could aid Iraq’s nuclear weapons program, according to press reports. The White House blocked that shipment in June, 1990, after Pentagon officials learned about plans for it and intervened.

The Wisconsin group said one problem is that the law normally requires the government to keep export license applications secret. It recommended that the authority to approve such exports be transferred to the Pentagon and that quarterly summaries of the licensing actions be made public.