Testimony: U.S. Exports to Iraq

Testimony of Gary Milhollin

Professor, University of Wisconsin Law School and
Director, Wisconsin Project on Nuclear Arms Control

Before the Senate Committee on Banking, Housing and Urban Affairs

October 27, 1992

I am pleased to appear here today before this Committee to discuss United States exports to Iraq.

I am a member of the University of Wisconsin law faculty, and I direct a research project here in Washington that is devoted to tracking and inhibiting the spread of nuclear weapons to additional countries.

The Committee has asked me to answer the question whether American exports aided Iraq’s effort to build weapons of mass destruction.

The answer is “yes.” Saddam Hussein is the first monster with imported fangs. Although the West Germans supplied the canines, Americans supplied some of the lesser teeth. Both governments knew what was going on, but chose not to stop it.

I have been working on the problem of exports to Iraq for almost three years. In September 1990, in testimony before Congressman Barnard’s subcommittee, I recommended that the subcommittee obtain a list of the dual-use exports that the U.S. Commerce Department had approved for Iraq since 1985. The committee then did so with my continuing advice and assistance. After the list was released, I prepared a study analyzing it, which was completed in June 1991. I would like to offer the study today for inclusion in this committee’s hearing record.

In April 1992, I also published an article in the New York Times that listed over forty American companies that got more than one hundred licenses to supply sensitive, dual-use equipment to Iraq. All of these licenses were for Iraqi nuclear weapon and ballistic missile development sites. The April article followed an earlier one that I published in March 1992 in the New York Times Magazine. The March article showed which companies had contributed to developing the individual components of the first bomb Saddam was trying to build. I would also like to offer these two articles for inclusion in the hearing record. All of these publications are based squarely on official records kept by the U.S. Commerce Department.

The records show beyond any doubt that American equipment went directly into the Iraqi mass-destruction weapon programs. The records also show that our officials knew it was going there, but held their noses and waived it through.

Today I am going to talk about two categories of American exports: first, the ones that the UN inspectors actually found in Iraqi mass destruction weapon programs, and second, the ones that the Commerce Department licensed to these programs but that the UN has either not found or not included in its reports.


The electron beam welder. The inspectors found a giant electron beam welder at an Iraqi nuclear weapon plant. It was an essential part of Saddam’s production line for making centrifuges, which Saddam was counting on to make his first critical mass of nuclear weapon material. The welder even had a special fixture for holding the centrifuges in place. The inspectors included it on a list of “the more important equipment” that they found.

This case sheds a lot of light on how the export licensing system worked. The exporter was the Connecticut branch of a German company called Leybold Vacuum Systems. In May 1987, Leybold had already made the newspapers. It was being investigated for trying to smuggle blueprints for uranium enrichment to Pakistan. And another German firm was suing it for stealing the blueprints. According to a German official, the evidence against the company was “very incriminating.” The newspaper stories appeared only six months before the company applied for its two U.S. export licenses in December 1987. Despite the applicant’s notoriety, Commerce approved both licenses in January and February 1988. Neither case was referred to the Pentagon or the State Department for review.

What were the Iraqis going to do with the welder? The application said, in plain English, that they wanted it for “general military repair applications such as jet engines, rocketcases, etc.” So Commerce explicitly approved military repairs, and work on rocketcases.

And who was buying the welder? Nassr State Enterprise for Mechanical Industries. One of Nassr’s main jobs was to buy equipment for Project 1728, devoted to increasing the range of Iraq’s SCUD missiles. The Iraqis did that by cutting up and rewelding the rocketcases to make them hold more fuel. Nassr also bought equipment for making centrifuges, which Saddam hoped would make his first atomic bomb.

So the Commerce Department allowed a known nuclear smuggler to send strategic U.S. equipment straight into the Iraqi bomb and missile program even after being told that the export was going to help make military rockets.

NBC News later discovered an internal Commerce memo showing that Commerce staffers had objected to the license. One employee wrote that “it is difficult to be a consenting party to a transaction such as this.”

The mass spectrometers. The UN found two U.S.-licensed mass spectrometers in the nuclear weapon program. These instruments are used to measure the quality of uranium as it is being enriched to nuclear weapon grade. The Commerce Department licensed one in December 1988 to the Ministry of Heavy Industries, a front company that bought equipment for the Iraqi nuclear weapon development sites, and another to Sa’ad 16 in 1985.

The vacuum pump oil. The UN also found vacuum pump oil made by Dupont in the nuclear program. Vacuum pumps move uranium gas through the enrichment process, while the uranium is raised to nuclear weapon grade. The gas is corrosive, so special pumps are needed to move it. The oil is a restricted item because it is used to lubricate these special pumps. The Commerce Department licensed the pump oil in February 1989.

In addition to this American equipment, which the UN listed as “important,” and which it said was actually being used in the atomic bomb program, there was also a transfer of know-how.

The detonation conference. In 1989, the Pentagon and the Department of Energy invited three Iraqis to attend a “detonation conference” in Portland, Oregon in August. Financed by American taxpayers, the meeting brought together experts from around the world to explain to the Iraqis how to produce shock waves in any desired configuration. There were even lectures on “H.M.X.,” the high explosive of choice for nuclear detonation, and on flyer plates, used to help produce the precise shock waves needed to ignite A-bombs. The UN found both H.M.X. and flyer plates at Iraq’s main nuclear weapon development site. The three Iraqis who attended the conference came from the laboratory that provided parts for Iraq’s first high explosive nuclear detonator.

Chemical and missile items. In February 1992 the UN sent the State Department a list of American equipment that had been found in Iraq’s chemical and missile programs. The list reveals a number of interesting things.

At the al-Muthanna State Establishment at Samarra, the largest Iraqi site for producing chemical weapons, the U.N. inspectors found American equipment during UNSCOM 17, the fifth chemical weapon inspection. They found air compressors, pressure and temperature regulators, power supply components, air filters for ensuring a clean and dry working environment, and buffer vessels, all made by a company in North Carolina. They also reported finding a filling system for projectiles–to fill the projectiles with chemical agents–made by a company in Connecticut and process control equipment made by a large American electronics manufacturer.

In addition, they reported finding a generator, some motors, and an ion exchange machine at al-Fallujah, another chemical weapon site. The UN said that all of these items were made by American companies. The UN also said in its letter that it had not determined how the equipment had found its way to Iraq, so it was possible that it had got there without the companies’ knowledge.


The second category I want to talk about is the equipment that the Commerce Department licensed, but that the UN has either not found or not mentioned in its reports.

It should be clear by now that U.S. export controls on Iraq suffered a massive breakdown in the period preceding the Gulf War. Front companies for every known nuclear, chemical and missile site in Iraq bought American high-speed computers and electronics. Computers exports alone exceeded $96 million. The Commerce Department also licensed equipment for making such things as military radar, and even told one company that it did not need a license for equipment that the Iraqis had specified as being able to operate 66 miles above the surface of the earth. I will mention here only a sample of the licenses that were approved.

The Iraqi Air Force. This is obviously a military institution, yet it was licensed to get $57 million worth of high-tech American exports, including navigational, radar, and air communication equipment and almost a million dollars worth of compasses, gyroscopes, and accelerometers. Compasses, gyroscopes and accelerometers are used in the guidance systems of missiles as well as aircraft. The Commerce Department approved them despite the fact that they were on the U.S. missile technology control list, which came into effect before the approvals were made. They fell under export control category 1485. All items under that category are controlled as missile items. Commerce also approved them without referral to the State Department, which was required for missile-tech items.

Iraqi Atomic Energy Commission. It was directly in charge of nuclear weapon research in Iraq, yet it was licensed to get several American computers that were fast enough to require licenses for export.

Ministry of Defense. Obviously another military organization. It got over $2 million worth of computers, over $1 million worth of guidance equipment, and almost $300,000 worth of navigation, radar, and airborne communication equipment. Many of these items were approved without referral to the Pentagon, even though the buyer was clearly a military enterprise.

Ministry of Industry and Military Industrialization (MIMI). This was another military organization, run by Saddam Hussein’s son-in-law Hussein Kamil al-Majid. It built Al Atheer, Iraq’s primary nuclear weapon development and testing site. It also ordered the now-celebrated furnaces from Consarc that the White House blocked in June 1990 because of Iraq’s plan to divert the furnaces to nuclear weapon production. MIMI was licensed to get roughly $8 million worth of computers and a half million worth of computer-controlled machine tools.

Al-Qaqaa. Part of MIMI and part of Iraq’s nuclear weapon program. It sent the three experts I mentioned above to the detonation conference, and was the buyer of the nuclear weapon triggers that the Iraqis got caught smuggling out of the United States in March 1990. It was licensed to get $200,000 worth of American computers.

Badr. This organization was jointly in charge of all the centrifuge production in Iraq. It was also one of the few places I know of that actually got a “pre-license check” by the U.S. embassy in Baghdad. After U.S. officials toured the plant, Ambassador Glaspie cabled in September 1989 that Badr was “a reliable recipient of sensitive U.S.-origin technology.” It was licensed to get $1.6 million worth of American computers.

Salah al Din (Saad 13). UN inspectors visited this plant and reported that it manufactured radar for the Iraqi army. It also supplied control panels for machines that enriched uranium for nuclear weapons. Commerce licensed it to get over $1 million worth of quartz crystals–essential for making radar–from Zeta Laboratories despite the fact that the crystals were on the missile technology control list and the license was granted in January 1988–after the list went into effect. The stated end use was “components for a radar system.” As late as November 1989, Commerce also licensed Hewlett Packard to sell frequency synthesizers used to develop radar, despite the clear statement on the application that they would be used for “calibrating, adjusting and testing of a surveillance radar.”

These are only some of the licenses. There were other dangerous exports that went out without licenses. This happened because the Commerce Department inexplicably told exporters that no license was required. One of the most mystifying is what I call the case of the “flying tractor.”

The flying tractor. In 1991 the Los Angeles Times discovered that a New Jersey company had contacted the same Commerce Department representative, Michael Manning, who had advised Consarc about the furnaces. Iraq wanted to buy “time-delay relays.” These have civilian uses but are also used to separate the stages of ballistic missiles in flight. Iraq wanted a special model, “tested for shock and vibration,” that would perform at 350,000 feet. That is 66 miles above the earth. An employee of the company told the Los Angeles Times that “when I heard 350,000 feet, I thought missile.”[1]

The employee also said that he told Manning about the high-altitude specifications, which were military grade. They contradicted the Iraqis’ claim that the relays were for “heavy industrial use.” The employee said he told Manning that “they’re not putting tractors 350,000 feet in the air.”[2] Nevertheless, U.S. officials told the company that if a civilian use were stated, there was no reason to bar the export.

I think these examples show an unmistakable pattern. Our government allowed a mountain of dangerous equipment to go to Iraq, and now the UN is finding it at mass-destruction weapon sites. Rather than deny the facts, the government should try to learn something from them.


Did our government actually know what Saddam was up to? And did it know early enough to stop these dangerous exports? The answer is clearly “yes.”

Sa’ad 16. In November 1986, the Pentagon sent the Commerce Department a letter stating that the Pentagon had intelligence information linking a giant Iraqi site called “Sa’ad 16” to missile work.[3] The letter also said that Sa’ad 16 was working on other weapons of mass-destruction. As we now know, Saad 16 was the biggest missile development site in Iraq. U.S. pilots were sent to bomb it during the Gulf War.

We also know that Commerce had even more information about Saad 16 earlier. In May 1985, the general contractor for Sa’ad 16, a West German company called Gildemeister, filed an application for a $60,000 computer for the Sa’ad General Establishment, which Commerce approved six weeks later (case A897641). With the application was an Iraqi letter listing 78 laboratories at Sa’ad 16, including four for testing “starting material and fuel mixtures,” two for “calometric testing of fuels,” two for developing “control systems and navigation” equipment and one for “measuring aerodynamic quantities on models.” On May 3, 1986 a second letter from Sa’ad revealed that the Sa’ad General Establishment was a part of the “State Organization for Technical Industries (SOTI)” and that another name for Sa’ad 16 was the “Research and Development Center.”[4] Commerce undoubtedly received this second letter–an internal Commerce memo mentions it.[5] These two letters from Sa’ad, combined with the November 1986 message from the Pentagon, should have barred any of these organizations from receiving sensitive U.S. exports after November 6, 1986.

But the Sa’ad General Establishment got over half a million dollars’ worth of U.S. computers in eight cases, seven of which were approved after November 1986. Sa’ad also got $290,000 worth of precision electronic and photographic equipment, approved in February 1987, three months after Commerce received the Pentagon letter and more than a year after the receiving the letter describing Sa’ad 16’s laboratories.

The second Iraqi organization mentioned in the Sa’ad letter, SOTI, got high-speed U.S. oscilloscopes in March 1988, a year and a half after Commerce received the Pentagon’s letter (case B259524). SOTI is part of the Iraqi Ministry of Defense. It directed the construction and equipping of a solid rocket motor production plant called “DOT,” and it also procured equipment for at least two SCUD missile enhancement projects. High-speed oscilloscopes are essential to maintain radar, computers and missile guidance systems, all of which have internal electronics that operate in short time frames. Oscilloscopes are also used to capture the brief signals from a nuclear weapon test, which occur in a microsecond or less. Only high-speed oscilloscopes need a license for export.

The third organization mentioned in the Sa’ad letter was the “Research and Development Center,” which the letter said was another name for Sa’ad 16. The “Center” was allowed to buy $850,000 worth of high-performance measuring, calibrating, and testing equipment (cases B060729 and B075876), all approved in January 1987, three months after the Pentagon’s letter and more than a year after the Iraqi letter describing Sa’ad 16’s laboratories. The Defense Department apparently objected at the staff level but did not escalate its objections to a higher level before Commerce approved the exports. The Center also got communicating and tracking equipment valued at $3,000 in 1989 (case B382561).

In addition to the letters from Sa’ad and the Pentagon, there were other warnings. According to U.S. officials, American intelligence began to brief other U.S. agencies on the Iraqi end user network at least at early as 1987. The briefings continued throughout 1988.

In the open press, the earliest detailed accounts of Sa’ad 16 emerged in January 1989, when the German magazine Stern published a list of the Sa’ad 16 laboratories. Over the next several months, the German press published several stories linking Sa’ad 16 to Iraqi missile, nuclear and chemical weapon development. But even these press reports did not stop Commerce from approving the tracking equipment in June of 1989.

Thus the Commerce Department continued to let sensitive American equipment flow to Iraqi front companies even after it knew that the equipment was likely to be diverted.

Internal U.S. government memos. Due to the excellent investigative work done by Representative Henry Gonzales, we now have documents showing that U.S. intelligence knew about, and was reporting on, Iraq’s nuclear weapon effort well before many of the most dangerous exports went out.

As early as June 28, 1985, a Pentagon memo referred to a CIA report, attached to a letter from Secretary of State George Shultz, stating that “there is a body of evidence indicating that Iraq continues to actively pursue an interest in nuclear weapons,…[and] that Iraq has been somewhat less than honest in regard to the intended end-use of high-technology equipment.” Despite the CIA report, Shultz asked the Pentagon’s help in licensing exports to Iraq “without impractical conditions.”

On April 3, 1986, a State Department memo complained about the Pentagon’s effort to hold up licenses to Iraq. It said that the Pentagon’s evaluation of the Iraqi proliferation threat “differed radically from all other agencies,” and that “DOD has simply found a device for blocking legitimate high-tech sales to Iraq while appearing to take the high ground on nonproliferation.”

On February 22, 1989, Director of Naval Intelligence, Rear Admiral Thomas Brooks, explicitly told the House Armed Services Committee that Iraq was “actively pursuing” nuclear weapons.

On March 23, 1989, a State Department memo stated that Iraq was “working hard at chemical and biological weapons.”

Despite all this, on October 2, 1989, President Bush issued NSD 26, stating that “normal relations between the United States and Iraq would serve our longer-term interests and promote stability in both the Gulf and the Middle East. The United States Government should propose economic and political incentives for Iraq to moderate its behavior and increase our influence in Iraq.”

Only a month later, on November 6, 1989, the CIA reported that “Baghdad has created complex procurement networks … to acquire technology for its chemical, biological, nuclear and ballistic missile development programs.”


[1] Henry Weinstein, “Despite Warning, U.S. Okd Sale of Missile Part to Iraq,” Los Angeles Times, April 9, 1991. p. A7.

[2] Id.

[3] United States Government Accounting Office, “Arms Control: U.S. Efforts to Control the Transfer of Nuclear-Capable Missile Technology” (Report to the Honorable Dennis DeConcini, U.S. Senate), GAO/NSIAD-90-176, p. 14.

[4] Sa’ad General Establishment, letter of May 3, 1986 from H. A. Al-Dahan to Gildemeister Projecta.

[5] U.S. Department of Commerce, Memorandum to John Knofala from Willard A. Workman, August 12, 1986.