The Death Lobby: How the West ArmedIraq

Chapter 12: The DoC Missile Caper

(pp198-224)

Dassault's chief salesman, Huygues de l'Estoile, was riding highby the time Christmas 1984 rolled around. He had just spent two weeksescorting General Amer Rashid al-Obeidi around Paris, to visit withdefense contractors and government officials. General Amer, whoheaded an obscure body called the Scientific Research Council, wasbetter known within the closed circles of the French defense lobby as"the father of Iraq's French Air Force." He was also, as the head ofthe French Foreign Ministry's Research & Intelligence bureau,Philippe Coste, would reveal a few years later, the "father of Iraq'sfirst real military procurement plan, which introduced French weaponson a massive scale into Iraq's Soviet arsenal." The Iraqi General wasnot just an important guest: he was about the most important visitorDassault, Matra, Aerospatiale, and the other big time armsmanufacturers in France could hope to welcome. Huygues de l'Estoilehad been awarded the special honor of taking him around. It was knownas Dassault's "hands-on" approach, and it created resentment amongthe other arms sellers.

General Amer was short and slight of build, and always appeareddwarfed by the Western business suits he was obliged to wear duringthese arms-buying forays beyond Iraq's borders. But the Iraqitechnician had the eyes of a hawk, and was quick to pierce throughpretence and incompetence. When he was angry, his severe steel-rimmedglasses flashed. "In truth," said another Frenchman who had extensivedealings with the Iraqi, "we were terrified of him."

General Amer was accompanied by a team of Air Force technicians,who had come to evaluate a French proposal to sell Iraq its latestcombat jet, the Mirage 2000. The 2000 had just gone into service withthe French Air Force, and was so new it had yet to receive amulti-mode radar, which the French hoped would turn it into a strongcompetitor of the F-16 and the Soviet MiG-29 on the internationalarms market.

De l'Estoile didn't need to engage in any hard-selling, becauseGeneral Amer was more than familiar with the aircraft's remarkableperformance, and was already sold on the package Dassault had puttogether. Having learned the lesson from the first Mirage sales inthe 1970s, Dassault had chosen to avoid potential conflict with theFrench Air Force, and so refrained from offering the Iraqis the sameplane the Air Force was just then receiving. The Iraqi Mirage 2000would not be equipped as a multi-role fighter, but as a low-levelpenetration bomber, as General Amer had requested. Iraq wasinterested in sixty planes. When munitions, spares, and training werethrown it, the deal could be worth up to $6 billion, companyofficials said.

De l'Estoile took the Iraqi around to visit his old boss, HenriMartre, who was now in charge of Aerospatiale. Martre could hardlyrefuse an Iraqi request, since his company was reaping exceptionalprofits from its business with Baghdad. Iraq was now buying roughlythree out of every four Exocet missiles to come off the Aerospatialeassembly lines, and that order alone was grossing the company some$250 million every year. Added to that, Iraq was buying thousands ofHOT and Milan anti-tank missiles, Roland-2 air defense systems, andGazelle helicopters, making Iraq Aerospatiale's largest customer fordefense products.

General Amer explained that he was ready to kick in sizeable fundsto speed up development of Aerospatiale's latest strategic missile,an air-launched cruise missile with a nuclear warhead that could belaunched from the Mirage 2000. The mock-up was called the ASMP(Air-Sol Moyen Portée), and would be able to hit targets some200 km from wherever it was launched, skimming over treetops and sanddunes to escape detection. Of course, Iraq was not interested in thenuclear version, General Amer reassured Martre, perceiving howuncomfortable he was with the Iraqi demand. The new arms package,French arms sellers interviewed in Baghdad readily admitted, was "ahighly offensive shopping list. It has not been put together withIran in mind, but to attack Israel."

But there was a hitch. Several hitches, as it turned out. AmerRashid had brought along a negotiating team from the Iraqi FinanceMinistry, to hammer out the details of a new loan from the Frenchgovernment to cover virtually the entire arms package. Iraq would bepumping most of the money back into the French economy, General Amerpledged. Nonsense, replied French Finance Minister, PierreBérégovoy. Using French government loans to purchaseFrench-made planes for Iraq was just a way of robbing Peter to payPaul, and Bérégovoy wanted nothing of it.

Bérégovoy and his accountants argued that Iraq wasjust stalling for time. There was no need to rush into huge newfinancial commitments to Baghdad until Iraq's tie-in to the SaudiPetroline opened later that year, which would boost Iraqi oil exports(and revenues) by 500,000 barrels per day. Even then, France couldonly consume so much Iraqi oil. The last big Iraqi arms purchases theFrench socialists had agreed to underwrite were still being paid forwith huge shipments of Iraqi oil. Better to digest the businessalready in the works than to bite off more than the Iraqi economycould chew, the accountants said.

Huygues de l'Estoile and the defense lobby came charging back.They argued that without the new sale, France would lose theprivileged position on the Iraqi market it had earned through yearsof patient work. The dispute over the new Iraqi planes went all theway to the Elysée palace, and was the subject of a December1984 meeting that brought together President Mitterrand's innercabinet. Defense Minister Charles Hernu took up industry's cause, andcrossed swords with the Finance Minister over the sale. Finally PrimeMinister, Laurent Fabius, suggested they compromise by cutting theIraqi order by half. In three years time, when the first planesarrived, the French government could always reconsider the rest.

A French Defense Ministry mission to Baghdad was scheduled forearly February 1985. The compromise solution was to be deliveredpersonally by the head of the Defense Ministry's International SalesDirectorate, General Pierre-René Audran. But Audran missed theplane.

The French had their own Irangate scandal, although it never madethe headlines in quite the same way, and certainly never packed thesame political punch. At the same time French defense contractorswere selling billions in advanced weaponry to Iraq, the Frenchgovernment was trying to open a discreet channel to Tehran throughprivate intermediaries and government officials. This backdoorpolicy, which paralleled the beginnings of President Reagan's "Iraninitiative," also included officially sanctioned grey market armssales to Iran, primarily through the French munitions manufacturer,Luchaire.

It all began in June 1984 when Roland Dumas, a personal advisor toPresident Mitterrand, invited a secret Iranian government emissaryfor a discreet chat at the Elysée Palace. (The emissary was awell-known arms dealer, Sadegh Tabatabai, who also happened to be anephew of Ayatollah Khomeini). A few months later Dumas, who had beenpromoted to Foreign Minister, made a "secret" stop-over to Tehranwhile on a State visit to Saudi Arabia. It wasn't long before thesecret was out, and the pro-Iraq lobby jumped on it. Oppositionleader Jacques Chirac wrote in a November 1984 article that Franceshould not fail in its "moral and material support of Iraq." Hecriticized those who were building bridges toward Iran in the hope ofbetter days. "Instead of dreaming about the post-Khomeini era," hewrote in Politique Internationale, they "would do better to worryfirst about Khomeini." Whether it was because the secret was out ornot, the French "initiative" toward Iran soon turned to tragedy.

General Pierre-René Audran had played such a key role inthe Paris-Baghdad saga that he had earned the nickname "Mr Iraq." Butin the months that preceded his scheduled trip to Baghdad to deliverthe French response on the Mirage 2000 deal, he also made threesecret trips to Tehran as part of the "initiative." The subject hewas ordered to discuss with Iranian leaders involved the ways andmeans of opening a discreet arms pipeline to Iran. In December 1984,however, the Socialist government decided to back out of the deal.When Audran's negotiating partner in Tehran, Mohsen Rafiq Doust,learned of this decision, he was furious. As head of Iran'sRevolutionary Guards Corps, he not only commanded hundreds ofthousands of soldiers on the battlefront with Iraq, but also aphalanx of terrorists spread across the globe. Doust told the Frenchemissary who delivered the bad news to Tehran that he held Audranpersonally responsible for the double-dealing of the Frenchgovernment, and intended to "make him pay." On January 28, only daysbefore he scheduled to leave for Baghdad, Audran was gunned downoutside his home in the Paris suburbs as he was leaving for work.

The Audran assassination shook the French arms establishment tothe core, and prompted President Mitterrand to suspend the Mirage2000 negotiations with Iraq. That message was carried to Baghdad onFebruary 9, 1985 by Audran's temporary replacement at theInternational Directorate, General Bernard Carlier, who spent threedays holed up in room 1010 of the Rashid Hotel. When his presence inBaghdad was discovered, he cancelled invitations to the grandreception that had been planned in his honor at the French Embassy.He was terrified that the Iranians had understood the motive behindthis top secret mission, and were following his every move.

Baghdad wasted no time in putting its new relationship withWashington to the test. Even before he had raised the Iraqi flag atthe embassy up on Massachusetts Avenue, Nizar Hamdoon's operationshifted into top gear. The commercial section worked overtime tolocate American companies willing to sell high technology goods toIraq. Dozens of Silicon Valley computer firms signed up for a March1985 computer trade fair in Baghdad to show off their wares. Businessprospects would so good that Hewlett Packard soon opened a Baghdadoffice.

But there was a sinister underside to Iraq's commercial interestin the United States that should have been apparent from the start.After all, Iraq was a nation at war, and its leadership had neverearned points for its trustworthiness in the past, or for its supportof democratic values. On the contrary, Iraq was known for itsenormous arms purchases, for its repeated use of chemical weapons,and for being the first Arab nation in history to have prompted anIsraeli preemptive strike because of its nuclear weapons program.

Despite all these reasons for caution, in the early months of 1985the Reagan Administration opened the doors wide to Iraqi purchases ofU.S. high technology goods, selling equipment that could not beexported to the Soviet Union or the Eastern bloc .And it wasn't a fewdeals, a few contracts, but a veritable flood. The Iraqis came indroves, directly, through U.S. agents, through the Germans, via theAustrians, the French, through the U.S. Embassy in Baghdad--any andevery way possible. They wanted the keys to the candy store; and theywere willing to pay for them.

General Amer Rashid al Obeidi prepared the way. Hisnewly-organized Scientific Research Council began applying to theU.S. Department of Commerce in August and September 1984 to obtainmodest quantities of computers, oscilloscopes, and electronic testequipment. These initial export licensing requests were greeted withheavy skepticism by the various agencies responsible for reviewingthem for national security reasons, or to ascertain whether theyconstituted a threat because they could contribute to a nuclearweapons program. A 104-page listing of the these licenses, releasedby the Commerce Department after months of tense negotiations, showsthat the United States government was simply not approving high-techsales to Iraq before March 1985; then, all of a sudden the licensesstarted to go through, as if someone had turned a switch. Overnight,from its previous status as a country to watch, Iraq became alegitimate market for the sale of high technology goods, despite theclear military applications of many of the products being sold. Thisis one of the immediate prizes the Iraqis collected by renewingdiplomatic relations with the U.S.

In one case, General Amer's Scientific Research Council (SRC)applied for a $5,000 oscilloscope on September 20, 1984. It wasfinally approved on March 4, 1985. In another, he applied for $21,000worth of advanced computers for use at the French-built Saad 13electronics factory. This application was put in on July 13, 1984 butnot approved until May 7 the following year. Case after case showsexactly the same pattern. The various reviewing agencies all trodwarily when it came to high-tech sales to Iraq, delaying them if notrejecting them outright--until the early months of 1985, when theCommerce Department succeeded in overruling them. From then on, theCommerce Department simply stopped referring many Iraqi licenserequests to other agencies for review. When it did refer the cases,and other agencies objected to them, Commerce escalated the debate toa higher bureaucratic level, where the Reagan administration'sideological commitment to free trade and its political debts toAmerican exporters outweighed mounting concern for Iraqi weaponsprograms. Amer Rashid's Scientific Research Council obtained 21separate licenses for computer equipment during this period, and itwas only one of many active Iraqi procurement fronts. Some $94million worth of sophisticated American computer hardware was solddirectly to Iraqi weapons plants with Commerce Departmentapproval.

One of the staunchest advocates of the new "sell all" policy toIraq in early 1985 was California Congressman, Ed Zschau. He lobbiedhard to get the Defense Department disbarred from the export reviewprocess, former DoD officials and Congressional sources say, to opena new export market to his Silicon Valley constituency. HisCongressional assistant at the time, James Lemunyon, went on tobecome Deputy Assistant Secretary of Commerce during the BushAdministration, where he was put in charge of export licensing at theBureau of Export Administration. (At least one license which had beenrejected by the Defense Department, DoC case number B119803, wasapproved four years later once Lemunyon took over this key positionat DoC. Singled out by an inter-agency investigation, this case hasapparently been erased from the Department of Commerce computer andcan not be found on any of the DoC lists subpoenaed by Congress. Itconcerns a "computer designed for image enhancement," according to aconfidential August 9, 1988 memo submitted to the GovernmentAccounting Office. The computer was made by the Silicon Valley firm,International Imaging, and went to Iraq's ballistic missile researchcenter, Saad 16).

Dr. Steven Bryen was serving as Deputy Undersecretary of Defensefor Trade Security Policy when the alarm bells first went off. Inmid-1985, he got wind of a Commerce Department decision to licensethe sale of a hybrid computer to Iraq, whose combined analog anddigital functions would allow Iraqi engineers to plot ballisticmissile trajectories with pinpoint accuracy. The computer in questionwas almost identical to one sold to the White Sands missile testrange in Nevada. It was made by a West Longbranch, New Jersey firmcalled Electronic Associates, Inc. According to the licenseapplication submitted to the Commerce Department on May 8, 1985, theofficial purchaser was a West German company called GildemeisterProjecta, which was the prime contractor of Iraq's Saad 16 missileresearch and design center in Mosul.

The EAI computer was only one of a long series of export licenseapplications filed that spring for the Saad 16 complex. In a letterdated February 27, 1985 that was appended to the applications, theDirector General of the Saad General Establishment informedGildemeister that the center was dedicated to "checking of basicmaterials such as ferrous, non-ferrous metals, plastics, etc andscientific instruments and apparatuses, development and modernizationof scientific instruments and apparatuses" (sic). The complex hadbeen under construction since February 1985, he stated, and wouldcontain 76 laboratories and workshops. Gildemeister was to use hisletter in export license applications.

The EAI application, Department of Commerce case number A897642,was approved at the peak of the 1985 summer holidays, August 26,despite a Defense Department recommendation two months earlier thatit be refused because of the strategic implications. The documentssubmitted by EAI to the Commerce Department clearly stated thatGildemeister was serving as the prime contractor for Iraq.

Bryen and his Defense Technology Security Administration (DTSA)just across the beltway from the Pentagon, began taking a closer lookat the license applications that were routinely getting approved forIraq, and what he saw alarmed him. U.S. high-tech was going directlyto Iraq's Atomic Energy Agency, to the Iraqi Air Force, and tosuspected weapons establishments and research labs. DTSA recommendedthat dozens of applications be rejected outright, while others bereturned without action. But the Pentagon was simply overruled. So onSeptember 19, 1985, Bryen fired off a memo to his counterpart incharge of the Bureau of Export Administration, Undersecretary ofCommerce Paul Freedenberg. "In light of U.S. policy toward Iran andIraq regarding military end-use," Bryen wrote, "I am very concernedthat Commerce has taken such a casual attitude toward providing suchsophisticated equipment (to Iraq) for an end-use... with suchmilitary significance." More than thirty licenses for Saad 16 wereapproved for advanced computers, test instruments, microwavecommunications and manufacturing equipment, satellite mappingdevices, image enhancement, radio scaler, spectrum analyzers, andtelemetry equipment.

Freedenberg just shrugged it off, and today admits that Iraq "justwasn't a big issue" during his tenure at the Commerce Department (heresigned to go into business as a private trade consultant on May 1,1989). As for the millions of dollars worth of computers andsophisticated test equipment that were going to Saad 16, Freedenberglays the blame squarely on the intelligence community. "They raisedno red flag on Saad 16. It was considered just one of many researchcenters." Freedenberg liked to remind his critics that the UnitedStates had a policy to forego many lucrative high-tech sales to theSoviet Union and Eastern Europe at the time, leaving its allies tosnatch them up. In Iraq, American companies were competing against amultitude of potential suppliers. "So there was no reason to denyU.S. firms access to this new computer market," Freedenberg argues,by subjecting them to unreasonable licensing requirements.

But Saad 16 was no ordinary research center, and it took noparticular technical expertise to understand why. In the seven-pagedescription that Gildemeister sent to the Commerce Department at thevery start of the Saad 16 licensing process, project director M.B.Namody detailed the "academic" research labs he was seeking to equipwith U.S. high-tech instruments. The document shows that theyincluded the following:

Laboratory Description supplied by Iraq

0101 Mechanical workshop

0102 Heat treatment shop

0103 Surface treatment shop

0108 Chemical analysis

0111 Laboratory for the rapid determination of carbon and sulphurcontent in metals

0112 Laboratory for fissure detection in metals

0113 Laboratory for hardness testing of metals

0302 Laboratory for measuring the dependance of acceleration ondrive

0303 Laboratory for testing movement sequences under atmosphericconditions

0502 Laboratory for calometric testing of fuels

0504 Laboratory for testing storage properties in raisedtemperatures

0505 Laboratory for testing the behavior of materials duringtransport (vibration and friction)

0506 Laboratory for determining the speed with which firespreads

0507 Laboratory for testing the chemical stability of compoundsand mechanical mixtures

0510 Equipment for laboratory production of homogeneous fuels andadditives

0513-1516 Laboratory for calometric testing of starting materialand fuel mixtures

0517 Laboratory for spectrographic testing of fuels

0602 Fluid mechanics laboratory for measuring aerodynamicquantities on models, e.g. lift correction value, resistance value,etc

0603 Laboratory for measuring systems connected with thedevelopment and trials of vehicles, including data transmission,etc

0608 Automatic control system simulation laboratory

0610-0612 Control system and navigation laboratory

0701-0711 Laboratory for examination of electro-optical aids,eg. the production of lenses, optical filters, glass laboratoryequipment

0712 Laboratory for microwave engineering

0713 Laboratory for low and high frequency engineering, e.g., inthe radio and television frequency band

0714 Laboratory and workshop for electronic measuringinstruments

0716-0717 Laboratory for antennae and antennae parts, andassembly and testing

0718 Test laboratory for printed circuit board engineering

0721 Calibration laboratory

0902 Laboratory for measuring the dependence of acceleration ondrive.

An analysis conducted by the Pentagon Office for Non-ProliferationPolicy on August 9, 1988 concluded unequivocally that "almost all ofthe labs named deal with areas applicable to missile research andproduction, such as: fuel production, vibration and friction effects,the stability of mixtures, machine and vehicle construction, datatransmission, automatic control, control and navigation, aerodynamicquantities, turbo machines, antennas, and microwaves. A lab for'seismographic soil tests' is also listed, possibly indicatingnuclear research."

The real purpose of the Saad 16 complex was clear, and proved thatthe Iraqis were into the missile game in a big way. Guided by theGerman and Austrian consultants who had designed and built Saad 16,U.S. companies were providing much of the technology the Iraqisneeded. And they were doing it perfectly legally, with the knowledgeand approval of the U.S. Department of Commerce. "When I look at thecase list to Iraq," says Congressional investigator, Ted Jacobs, "Ihave to conclude that no one cared. The Iraqis didn't have to hidewhat they were doing, and still it got approved." For the SiliconValley firms involved, it meant a few hundred million dollars worthof extra computer sales; but for those on the receiving end of theIraqi missiles they helped to design, it was a matter of life ordeath.

The Commerce Department's attitude was inexplicable for anotherreason. Since 1982, in response to a National Security DecisionDirective issued by President Reagan, the State Department had beenhard at work negotiating a new international control regime,specifically tailored to slow the proliferation of ballistic missilesto the Third World. By March 1985, all the details of the MissileTechnology Control Regime (MTCR) had been hammered out between theU.S. and six of its allies, Canada, France, Great Britain, Italy,Japan, and West Germany. The export of complete missile systems aswell as major components was banned. A detailed list of missiletechnologies was put on an international watchlist. The key figuresfor the MTCR were 500 kilograms and 300 kilometers: missiles withsmaller warheads, or with a shorter range, fell outside the scope ofthe agreement.

With the detailed technology list in hand, President Reaganinstructed U.S. government agencies to enforce the MTCR as of March1985. The spread of ballistic missiles was of such urgent concernthat waiting for formal adoption of the control regime by the allieswould be folly. (He was right: France and West Germany held up theformal announcement of the MTCR for another two years). So as ofMarch 1985, export license requests for countries such as Iraq weresupposed to be scrutinized for potential missile applications. Moreoften than not, however, the Commerce Department failed to passlicense applications to the appropriate technical review agencies.Instead, Commerce (and sometimes State) simply matched the itemsproposed for export with the new MTCR list, and unless they found adirect hit, they approved the license with the annotation: "Notrestricted for MTCR, Chemical/Biological, or nuclearnon-proliferation." The Iraqis loved it and kept coming back formore.

[insert p 283]

[But even this explanation falls short of the mark. Intestimony before a subcommittee of the Joint Economic committee onApril 23, 1991, Professor Gary Milhollin, who heads the WisconsinProject on Nuclear Arms Control and has been investigating Iraqiweapons development programs, presented evidence showing thatCommerce simply lied about many of the licenses for Nassr and otherIraqi weapons plants. Milhollin presented a dozen cases in whichCommerce approved licenses by declaring the equipment was "notrestricted" by the MTCR, when in fact the items did appear on themissile control list and should never have been exported to Iraq."Commerce was simply not telling the truth," Milhollin concluded. Todisguise its error, Commerce Department officials refused to shareinformation on these cases with the Department of Defense and neverpassed them on for review.]

In addition to the high-tech purchases for their missile R&Dcenter in Mosul, the Iraqis came to the U.S. in search ofcomputer-assisted design equipment for a huge new weapons complex atTaji,an industrial suburb just to the north of Baghdad, on the roadto Samarra. Work on Taji began in 1981, with a $81 million steelfoundry built by the West German conglomerate, Thyssen Rheinstahl(the same company that was building a chemicals laboratory at nearbySalman Pak). The Thyssen foundry was completed three years later, andby early 1985 the site was turned over to the Nassr State Enterprisefor Mechanical Engineering.

The head of Nassr was an enterprising Iraqi named Dr. Safa Habobi,who was to heavy engineering what Amer al-Saadi was to chemicals, andAmer Rashid was to Iraq's budding defense electronics industry. Aspecialist in machine-tools and the computerized numericalcontrollers needed to direct them, Habobi understood that no weaponsindustry could be complete without sophisticated machine-tools. Theywere necessary to make gun barrels, to make missile bodies, even tomake ammunition. And he set about acquiring them wherever he could,primarily in West Germany, Great Britain, and in the UnitedStates.

The type of sophisticated machine-tools the Nassr State Enterprisewas seeking to purchase in the United States in early 1985 werenormally covered by COCOM controls. They could not be exported to theSoviet Union or to the Eastern bloc, because of their obvious,immediate application to weapons manufacturing. But since they didnot figure on the MTCR list, nor were they considered applicable toatomic weapons development, the Commerce Department now says it had"no regulatory basis" on which to deny their export to Iraq. It wasone of the many absurdities of the U.S. export control system thatwould occur repeatedly over the next five years. Nuclear materialsand missile parts were banned from export, but the machine-toolsneeded to manufacture them were not.

Dr. Habobi had big hopes for the Taji complex. In early 1985, hesigned a major new contract with a consortium of German companies ledby Ferrostaal, to build a second foundry and a die forging plant. Theinitial 350,000 square foot plant at Taji was to be more thandoubled. Contributing to the project were JurgenHippenstiel-Imhausen, the German chemicals manufacturer who was thenbuilding Libya's poison gas plant at Rabta, and the cream of Germanheavy industry: the state-owned Salzgitter AG, MAN, Hochtief,Klöckner Industrie, Mannesmann, Buderus, SMS Hasenclever, andWest Germany's premier manufacturer of gunpowder and munitions,Rheinmetall, of Dusseldorf.

Rheinmetall's participation should have tipped off the Germanauthorities as to the true nature of the Taji plant, but it did not.Eschborn approved the deal without batting an eye. Official Germangovernment documents refer to it as a "universal smelting plant"(Universalschmiede), but Taji was a gun factory from the word go. TheGermans and the Americans were so easy going that the Iraqis droppedall pretense concerning this project, and in the license applicationsthey declared that the sophisticated computers, machine tools, andmachine-tool controllers were to be used "for general militaryapplications such as jet engine repair, rocket cases, etc." TheCommerce Department watchdogs thought such projects were appropriatemarkets for U.S. business. The U.S. relationship to Iraq was nolonger a "tilt," but an alliance.

Francis Hurtut, First Secretary at the French Embassy in Baghdad,was worried. "The Americans are coming," he whispered to reportersover drinks at the Meridien Hotel, just around the corner from theEmbassy. Short and trim, sporting a healthy tan, Hurtut repaired tothe Meridien pool-deck during the stifling Baghdad summer afternoons,when the temperature often reached 110 degrees Fahrenheit. He likedto play a game with one female reporter from a Paris daily: spottingthe American businessmen who were now flocking to Baghdad. "Thatone's from Bell Textron," he said, pointing to a leather-faced Texanwearing a loud shirt. "They just sold 48 combat helicopters to Iraqon the pretext they were for civilian transport. There's not acivilian helicopter in this country, and they know it."

With other reporters back in his office at the French embassyaround the corner, Hurtut liked to take out a press book he had beenputting together. "Over the past six months, there have been twoarticles on French technology in the local Iraqi press, one onnuclear research, and the other on the Paris metro system. Over thesame period, there have been 45 articles on the United States andU.S. technology every month. When we hear Tarek Aziz saying that Iraqwants American technology, and for Iraqi students to attend Americanuniversities, we begin to wonder what crumbs from the table will beleft for us. For a country such as France, which has done lots offavors for Iraq, we are certainly not getting any freebees," heconcluded. "On the economic front, we are clearly competing with theU.S." And, he hastened to add, France was losing the competition.

There was more than just Gallic chagrin to Hurtut's complaint, andFrench businessmen in Baghdad echoed his refrain. The Americans werecoming, alright. And they were coming in force. Countries such asFrance, which were shy to offer unlimited new credits to Iraq, couldsit on the sidelines and watch as the commercial cake got divvied upbetween the Americans, the Germans, and the Japanese.

David Newton was the U.S. Chargé d'affaires in Baghdad whoshepherded U.S.-Iraqi relations into the greener pastures of mutualprofit. In 1985, he was elevated to Ambassador status. As one of therare Kurdish speakers in the U.S. Foreign Service, Newton kept closetabs on internal repression, especially against the Kurds. Though hehad no particular fondness for the Baathist regime, he believed thata change of heart had come over Saddam, which he conveyed in numerouscables back to his boss at Foggy Bottom, Richard Murphy.

"Iraq is a country with good development prospects," he noted.Having tasted the fruits of cooperation with the U.S., Newtonbelieved, Saddam "would prefer to act as a member of the club.Terrorism is a policy of weak nations that have little say within thesystem. Saddam would rather use the power of the state instead ofacting as a subversive."

Newton made no attempt to gloss over Saddam's ruthless, ganglandrule, but he felt that Iraq would "loosen up" after the war with Irancame to an end, especially as commercial and cultural ties with theUnited States grew stronger. Many foreign policy experts in the U.S.and elsewhere agreed. "This is a regime which does not need toterrorize people on a daily level to prove it is in charge," Newtonsaid. "Everyone knows who is in charge."

Newton believed that expanded trade with the U.S. was the best wayto nudge Saddam into more civilized behavior. "We are working hard ongetting business for U.S. companies," he said. "We want to bring U.S.technology to Iraq for mutual benefit. But we have been hampered bythe low level of Exim Bank credits. Any U.S. company wanting to dobusiness here must be able to offer their own complete creditpackage, and for some of them it's a tall order."

Given Iraq's need for credit, and the reluctance of U.S.construction and oil companies to build on air, Newton recommendedthat U.S. efforts in Iraq concentrate on high technology. "This isthe only area where we can compete successfully," Newton said.

The Commerce Department seized on Newton's advice with avengeance, sponsoring trade fairs and delegations of U.S. businessmento Iraq, and relaxing the licensing requirements. In 1985, Americancompanies even succeeded in selling $700,000 worth of high-tech gearto Iraq's French-built defense electronics factory, Saad 13,including one $161,550 order for high-speed capacitors, similar toKrytron nuclear triggers. Today, faced with their abysmal record onIraq, Commerce Department officials hark back to David Newton'sadvice. "Commerce doesn't initiate policy," they say, "it merelyimplements policy." If the U.S. was selling too much high-tech toIraq, they argued, it was all the State Department's fault.

On August 15, 1985, the Iraqi Air Force launched its firstsuccessful attack against Kharg Island, Iran's principal oil exportterminal. It was a major accomplishment for the Iraqi flyers. Bombdamage assessment photographs made available at the time by Iraqiofficials showed that the Mirage F1s had scored pinpoint hits againstboth the "T" and the "H" loading jetties on either side of theisland, where super tankers had come to feed all through the war.Huge clouds of smoke were clearly visible, rising from the jettiesafter the attacks. After more than a year of threats and repeatedwarnings, the Iraqis had succeeded in piercing Iran's Hawk andSwiss-built Oerlikon air defense batteries. Iraqi pilots had not onlyhoned their skills by practising on the Super Etendard (which werereturned to France in 1985); they had also begun to take risks thatnever would have occurred to them two years earlier.

Such pinpoint accuracy could only be achieved by the most modern,laser-guided weapons. In fact, the Iraqis were the first to use theseweapons in real combat, (well before American and British pilotswould turn them with such striking effect against Iraq). They hadobtained the new weapons from France.

Aerospatiale's AS-30L missile was so advanced that the French AirForce was just receiving its first deliveries by the time the Iraqisused it against Kharg Island. It soon became one of the most potentweapons in the Iraqi arsenal. The French missile rode to its targeton a laser beam generated by a "laser designator" pod, which wascarried by the launch aircraft or by a separate plane. Either way,the laser beam locks onto its target regardless of how the aircraftmoves, leaving the pilot free to break away and take evasive actiononce he has launched the missile. "The AS-30L is so precise,"Aerospatiale executives liked to boast, "it can knock out a commandand control bunker by flying in through the window and explodinginside. It can destroy a bridge by knocking out the pylons holding itup." During the Iran-Iraq war, the command bunkers and the bridgeshappened to be Iranian. The AS30-L could also hit targets such as anoil loading jetty, no more than a few meters wide.

But the AS30-L was not purely a French creation. The sophisticatedlaser technology that went into the ATLIS (Auto Tracking LaserIllumination System) pod was developed by Martin Marietta in Americafor Thomson-CSF in France, in a $37 million contract signed in 1975.By 1978, the first successful flight tests on the laser designatorwere performed, and in 1979 the Atlis program was turned over to theFrench Air Force for final development. Thomson then turned aroundand resold the same technology to Iraq. Today, Martin Mariettainsists it had "no knowledge" of the Thomson sales to Iraq. Transferof U.S. laser technology to a third country was "restricted by theU.S. government," the company insists, because it mirrored thehigh-tech weapons then being developed for the U.S. Air Force. Inother words, the Thomson sales to Iraq were probably illegal. ButThomson-CSF was a major supplier of defense equipment to thePentagon, and may have been acting on tacit U.S. government approval,and not one word of official or even officious protest was everuttered. According to senior American diplomats then stationed inFrance, the U.S. was actively following French arms deliveries toIraq, and saw them as a means of preventing an Iraqi collapse. "TheFrench deliveries helped Iraq remain strong enough to resist. So whatdid we do? We nodded to the French."

In later attacks on Kharg, the Iraqis used yet anothersophisticated French missile, the Armat. This long-range Matramissile was specifically designed to detect and home in on enemyradar emissions, of the type used by Hawk or Patriot air defensemissile batteries. Its specifications were so classified that Matrahas never released a photograph of this missile, or its true range(believed to be upwards of 100 miles) to this day. In a classifiedinventory of Iraqi weaponry prepared by French military intelligencein August 1990, deliveries of the Armat were left blank. To furtherdisguise the transfer of this strategic missile to Iraq, Frenchintelligence identified it in the inventory under a code-name, the"Bazar." It was the type of missile that gave attacking fighters thecombat edge, because it allowed them to knock out an enemy's airdefenses before they could ever be used. Allied air forces usedprecisely this type of missile to disable Iraq's extensive network ofair defense radars and missile batteries at the start of the air warin January 1991. In U.S. inventory it is called the HARM (High-SpeedAnti-Radiation Missile), and is launched by F-4G "Wild Weasel"aircraft and the F-15E.

The Armat was not the only Iraqi Air Force system specificallytailored to counter American weaponry. In response to an Iraqirequest, Thomson-CSF built specially designed electroniccountermeasures (ECM) pods for the Iraqi Mirages, capable of jammingand deceiving NATO fighters. The Iraqis claimed they needed thisequipment, which did not exist in France (since the French Air Forceneeded to jam Soviet Air Force planes, not American ones), to defendagainst future Israeli air attacks. "They could no longer pretendthey needed to protect against Iranian air strikes," defense industrysources said, "since the Iranian Air Force had been grounded sincelate 1983 for lack of spares." Thomson designed an extensive array ofsophisticated ECM pods for Iraq, capable of deceiving front-lineAmerican fighters such as the F-15 and F-16, and even claimed theycould be used to counter US Air Force AWACS command and controlplanes. The only AWACS in the region were based in Saudi Arabia,where they were flown by the U.S. Air Force, and in Israel.

As the attacks on Kharg continued, they gave a much-needed boostto Iraqi morale. To reach Kharg safely, French technicians then inIraq explained, the Iraqi planes took off from Mosul, in the north,then refueled and took on weapons at bases in the south. "From there,they launched attacks on the Gulf, against oil tankers and againstKharg."

Even if refueled and loaded at Iraq's southernmost Mirage base,Qalit Saleh, it was still a 750 kilometer round-trip flight to Kharg,stretching the outer limits of the French Mirage. One mistake, oneextra maneuver, and the Iraqi planes would drop into the sea out ofgas. It is doubtful that Iraqi pilots were up for such a tensemission, and Kuwait Air Force officers today admit that the Iraqiswere using Kuwait's Ali al Salem Air Force base virtually at willthroughout the Iran-Iraq war. This was where Kuwait based its ownMirage F1 fleet, and its location at the head of the Gulf shortenedthe missions against Kharg by nearly 200 kilometers, a welcome boostfor Iraqi fliers. Colonel Jack Brenan, former Attorney General JohnMitchell's partner in certain Iraq deals, recalls Iraqi officersboasting that they "owned the Kuwaiti Air Force" and had "an entiresquadron in Kuwait" during the Iran-Iraq war. Suspicions of Kuwaiticollusion with Iraq prompted Iran to threaten the Emir with directmilitary intervention, and when that failed, to launch a spate ofterrorist attacks on Kuwaiti soil. Iran considered Kuwait as aco-belligerant with Iraq, because of the military and financialsupport it extended to the Baathist regime.

On September 24, 1985, French aircraft magnate Marcel Dassaultmade his last appearance on the international stage. At aprescheduled press conference held at corporate offices on the ChampsElysée in Paris, the gnome-like patriarch, with his whinynasal voice, announced the last good news his firm would hear formany years to come. Iraq had just agreed to purchase another 24Mirage F1 fighter-bombers, in the latest EQ5 and EQ6 configuration.The sale was worth roughly $1.5 billion. This was not the last Miragesale to Iraq, but it was certainly the last one that was everannounced. Dassault was 88, rich beyond imagination, and could affordto take the risk of a public announcement, to bolster confidence inhis company's performance on the increasingly-difficult exportmarket.

The fourth Mirage sale was as important for what it did notinclude, as for what it did. It was not a sale of the Mirage 2000. Bythis point, as the war continued to escalate and as oil pricesdropped, the Mirage 2000 deal had been given the axe. The Frenchgovernment was not about to set up a $6 billion export creditfacility for these planes, and there was no way Iraq could come upwith the financing itself. There was never a discussion about themoral or even the political implications of selling a low-levelpenetration fighter to Iraq. For the French, it was purely a matterof financial realism.

The major reason for this has to do with the political structurein France. The French parliament certainly provided a premier forumfor opponents to the government to express their dissatisfaction, butit was powerless to block the sale of sophisticated weaponry todictators and repressive regimes across the globe. To this day,French deputies have no say in the whole arms export process. Theyhold no hearings, they call no witnesses; they don't even have theright to information. Everything is handled behind closed doors, indiscreet discussions between the arms manufacturers and thegovernment. The lack of public scrutiny certainly made it easier forDassault to sell 133 Mirage fighters to Saddam Hussein, at anestimated cost of $5.2 billion. (The last of the French planes wasferried to Baghdad in July 1990, only days before the invasion ofKuwait). What the arms makers wanted, they usually obtained from theFrench government--with the help of the Communist trade unions whochampioned the fallacy that more arms exports meant more jobs.

From the first Mirage sale on, the French offered Iraq the "bestand the brightest" of their defense industry, sending highly-trainedtechnicians for maintenance, and dedicated instructors who would usethe most advanced simulators and air mission computers to train theirIraqi pupils. The French commitment was sealed in blood in June 1985,when two French trainers demonstrating a 155 mm howitzer in southernIraq lost their lives because of a faulty breach gasket, causing thegun to explode in their faces.

French companies were ready to take substantial commercial lossesin order to please their Iraqi customers. In 1985, for instance,Thomson-CSF was approached on two separate occasions by Iranianbuying teams, who came to the company's Paris headquarters to buysophisticated frequency-hopping radios. "They claimed to be Iraqis,"said one Thomson executive who met with the Iranians, "but theirsuitcases full of dollars made us suspicious." Finally, Thomson saidthey would check the request with the Iraqi military attachéin Paris. "We never heard from the phony buyers again."

Hassib Sabbagh, the Palestinian entrepreneur who helped revampIraq's entire higher education system in the 1970s, continued towheel and deal with Saddam in the 1980s. In 1984, his Athens-basedConsolidated Contractors Co. put together a major bid with the Germantechnology and construction giant, Mannesmann, to build the Iraqisegment of the trans-Saudi pipeline. This $508 million contract wouldhave made Sabbagh's fortune all over again, but the Iraqis gave thedeal to an Italian consortium led by SAIPEM. Although CCC andMannesmann underbid the Italians, SAIPEM offered complete financingguaranteed by future Iraqi oil deliveries. Sabbagh believes there wasa political angle as well. "The Iraqis were very angry with [WestGerman Foreign Minister] Genscher for receiving the IranianForeign Minister in Bonn," he says.

In order to patch things up, sources say Sabbagh arranged a secretmeeting between Tarek Aziz, Genscher, and Mannesmann executives inParis in 1985, which took place in the sumptuous dining room of theRenaissance palace that doubled as the residence of the Iraqiambassador to France (at that time, Mohammed al Maschat). Genscherpleaded with Aziz to intercede with Saddam on behalf of the Germanfirm. Surely if Iraq wanted to maintain its high technologicalstandards, he argued, it should expand its business with West Germancompanies. And yet, German exports to Iraq had plunged from $1.5billion in 1983, to scarcely $860 million in 1984. Aziz listened toGenscher cooly, sure he could capitalize on the German'sextraordinary eagerness to do business at any cost. "I'll see what Ican do,"Aziz said finally.

Mannesmann did not win that contract, but they were rewarded withmany other contracts in later years. Beyond the oil industry, whichwas their speciality, Mannesmann companies became major suppliers ofthe Taji military complex. The Iraqi ambassador's residence just offthe posh Ranelagh Park in Paris became a favorite tryst for the twoForeign Ministers. Genscher and Tarek Aziz met there again on July29, 1987, to discuss further contracts. It was more discreet for thetwo to meet in Paris than in Bonn or Baghdad, especially when theyhad particularly delicate business to discuss. And the German-Iraqiconnection would become increasingly delicate as time went on.

Not all West German officials scoffed at the mounting evidence ofGerman involvement in Iraqi strategic weapons programs. In 1985, theWest German chargé d'affairs in Baghdad, Dr. Arndt, becamesuspicious of the activities of some of his compatriots, who wereboasting in hotel bars of their work at a new, ultra-secretindustrial center outside Baghdad. One afternoon, diplomats inBaghdad say, Dr. Arndt took an unmarked embassy car and set out forSamarra, travelling on back roads. Did the German diplomat learn thesecret of the poison gas works and report back to Bonn? Perhaps not.But he learned enough that when the Iraqi police caught up with himin the vicinity of the Samarra complex they arrested him on the spot.He was expelled from the country within days, a fact the GermanForeign Ministry has tried to keep quiet until now. The officialstory put out on Arndt's expulsion was that he was caught in blackmarket currency trading.

By September 1985, the billion-dollar Aqaba pipeline project hadrun into political snags. At the suggestion of the Overseas PrivateInvestment Corporation, a U.S. government agency that insures U.S.companies working abroad against political risks, the primecontractor, Bechtel, had been looking for ways to reassure Iraq thatIsrael would not interfere with the new pipeline, nor threaten itonce it was built.

Fearing an Arab boycott if it got caught it in a direct businessrelationship with Israel, Bechtel worked out a deal with aGeneva-based businessman named Bruce Rappaport, to secure the Israeligovernment guarantees. Rappaport, whose Intermaritime Bank facedGeneva's Lac Leman, was a close personal friend of Prime Minister,Shimon Peres. He soon came back with a letter from Peres promisingthat Israel would leave the Iraqi pipeline alone. But the Iraqiswanted more than just pieces of paper. They wanted financialguarantees to the tune of $400 million if the Israelis attacked.

Bechtel then turned to a San Francisco lawyer named E. RobertWallach, a close friend of Attorney General Edwin Meese, to gethigh-level U.S. government guarantees to back up the Israelipromises. On June 24, 1985, with a little help from Meese, Wallachand Rappaport were invited to the White House to meet with PresidentReagan's National Security Advisor, Robert McFarlane. McFarlane gavethe project his whole-hearted support, and spoke with officials fromthe Overseas Private Investment Corporation three days later,informing them that the project was a matter of national security.The pipeline case was then handed over to David Whigg, a formerbusiness associate of CIA Director William Casey, who had beendetailed to the NSC for the task. Casey had known Rappaport beforecoming to the CIA in 1981, and apparently supported his efforts tobuild a refinery in Aqaba to process Iraqi crude.

On September 25, 1985, Wallach sent Meese a "For Your Eyes Only"memo, informing the Attorney General of unusual developments on theIsraeli side of the project. Ten days earlier, the Reverend BenjaminWeir had been released by his terrorist captors in Lebanon, the first success scored by McFarlane and the NSC in their top secretarms-for-hostage deal with Iran. Wallach wrote Meese that theIsraelis had insisted on taking credit. In a meeting with Rappaport,Israeli Prime Minister Shimon Peres "emphatically indicated that therelease of Weir was a result of the efforts of the state of Israeland no one else." Wallach went on to suggest that Peres was hopingthe U.S. would return the favor by funnelling royalty payments fromthe Iraqi pipeline into the coffers of Peres' Labor Party. Thepayments could reach $650 million to $700 million over ten years,Wallach surmised. His memo to Meese was subsequently turned over toIran-contra prosecutor, Lawrence Walsh.

That fall, the Iraqis grew increasingly wary, and governmentofficials told a visiting American trade delegation in Baghdad thatthey now had serious reservations about the deal, as did Tarek Azizduring a trip to Washington in early October.

Hassib Sabbagh, the Palestinian entrepreneur, saw great businessopportunities in the Aqaba pipeline deal. When he saw the deal goingdown the tubes, he says that his company "submitted a proposal toKing Hussein that we own the pipeline, along with a group ofJordanian investors. We were ready to build it, and own it, and payfor it," Sabbagh says. Bechtel backed the idea, probably as a lastresort, but the Iraqi government refused. By the end of the year, thedeal was dead.

Marshall Wiley's career at the State Department peaked in 1979,when he was appointed U.S. Ambassador to Oman. While he served inMuscat, the U.S. negotiated military base agreements with the Omanigovernment, and kept track of the Iranian revolution from listeningposts at the Straits of Hormuz. Wiley retired from the ForeignService in 1981 and became a trade consultant with Sidley and Austin,one of Washington's largest lobbying law firms. His speciality wasthe Arab world, and he maintained good contacts with formercolleagues in the Near East bureau at State, who helped him keepabreast of new business opportunities in the Gulf. Once the U.S.renewed diplomatic relations with Iraq in November 1984, he became anempassioned, eminently reasonable advocate of expanded trade.

Having served in Baghdad from 1975-77, Wiley understood well thepeculiar mentality of the Iraqi Baathists, and was quick to seize agolden opportunity when he saw one. "The Iraqis were not at easeworking with the U.S. private sector," he said, "because theirexperience until then had been primarily with the central planningstructures of Eastern Europe. So I thought we needed an organizationto help to get to know each other better. That's how I got the ideafor the Forum."

The "Forum" was the U.S.-Iraq Business Forum, which Wiley set upin May 1985. After finding two corporate sponsors--Westinghouse, andMobil Oil--he took the idea to Ambassador Nizar Hamdoon, who knew agood deal when he saw one. Wiley was basically offering to run Iraq'spublic relations campaign free of charge. So even before the Forumofficially opened its doors, he gave Wiley a letter of endorsementwritten on Embassy stationary. The letter advised "any United Statescompany interested in doing business with Iraq" that it "would dowell to join the Forum."

Hamdoon's letter was like a golden key to one of the most fabuloustreasure chests in the world. Wiley wasted no time in putting it touse. He began contacting Fortune 500 companies and proposing hisservices. Before the year was out, he had enough clients to warrant ameeting in Baghdad with one of the most powerful of Saddam's cronies,Deputy Premier Taha Yassin Ramadan. "I told Ramadan we were notasking for money. But we needed his cooperation to sign up U.S.companies" for the Forum. By cooperation, what Wiley meant was accessto Iraqi leaders, and to Iraqi markets. Ramadan agreedenthusiastically.

The access agreement worked both ways. "The Iraqis set up meetingsfor us when we brought trade missions to Baghdad," Wiley said. "Inreturn, they would inform us ahead of time of their visits toWashington so we could set up meetings for them. All things beingequal, the Iraqis preferred doing business with Forum members. Theyliked what we were doing." Iraqi officials made sure Americancompanies got the message that it was the Forum, or Siberia.

Wiley never registered as a lobbyist, although he probably didmore than any single individual in the U.S. to promote U.S.-Iraqitrade. "We were never a lobbying group," Wiley insists today. "Surewe kept our members informed in a timely manner of legislation thatwas pending up on the Hill. But they did the lobbying, not us."

Before long, the U.S.-Iraq Business Forum had attracted some ofAmerica's largest exporters as its members. The oil industry waswidely represented by Amoco, Exxon, Hunt Oil, Mobil, Occidental andTexaco. But the Forum also signed up companies like AT&T,Bechtel, Brown & Root, Caterpillar, Bankers Trust, GeneralMotors, Comet Rice, and defense contractors such as BMY, BellHelicopter-Textron, Lockheed, and United Technologies Corporation.Former Senator Charles Percy also joined, under the aegis of hisCharles Percy & Associates consulting firm. A former chairman ofthe Senate Foreign Relations Committee, Percy now worked as awell-paid consultant for U.S. firms eager to get business in theMiddle East.

When taken together, Forum members represented a powerful,well-organized, and effective pro-Iraq lobby, capable of twistingarms in high places when the need arose. And they never hesitated touse their clout. One of the Forum's arch enemies soon became SteveBryen's Defense Technology Security Administration, which wasthrowing cold water on many Iraqi requests for U.S. high-technologyproducts. "People at the Department of Defense were trying to blockeverything to Iraq," Wiley recalls. "But unless you are not going tosell any capital goods at all, you can never tell what will end up inmilitary factories." The only solution, Wiley argued, was to sellmore. The sheer mass of U.S. equipment going into Iraq would dilutethe relatively smaller amount that was actually fueling Saddam'smilitary dreams. "The Middle East has lots of brutal people rulingcountries," Wiley reasoned, "but that is not cause to stop all trade.If we limited our sales to countries that shared the same ideas ofcivil rights as we do, it would mean restricting our trade to NorthAmerica, Europe, and a few other places."

The Commerce Department's record of export license applicationsshows that Wiley's friends and former colleagues at the StateDepartment used their bureaucratic turf to push through high-techsales to Iraq for Forum members. Among the licenses championed by theState Department's Near East Bureau were sales of BellHelicopter-Textron 214 ST helicopters, General Motors militarytrucks, and the billion-dollar Aqaba oil pipeline that was to bebuilt by another Forum member, Bechtel. Many of the companies whoreceived funding from the Atlanta branch of the Banca Nazionale delLavoro also joined the Forum. It always paid to have extra friends inhigh places.

Wiley performed direct services for the Iraqis as well. He wroteopinion columns in the Washington Post to oppose sanctions againstIraq, identifying himself as a former Ambassador to Oman butforgetting his present functions as President of the U.S.-IraqBusiness Forum, an omission the Post should have spotted. He alsointroduced Iraqi ambassador Nizar Hamdoon to some of Washington'smovers and shakers, so the Iraqi could work the hustings himself.

Hamdoon understood that the best way to ensure Iraqi access to thehigh-technology it sought was to lull the American Jewish communityinto believing that Saddam Hussein was far less of a threat to Israelthan Ayatollah Khomeini. So he quietly began to court American Jewishleaders and friends of Israel on Capitol Hill, inviting them todiscreet dinners at his private residence.

One unusual party organized in November 1985 with Wiley's help wasthrown in honor of Representative Stephen Solarz. Wiley made surethere was high-level Administration presence. And there was. Seatedin the blue and white imitation Louis XV chairs at Hamdoon's officialresidence were Peter Rodman, head of Policy Planning at State,.HowardTeicher, the top Middle East analyst at the NSC, and RobertPelletreau, a Deputy Assistant Secretary of State for Near East andSouth Asian affairs. To round out the evening, there was Alfred H.Moses, a lawyer and former liaison to the Jewish community during theCarter administration, Judith Kipper, a Middle East specialist at theBrookings Institute, and three prominent journalists: Ken Wollack,co-editor of the Middle East Policy Survey, Don Oberdorfer of theWashington Post, and David Ignatius of the Wall Street Journal. "Itwas an amazing evening," said one guest. "Here's Steve Solarz, aJewish congressman from New York, with pro-Israelis around him,talking with an Arab from Iraq." With Marshall Wiley to grease theskids in Washington, Baghdad had found one of the most effectiveadvocates it could have possibly hoped to employ.

In September 1985, one of Wiley's former colleagues, AmbassadorRichard Fairbanks, retired from the State Department to join theWashington and New York lobbying firm of Paul, Hastings, Janofsky& Walker. Like Wiley, he became a "trade consultant." Like Wiley,his specialty was the Arab world.

After two years of hard work on Operation Staunch, Fairbanks hadsucceeded in winning the confidence of the Iraqis and other Iraqi"friends" in the Middle East, Saudi Arabia, Egypt, and Kuwait. TheU.S. was trying to limit the sale of major weapons systems to Iran,Fairbanks insisted, and he had been the one to organize that effort.

Fairbanks was also quick to capitalize on his role within theReagan Administration, and like Wiley he knew he could count on theIraqi Ambassador. "Hamdoon was impressive," Fairbanks recalls. "Hewas probably one of the most outstanding ambassadors from any Arabcountry we'd ever seen in this town. And his message was right to thepoint: Iraq wanted to expand trade with the West, and it wanted tostart right here, with the U.S."

Unlike Wiley, Fairbanks went to work as a paid lobbyist for NizarHamdoon, and registered as a foreign agent. "The Iraqi Embassy paidme the royal sum of $5,000 a month," Fairbanks says, "until I firedthem as a client in February 1990." Fairbanks says his role waslimited to providing court documents on the Iran-contra case, andlater, counselling Iraq on the USS Stark incident and the BNL affair.He also served as an unpaid advisor to the Board of the U.S.-IraqBusiness Forum. "We were trying to wean Iraq back into the MiddleEast peace process, and I felt completely comfortable repping them,"Fairbanks says now. "I am not ashamed of what I did. It is all on thepublic record. American policy was to try to draw Iraq back intoreasonable concourse and the community of nations. I am convincedeven now that it was better to try and to fail, than not to havetried at all."

Fairbanks was soon joined at the law office by James Placke, whohad served as Deputy Chief of Mission in Riyadh under Richard Murphyand had risen to become Deputy Assistant Secretary of State for SouthWest Asia and Northern Gulf Affairs by the time he retired. Plackewas articulate and energetic, and had a keen business sense. He alsoknew how to maintain his contacts back at the State Department and inthe intelligence community. Besides his friendship with RichardMurphy, Placke kept in touch almost daily with his successor incharge of Northern Gulf Affairs, Peter Burleigh.

If it hadn't been for the Iran-contra affair, which exposedanother facet of the Reagan Administration foreign policy mess, thepro-Iraq lobby would have been the only game in town. Iraq wasreceiving active support from the Department of Commerce, theDepartment of State, the White House, and the CIA--virtually everyonewho counted in the halls of power, except for Secretary of DefenseCaspar Weinberger, whose high-tech watchdogs were the only oneskeeping tabs on the Iraqi account. Dennis Kloske, who took over asUndersecretary of Commerce in May 1989, had another phrase todescribe the Pentagon boys. He called them "ankle-biters."