Daghir dithered for months20 about how CSI should ship the capacitors. Supnick, in turn, tried to lure Daghir to San Diego to pick them up in person. It was March 1990 before the two sides agreed that the devices would be shipped to Euromac in London for transshipment to the Middle East. Daghir sent an end-user certificate issued in the name of the Baghdad University of Technology and declaring that the capacitors were destined for use as part of a carbon-dioxide laser system.
Supnick alerted British Customs to the impending shipment of forty capacitors, which arrived at Heathrow on 20 March 1990. According to a subsequent parliamentary inquiry, “On arrival at Heathrow21 the crate was secured by officers in Customs ID and substituted by a similarly packaged crate containing inert and inoperable capacitors.” Seven days later, the inoperable capacitors were delivered to Euromac, where Daghir and his staff repackaged them in two boxes. The next day, 28 March, Daghir, Speckman, and an assistant drove the two boxes to Heathrow to deliver them to an Iraqi Airways flight. “At this stage,”22 the parliamentary inquiry concludes, “the boxes were intercepted and detained by Customs ID officers. Various individuals were arrested, including Mr. Daghir, Mrs. Speckman, and Mr. Amyuni. The business premises of Euromac (London) Ltd. were searched.” The three were jointly charged with attempting to export illegal goods.23
Just as the U.S. government had been puzzled about why Iraq would be buying large quantities of uranium ore when it supposedly lacked facilities for enrichment, so also was it puzzled, after the Euromac arrests, about why Iraq would be buying firing-set components for nuclear weapons when it was believed to be years away from actually building such weapons. The defense correspondent of the London Guardian speculated in a story published the day after the Euromac arrests that “Iraq may be close24 to testing a weapon, perhaps using the enriched uranium it had prepared for its Osirak reactor”—at Tuwaitha—“until the Israeli air force bombed it in 1981.” It was a good guess, better certainly than U.S. estimates, which put an Iraqi atomic bomb five years or more away.
One explanation for the differing estimates is simply differing interpretations of what a bomb program might be. One bomb doesn’t make a program, nor would any rational leader destroy his only cache of fissile material in a test. On the other hand, efforts to buy krytrons and capacitors should have signaled the possibility that Iraq was advancing in the development of a working bomb design, which could be tested and perfected with an inert core to be made ready when sufficient fissile material came to hand. That was, in fact, the case; in that strategy also, the Iraqi bomb project of the 1980s was modeled on the American Manhattan Project of the 1940s, proceeding along multiple parallel lines of development with the expectation that some would fall by the wayside while others progressed. In Iraq’s case, some had already fallen by the wayside by 1988—in particular, uranium enrichment by gaseous diffusion,25 for which the Iraqis had been unable to develop an effective diffusion material, called “barrier.” (Gaseous diffusion involves forcing a gaseous compound of natural uranium at high pressure through a material with microscopic pores; the lighter U235 component diffuses at a slightly faster rate than the heavier U238 component, and by piping off the enriched gas and diffusing it repeatedly, hundreds or thousands of times, any degree of enrichment can be attained.) A 1987 test with uranium hexafluoride gas had failed when the barrier clogged. Laboratory-scale gaseous-diffusion research continued in Iraq using anodized aluminum as a barrier material, but the larger program turned to other approaches.
Little or none of this was known to the administration of George H. W. Bush, who took office as president in January 1989 promising vigilance against nuclear proliferation. During the Reagan years, when he was vice president, Bush had championed the tilt toward Iraq, and he continued to seek rapprochement with Saddam Hussein in the first years of his presidency. National security was certainly one reason he did so. The prospect of Iran under the Ayatollah Khomeini turning off the spigot of Middle Eastern oil argued for supporting Iraq as a counterweight. And anti-Communist fervor still fogged the mirrors in the State Department: “The Soviets have strong cards26 to play” in the Middle East, a deputy secretary of state wrote in a secret memo to senior government officials in 1988; in the official’s view, the United States for that reason alone should pursue closer ties with Iraq.
More generally, Bush and his new secretary of state, James Baker, saw an opportunity to increase American influence in the Middle East, commercial as well as strategic, by rewarding improved Iraqi behavior. According to the investigative journalist Alan Friedman, a transition-team policy review at the outset of Bush’s presidency “had advised the president-elect27 that it was time to set a new direction for U.S. policy toward Iraq.” The new administration now had the choice, the review proposed, “to decide whether to treat Iraq as a distasteful dictatorship to be shunned where possible, or to recognize Iraq’s present and potential power in the region and accord it relatively high priority. We strongly urge the latter view.” The lessons of war, the review continued, “may have changed Iraq from a radical state challenging the system to a more responsible, status-quo state working within the system and promoting stability in the region.” The review offered no evidence for this hypothetical Iraqi transformation; in fact, it judged that “few expect a humane regime will come to Iraq any time soon.” It nevertheless endorsed “military exchanges” and “higher level dialogue.” Trade was the key, Friedman says in summarizing the review’s culminating argument, despite “the risk of ‘diversion’ of U.S. exports to Iraq’s war machine.”
Indeed, the policy review articulated a prime U.S. business interest that influenced Bush and Baker in their thinking: Iraq’s “vast oil reserves,” which promised “a lucrative market for U.S. goods.” The review noted that U.S. oil imports from Iraq had skyrocketed after Iraq began offering American oil companies “large price incentives.”
The idea, as one of the officials involved in preparing these recommendations at Baker’s State Department summarized it, was “to embrace Saddam in a cocoon of moderation.”
Bush agreed. On 2 October 1989 he signed National Security Directive 26. Its gist: “Normal relations between28 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 to increase our influence with Iraq.” Before the end of the month, Baker endorsed29 extending Iraq up to a billion dollars in Commodity Credit Corporation (CCC) agricultural-product loan guarantees even though it faced “severe financial difficulties” that might prevent repayment; doing so, the action memorandum noted, was “in line with NSD-26.”
At least one tough-minded, skeptical senior congressman—Henry Gonzalez, the Democratic chairman of the House banking committee—thought the explanation for Bush’s Iraq initiatives was straightforward: oil. Tall, elegant, eloquent, and a relentless crusader, Gonzalez had begun dogging the Bush administration about Iraq after the FBI raided the Atlanta offices of the Banca Nazionale del Lavoro—BNL—in August 1989. BNL, Gonzalez would tell the House in 1992 in one of his biting hour-long speeches, was “one of the largest banks in Italy,30 with assets of over $100 billion.” It was “98 percent owned by the Italian Government” and had operations around the world. As the FBI raid had established, former employees of the Atlanta branch had “conspired to provide the Government of Iraq with over $4 billion in unreported loans between 1985 and 1990.… The $4-billion-plus in BNL loans to Iraq … were crucial to Iraqi efforts to feed its people and to build weapons of mass destruction. In addition, the BNL loans were crucial to Reagan and Bush administration efforts to assist Saddam Hussein.” An intense Bush administration effort at stonewalling and cover-up,31 led by Brent Scowcroft at the National Security Council and Lawrence Eagleburger at the State Department, followed the BNL revelations. Bush himself participated32 in stonewalling Congress.
In one of his most devastating
House speeches, Gonzalez took note of the correlation between U.S. oil imports from Iraq and U.S. sales to Iraq of military and dual-use equipment. “That raid by the FBI on August 4, 1989,” he told the House, “led to the unraveling not only of one of the biggest banking scandals of all time, it also laid bare that the United States was carrying on a strange, secretive, clandestine relationship with Iraq, which was at that time and still is today one of the most notorious governments in the world. It was Iraq, after all, that had used chemical weapons not just against its Iranian enemies but against its own Kurdish minority.” Gonzalez continued:
Despite all this, the United States33 allowed Iraq to become the biggest customer of the Commodity Credit Corporation, a guaranteed program. Guaranteed by whom? The taxpayers, of course. That was financed largely through loans made by the BNL Atlanta office. Not only that, Iraq operated an extensive secret military procurement network in this country and in Europe which was also financed through BNL Atlanta, not through CCC guarantees but through commercial loans.… The U.S. Government knew about the secret procurement network, and it made a decision, and that decision was to tolerate it, even after the BNL office was raided in 1989.
Consider this: the BNL Atlanta office was raided on August 4, 1989. The raid revealed that BNL was funding Matrix Churchill Ltd. and Matrix Churchill Corp., known Iraqi procurement fronts. The raid also revealed that Iraq was funding several other firms, including TDG, TEG and Euromac, that the CIA linked to Iraq’s clandestine military procurement network. Our intelligence knew all of this.… The Secretary of State was advised, the President was advised.… Yet just a few months later, after warning its allies in Europe to be alert to Iraqi efforts to buy glass fiber technology,* the U.S. Government—that is, this administration and the immediate past one—approved a Matrix Churchill export license for the sale of the complex fiber factory to Iraq’s largest armaments producer.
In fact, the Bush administration continued to approve the sale of military-useful technology to Iraq even when that technology was known to be destined for Iraqi arms factories. This policy was in place right up until Iraq invaded Kuwait.
Then Gonzalez drew the link with oil sales, citing a “recently-declassified State Department memorandum to Secretary Baker dated March 23, 1989.”
The memo states34:
“Iraq would also like freer export licensing procedures for high tech.”
The memorandum also states:
“As part of its approach to the United States, Iraq has in the last year given favorable deals to U.S. oil companies; oil exports to the U.S. have soared to around 500,000 barrels per day.”
Giving favorable oil deals to U.S. firms furthered Iraq’s ultimate strategy of increasing its importance to the United States. The success of this plan, as measured by oil sales, is illustrated in a recently declassified CIA report dated April 1990 which states:
“The U.S. purchase of Iraqi oil has jumped from about 80,000 barrels per day in 1985–1987 to 675,000 b/d so far in 1990—about 24 percent of Baghdad’s total oil exports and eight percent of new U.S. oil imports.”
By the time Iraq invaded Kuwait, United States purchase of Iraqi oil had grown to over 1.1 million barrels per day. The largest single purchaser was Exxon, but there were many others.
Within days of Iraq’s invasion of Kuwait, Bush signed a conflict-of-interest waiver to protect high-level officials of his government from prosecution for conflicts of interest—oil holdings in particular—related to what the waiver called “the current Middle East crisis.”35 The waiver included James Baker, Brent Scowcroft, and nine other cabinet members and security advisers.
Gonzalez concluded his House presentation with a devastating summary of the Bush administration’s collusions with Saddam Hussein:
In short, these are the facts36: First, the administration wanted to help Iraq; second, Iraq had cheap oil to offer and the United States was eager to buy—as shown by the amazing 50 percent growth in Iraqi oil sales to the United States in the two years before the Gulf war; third, the Bush administration was so eager to please Saddam Hussein that it deliberately tolerated Iraq’s military procurement activities in the United States; fourth, companies like Matrix Churchill were used by Iraq to provide everything from steel mills to nuclear-weapons-useful technology—right up to the day the Gulf war started; and fifth, even after the BNL raid made it impossible to hide Iraq’s procurement activities in this country, the Bush administration did nothing to stop Iraq. They even showed support by having the Department of Energy purchase Iraqi oil just a few months before our Government went to war against Iraq. Favorable oil deals made it all possible.
WHEN NEW YORK CONGRESSMAN Charles Schumer surveyed the wreckage of Bush policy later, he called it “President Bush’s Frankenstein.”37 Saddam Hussein, Schumer charged, had been created “in the White House laboratory with a collection of government programs, banks and private companies.”
If greed played a part in the Bush administration’s collusion with Iraq, an alliance with the secular Middle Eastern state against a revolutionary Muslim state that had shown itself to be passionately hostile to the United States—Iran—was clearly Bush and Baker’s larger motive, as it had been the Reagan administration’s before. The strategy backfired in 1990 as Saddam Hussein, after repeated delays and defaults, found his sources of income increasingly reduced or cut off and began looking upon his neighbor, Kuwait, as an ill-guarded bank to rob. Demanding forgiveness of his debts and support for reconstruction, he told the Arab Cooperation Council at a February 1990 summit in Jordan, “Let the Gulf regimes know38 that if they do not give this money to me, I will know how to get it.” Whether convinced himself or simply bluffing, he portrayed the United States as a paper tiger, fearful of conflict after its loss in Vietnam: “Brothers,” he told the council, “the weakness of a big body39 lies in its bulkiness.… We saw that the United States as a superpower departed Lebanon immediately when some marines were killed, the very men who are considered to be the most prominent symbol of its arrogance.… The United States has been defeated in some combat arenas for all the forces it possesses, and it has displayed signs of fatigue, frustration, and hesitation.” In a television speech on 2 April, to warn off Israel, he threatened it with chemical weapons and perhaps alluded to a nuclear capability (which he did not yet have): “By Allah, we will make40 the fire eat up half of Israel if it tries to do anything against Iraq.”
Crucially, he took the American government’s years of support as a sign that the United States would tolerate an Iraqi invasion of Kuwait. His notorious 25 July 1990 meeting with the U.S. ambassador to Iraq, April Glaspie, added to that conviction. He used the occasion to rehearse his grievances:
Iraq came out of the war41 burdened with $40 billion debts, excluding the aid given by Arab states, some of whom consider that too to be a debt although they knew—and you knew too—that without Iraq they would not have had these sums and the future of the region would have been entirely different. We began to face the policy of the drop in the price of oil.… When planned and deliberate policy forces the price of oil down without good commercial reasons, then that means another war against Iraq. Because military war kills people by bleeding them, and economic war kills their humanity by depriving them of their chance to have a good standard of living. As you know, we gave rivers of blood in a war that lasted eight years, but we did not lose our humanity. Iraqis have a right to live proudly. We do not accept that anyone could injure Iraqi pride or the Iraqi right to have high standards of living. Kuwait and the U.A.E. [United Arab Emirates] were at the front of this policy aimed at lowering Iraq’s position and depriving its people of higher economic standards.
Grievances against his brother Arab states led Saddam next to make veiled threats against the United States in response to threats he felt the U.S. had recently made against Iraq:
So what can it mean42 when America says it will now protect its friends? It can only mean prejudice against Iraq. This stance plus m
aneuvers and statements which have been made have encouraged the U.A.E. and Kuwait to disregard Iraqi rights.… The United States must have a better understanding of the situation and declare who it wants to have relations with and who its enemies are.… It is not reasonable to ask people to bleed rivers of blood for eight years then to tell them, “Now you have to accept aggression from Kuwait, the U.A.E., or from the U.S. or from Israel.”
Glaspie responded,43 when the Iraqi dictator finally gave her a chance, by emphasizing that she had “a direct instruction from the President to seek better relations with Iraq.” Saddam asked, “But how? We too have this desire. But matters are running contrary to this desire.” Glaspie emphasized the importance of continuing to talk, criticized the “American media” for portraying Saddam in a bad light—“These are the methods the Western media employs,” she said disdainfully—and then segued to a discussion of the importance of keeping the price of oil low. Abruptly, in almost a non sequitur, she added: “But we have no opinion on the Arab-Arab conflicts, like your border disagreement with Kuwait. I was in the American Embassy in Kuwait during the late sixties. The instruction we had during this period was that we should express no opinion on this issue and that the issue is not associated with America. James Baker has directed our official spokesmen to emphasize this instruction. We hope you can solve this problem using any suitable methods via [Chedli] Klibi [the secretary-general of the Arab League] or via [Egyptian] President [Hosni] Mubarak.”
Apparently Glaspie was indicating that her government hoped for a peaceful negotiation, perhaps through the intervention of the Arab League or of Egypt. Saddam’s response was to rehearse his grievances once again, lugubriously, this time emphasizing Kuwait:
We want to find a just solution which will give us our rights but not deprive others of their rights. But at the same time, we want others to know that our patience is running out regarding their action, which is harming even the milk our children drink, and the pensions of the widow who lost her husband during the war, and the pensions of the orphans who lost their parents.…