# Lifestyles & Discussion > Family, Parenting & Education > Books & Literature >  Book Review - Spider's Web: The Secret History of How the White House Illegally Armed Iraq

## FrankRep

*Strengthening Saddam's Iraq*



*Spider's Web: The Secret History of How the White House Illegally Armed Iraq*
Alan Friedman, 1993

The New American
February 21, 1994


Three days before President George Bush left office, he ordered a cruise missile attack against an Iraqi industrial complex in response to Baghdad's resistance to UN weapons inspections. The former head inspector of a UN arms team that had visited that complex on several occasions told author Alan Friedman that when he heard about that barrage he and his colleagues joked that "this was the ultimate cover-up -- to bomb the place." The inspectors knew that the technology at the plant -- used to make components for Saddam Hussein's nuclear enrichment program -- came from a company that had operated in both the U.S. and Britain and had deliberately sent military equipment to Iraq. 

	Inspector David Kay described the seeming paradox this way: "Western technology going to destroy Western technology. You had to use very advanced cruise missiles to destroy equally advanced Western products." Yet, more tragic than wry, some of the advanced war materiel sent to Saddam was also used against U.S. and allied soldiers. It is little wonder that those implicated deemed it necessary to try to conceal such dealings. 

*A Protracted Endeavor*

Building a more vigorous Iraq was a project at which Washington worked assiduously for almost a decade. The author recounts that this involved such conduits as agriculture credits and Eximbank loans, and included the transfer of sophisticated weapons and technology to Saddam. Sometimes the methods were covert, and sometimes they were more open, but the result was to create a stronger enemy. 

	Author Alan Friedman, a correspondent for the Financial Times, has painstakingly investigated this tawdry record. If his in-depth treatment at times seems narrow or one-sided, generally that is because few are willing to go on the record defending past policy toward Iraq. Friedman's documentation is wide-ranging and his sources are varied; he has also done an abundance of independent delving. 

	Gary Mihollin, an expert on Iraq's nuclear weapons capabilities, provides an apt summation to one aspect of the assistance. "The U.S. granted scores of licenses," he comments. "The government knew very well that Saddam was running a big missile and nuclear program and that the exports were almost certainly going to help both. But the State, Commerce and Energy departments acted like the three little monkeys: 'See no evil, hear no evil, and speak no evil.'"

The plotting and devious actions eventually unraveled. There came the exposure, for example, of government-backed loans to Iraq through the Agriculture Department's Commodities Credit Corporation (CCC) and Eximbank (in the latter case, some of the loans were granted after personal arm-twisting by Vice President George Bush). And those funds turned out to be financing Saddam's military ventures. Friedman demonstrates, as did the investigations by House Banking Committee Chairman Henry Gonzalez (D-TX), that the web of those aiding Iraq was extremely widespread. 

	Nonetheless, the U.S. and Italian governments were among those that tried to pin the bulk of the blame on one Christopher Drogoul, the former manager of the Atlanta branch of the Italian government-owned Banca Nazionale del Lavoro (BNL). Certainly Drogoul was complicit, and he admitted as much, but he was far from being the only guilty party. As summarized by Friedman:


As the size of the CCC program grew, so did the Atlanta branch's loans. By the end of the 1980s, Washington had approved a total of $5 billion of the loan guarantees for Iraq, making Saddam one of the biggest recipients of official U.S. largesse. BNL Atlanta financed some $1.89 billion of these loans, many of them in secret. Drogoul was thus providing more than a third of the entire lending for farm exports to Baghdad that was covered by U.S. government guarantees. Moreover, to those in the U.S. government who needed to know, Drogoul's Iraqi loans were not really a secret. In fact, the details of the Iraqi financing that he provided went straight to Washington, since the exporters informed government officials of each deal BNL Atlanta reported, filed, and stored at the Department of Agriculture.

Nor is it possible that BNL's main office in Rome, tied closely to the Italian government, knew nothing of the dealings. Rome and Baghdad were also working hand in glove, and when investigators later tried to untangle the mess, the Italian government's main efforts were directed toward lobbying Washington so indictments wouldn't point to Rome. 

*Multi-Faceted Aid*

Although vital to Saddam, taxpayer-guaranteed loans to Iraq were but one part of the U.S. build-up of Saddam's regime. Friedman goes into detail on how: 


*•* Cluster bombs were sent to Iraq via a Chilean arms manufacturer with the assistance of U.S. government officials. 
*•* A transportation company in Glasgow helped get U.S.-designed munitions, ostensibly bound for Saudi Arabia, into Iraqi hands. 
*•* An illegal arms financier who had worked with Bobby Ray Inman at the National Security Agency (and on whose board Inman later served) was involved in covert activities that helped to arm Baghdad. 
*•* A Miami-based CIA contractor also became one of Iraq's largest suppliers.

There are many more examples that could be cited in this vein. 

	Politicians and officials also gave their stamp of approval, from Whitehall to Foggy Bottom. Friedman's volume, with extensive appendices, is replete with copies of formerly classified government documents, private telexes, and the like revealing exactly what was known and by whom. These documents include: the actual "talking points" prepared for Vice President Bush to lobby the Eximbank chairman for more credits for Saddam in 1987; a telex directing BNL Atlanta to finance more than $5 million in "yarn" and "wool" for the Iraq Atomic Energy Commission in 1989; and a 1990 communication from Secretary of State James Baker to Ambassador April Glaspie noting that Iraqi officials had been in contact with the notorious Abu Nidal terrorist group. 

Governments can cause things to happen in many ways. Having "plausible deniability" is a favorite device of intelligence agencies, which use contractors to carry out their dirty work so that -if they're caught -- they can repudiate any knowledge of the operation. Several of the cases in Spider's Web are of this kind, but it takes someone who is willingly blind not to see the active hand of Washington in arming Saddam. 

	On the other hand, Friedman makes less distinction than he might have in pointing out that a case could be made for the U.S. government's tilt away from Iran during the Iran-Iraq war. Moreover, it is artless for the author, even in marshalling his evidence, not to accent Britain's long-standing penchant for balance-of-power politics. Margaret Thatcher's government, it seems apparent, was tilting toward Baghdad before the Reagan Administration did so. Still, some actions in the first part of the 1980s did have more plausibility than in the latter. 

*Bush, Baker, Saddam* 

The cease-fire in the Iran-Iraq war came in August 1988. Subsequently, the Bush Administration decided, in the words of a Baker State Department official, "to embrace Saddam in a cocoon of moderation." It was after that (on October 2, 1989) when George Bush signed NSD-26, directing "economic and political incentives for Iraq" to moderate its behavior. This for a dictator who had used poison gas on his own citizens, who was constantly improving his chemical warfare capability, and who was rushing to perfect a nuclear strike force. Aside from morality or geopolitics, even the Treasury Department was vocal (internally) in warning that the ongoing government-backed financing of Saddam constituted a "Ponzi-like" scheme. 

	Friedman remarks on what the Bush Administration knew while it was secretly formulating its pro-Iraqi foreign policy. For instance, the CIA knew of the links between BNL and the Iraqi arms procurement operation, and there were classified Agency reports sent to James Baker and others in September 1989 pinpointing Iraq's worldwide efforts to obtain the technology for nuclear weapons. 

Furthermore, according to the author, on September 21, 1989 "the U.S. Customs Service reported its suspicion that BNL Atlanta had provided loans to American companies for the illegal export to Iraq of missile technology for the nuclear-capable Condor II project. The Pentagon, Federal Reserve, and prosecutors in Atlanta were also communicating their fears about the suspected use of BNL funds for the Condor II project at the same time. Indeed, Baker had been reminded, six months earlier, in explicit terms, of how hard Iraq was working to develop its missiles and chemical and biological weapons -and both he and Bush were well aware that the Iraqi arsenal was growing fast." 

	Authoritative reports about the trans-shipment and diversion of commodities, the use of CCC funds for arms, and widespread kickback practices all indicated violations that made further extension of government-guaranteed funds not just foolish, but a violation of the law. Congress, in fact, imposed a prohibition on more Eximbank loans because of the unceasing human rights violations in Iraq. But in January 1990 President Bush determined that such a prohibition was "not in the national interest of the United States" and signed a waiver that put Saddam in line for even more hundreds of millions of dollars in loans. 

*Aftermath* 

During the Persian Gulf War, the U.S. found itself bombing its own technology. But apparently even then the arms merchants and covert operators did not rest. One of those who became involved in the secret arming of Iraq was Fred Haobsh, who worked on behalf of the CIA. His story, which involves dealing with Iraqis even during the war itself, is cold-blooded even by spook standards. Traveling with another agent to Tunis, Haobsh recalled: "Here we were in the middle of Operation Desert Storm, with the TV on twenty-four hours a day, watching the war. And we were offering to sell Saddam's procurement officer a bunch of SAM missiles. I just didn't understand it, and I became frightened." Haobsh's tale of how his life was later ruined is harrowing, mirroring those of other operatives who dropped out of the game and were hung out to dry. 

	The cover-up began, says the author, within hours of the end of the war. Indeed, when indictments started to be proposed, in the case involving BNL Atlanta, the State Department formally objected to indicting the conniving Central Bank of Iraq, although it had $1.5 billion of assets in the U.S. As one aide to Secretary of State Baker put it, referring to the time frame just before the President ordered a cease-fire with Baghdad: "As for the Central Bank of Iraq, we thought that would cause trouble because we might have to work with them after the war."

 BNL Rome also agreed to keep sending funds to Baghdad, since Saddam threatened to stop paying interest on the debt BNL had taken on from the Atlanta financing. Indeed, after Italy was largely let off the hook in criminal investigations in the U.S., the Rome office of the BNL sued in federal court demanding that, because Iraq had not paid off its U.S.-backed loans made through BNL Atlanta, the U.S. government needed to make good on the CCC loans. 

	This matter has largely disappeared from the U.S. radar screen, although there remains some legal interest in the Iraqi arms sale issue in Britain. As we write, Prime Minister John Major has been called to testify, but he has pleaded ignorance of any decision to ease arms restrictions to Saddam. As an opposition member of parliament put it, "His alibi is that he did not know what was going on in the department for which he was responsible." 

	As the lawyer for Christopher Drogoul put it, after detailing in court how his client had been operating with the knowledge of both his Rome bosses and with the support of the U.S. government: "This case is the mother of all cover-ups." His client is now in a federal penitentiary in Atlanta.

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