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Bush Secret Effort Helped Iraq Build Its War Machine : Persian Gulf: Documents show that 9 months before Hussein's invasion of Kuwait the President approved $1 billion in aid. Objections from others were suppressed.

BUSH AND AID TO IRAQ: First of three parts. Next: Reagan and Bush administrations pressure the Export-Import Bank.

February 23, 1992|DOUGLAS FRANTZ and MURRAY WAAS | SPECIAL TO THE TIMES; Frantz is a Times staff writer and Waas is a special correspondent.

WASHINGTON — In the fall of 1989, at a time when Iraq's invasion of Kuwait was only nine months away and Saddam Hussein was desperate for money to buy arms, President Bush signed a top-secret National Security Decision directive ordering closer ties with Baghdad and opening the way for $1 billion in new aid, according to classified documents and interviews.

The $1-billion commitment, in the form of loan guarantees for the purchase of U.S. farm commodities, enabled Hussein to buy needed foodstuffs on credit and to spend his scarce reserves of hard currency on the massive arms buildup that brought war to the Persian Gulf.

Getting new aid from Washington was critical for Iraq in the waning months of 1989 and the early months of 1990 because international bankers had cut off virtually all loans to Baghdad. They were alarmed that it was falling behind in repaying its debts but continuing to pour millions of dollars into arms purchases, even though the Iran-Iraq War had ended in the summer of 1988.

In addition to clearing the way for new financial aid, senior Bush aides as late as the spring of 1990 overrode concern among other government officials and insisted that Hussein continue to be allowed to buy so-called "dual use" technology--advanced equipment that could be used for both civilian and military purposes. The Iraqis were given continued access to such equipment, despite emerging evidence that they were working on nuclear arms and other weapons of mass destruction.

"Iraq is not to be singled out," National Security Council official Richard Haas declared at a high-level meeting in April, 1990, according to participants' notes, when the Commerce Department proposed curbing Iraqi purchases of militarily sensitive technology.

Invoking Bush's personal authority, Robert Kimmitt, undersecretary of state for political affairs, added: "The President doesn't want to single out Iraq."

And the pressure in 1989 and 1990 to give Hussein crucial financial assistance and maintain his access to sophisticated U.S. technology were not isolated incidents.

Rather, classified documents obtained by The Times show, they reflected a long-secret pattern of personal efforts by Bush--both as President and as vice president--to support and placate the Iraqi dictator. Repeatedly, when serious objections to helping Hussein arose within the government, Bush and aides following his directives intervened to suppress the resistance.

The White House declined to comment Saturday.

In the case of the $1 billion in commodity loan guarantees, for instance, senior Bush aides, armed with the presidential order--NSD 26--insisted that the credits be approved despite objections by officials in three government agencies. These officials warned that aid was being diverted to buy weapons in violation of American law, that the loans would not be repaid and that earlier assistance efforts were plagued by financial irregularities.

Bush's involvement began in the early 1980s as part of the so-called "tilt" toward Iraq initiated by then-President Ronald Reagan to prop up Hussein in his war with Iran. Hussein's survival was seen as vital to U.S. efforts to contain the spread of Islamic fundamentalism and thwart Iran's bid for dominance in the Middle East.

Many in the American government, including Presidents Bush and Reagan, also hoped that U.S. aid would gradually cause Hussein to moderate his ways and even play a positive role in the Middle East peace process.

But classified records show that Bush's efforts on Hussein's behalf continued well beyond the end of the Iran-Iraq War and persisted in the face of increasingly widespread warnings from inside the American government that the overall policy had become misdirected.

Moreover, it appears that instead of merely keeping Hussein afloat as a counterweight to Iran, the U.S. aid program helped him become a dangerous military power in his own right, able to threaten the very U.S. interests that the program originally was designed to protect.

Clearly, U.S. aid did not lead Hussein to become a force for peace in the volatile region. In the spring of 1990, as senior Administration officials worked to give him more financial aid, the Iraqi leader bragged that Iraq possessed chemical weapons and threatened to "burn half of Israel." Nor did he change his savagely repressive methods. In the summer of 1988, for example, he shocked the world by killing several thousand Kurds with poison gas.

Even today, the Iraqi nuclear and chemical weapons programs carried forward with the help of sophisticated American technology continue to haunt U.S. and United Nations officials as they struggle to root out elements of those programs that have survived the allied victory in the Persian Gulf War.

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