From: harelb@math.cornell.edu (misc.activism.progressive co-moderator)
Subject: IRAQ-GATE (II)
Followup-To: alt.activism.d
Originator: daemon@pencil.cs.missouri.edu
Organization: misc.activism.progressive on UseNet ; ACTIV-L@UMCVMB
Date: Sat, 10 Oct 1992 23:05:16 GMT



    "...But Iraq's biggest U.S. supporter sat in the Oval Office, and
    despite the repeated warnings from his own advisers, he kept the
    loan credits flowing [...] As a result, Iraq was able to pry
    another half-billion dollars out of the administration before
    August, 1990, when Saddam Hussein's army marched into Kuwait on
    boots paid for by the U.S. loans.
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    "According to congressional sources who have reviewed classified
    documents, BNL had direct ties to high-ranking officials in the
    Bush administration [..] Brent Scowcroft held over $1 million in
    stock in defense-related firms that were in a position to benefit
    from Iraq's weapons-procurement program.
 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
    "Even though the U.S. taxpayer remains on the hook for at least
    another $360 million in BNL loans to Iraq, the administration is
    stonewalling any attempt to explore the matter further.  When
    [Representative Henry] Gonzalez demanded original computer
    printouts of the export licenses granted to Iraq, the Commerce
    Department instead sent a prepared report from which sixty-six
    license records had been deleted.
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[From _Mother Jones_, July/August 1992 article by Stephen Pizzo, pp 20-22]
Mother Jones // 1663 Mission St. // San Francisco, CA 94103
Email: majones@igc.org (although they log in infrequently)
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[...]

    The raid on BNL also caused nervousness in Italy.  A classified
telex from the U.S. ambassador in Rome, Peter F. Secchia, to Secretary
of State James Baker, obtained by _Mother Jones_, voiced the Italian
bank officials' concerns: BNL was virtually owned by the Italian
government, which feared that findings of illegality could force the
United States to lift its loan guarantees and thereby stick the
Italian with as much as $1 billion in rotten loans.  The Italians
therefore "suggested that the matter should be raised to a political
level... making it fairly clear they want to achieve some kind of
damage control."

    At virtually the same time, Iraq's foreign minister, Tariq Aziz,
flew to Washington to say that, BNL mess or no BNL mess, Iraq demanded
immediate release of $1 billion in 1990 loan guarantees.

    The administration bent over backward to mollify the Iraqis.  In a
meeting with Aziz, Baker blamed the delay on Congress.  "Congress has
been influenced strongly by GOI's [government of Iraq's] use of CW
[chemical weapons agains the Kurds]," he told Aziz, according to a
classified State Department document.  But Baker assured the Iraqi
foreign minister that the administration held no such grudge against
his country.  "Our position continues to be that we we should look
forward, not back," he said to Aziz.

    Larry Eagleburger was given the job of keeping nervous
administration officials on board.  He sent letter on State Department
letterhead to key Cabinet members when they suggested that the loans
be held up.  "His efforts were critical to neutralizing OMB and
Treasury opposition to the CCC program," Gonzalez says.  As a result,
Iraq was able to pry another half-billion dollars out of the
administration before August, 1990, when Saddam Hussein's army marched
into Kuwait on boots paid for by the U.S. loans.

    Even though the U.S. taxpayer remains on the hook for at least
another $360 million in BNL loans to Iraq, the administration is
stonewalling any attempt to explore the matter further.  When Gonzalez
demanded original computer printouts of the export licenses granted to
Iraq, the Commerce Department instead sent a prepared report from
which sixty-six license records had been deleted.

   Key questions remain unanswered:

    1) Who in the Bush administration knew that CCC loans were being
diverted to military use?  The Republican-appointed U.S.  Attorney in
Atlanta with authority over the BNL case was forced to recuse himself
when it was discovered that he had worked as a consultant for
Matrix-Churchill, an Ohio firm that Treasury Department records show
to have been the key Iraq front company used in the loan-conversion
scheme.

    2) What about Brent Scowcroft, Larry Eagleburger, and Kissinger
Associates?  Before taking his State Department post, Eagleburger sat
on the board of a Yugoslavian bank, which was heavily dependent on
BNL.  Brent Scowcroft held over $1 million in stock in defense-related
firms that were in a position to benefit from Iraq's
weapons-procurement program.  Both Eagleburger and Scowcroft were in a
position to know BNL's inner workings.  What did they know, when did
they know it, and what did they tell President Bush?  According to a
State Department spokesperson: "Mr. Eagleburger did not work on the
BNL account while he was with Kissinger Associates.. Once [he] joined
{joined} the administration, his actions regarding the loan guarantees
to Iraq were in line with U.S. foreign policy- yes, he was following
the administration's lead in that matter."

    3) And what about NSD-26?  In October 1989, just weeks after the
BNL scandal threatened to plug the money pipeline to Iraq, President
Bush signed National Security Directive 26, directing all executive
departments to "improve and facilitate the U.S./ Iraq relationship."
>From that moment on, 
                                  NSD-26 different from the infamous
national-security "finding," signed by President Reagan, that provided
executive guidance for the illegal Iran-Contra operation?

    Asked recently whether he regretted providing Iraq with so much
aid during the buildup to the war, Bush told reporters, "I guess if I
had 90/90 hindsight... I'd certainly rethink our position."

    That leaves lots of important questions unanswered, but so far
only one lonely congressman from seems to care.


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[Transcribed by David Barzilai]