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Saddam Killed in the Nick of Time for U.S. Interests
By Kevin Zeese (about the author) Page 5 of 7 page(s)
NSD 26 came at the height of attempts by the Agriculture Department and other agencies to slash the largest U.S. aid program to Iraq -- the commodity loan guarantees.
Set up to help U.S. farmers increase exports, the program guarantees repayment of bank loans to foreign governments for purchases of American commodities. If the foreign government defaults on the loan, U.S. taxpayers pick up the tab.
Regulations require the Agriculture Department to allocate guarantees on the basis of the receiving country's agricultural needs, its market potential and the likelihood that the loans will be repaid. Classified documents show, however, that foreign-policy considerations played a decisive role in allocating credits to Iraq.
The Iraqis themselves raised the idea of U.S. guarantees for food aid in 1983, a time when U.S.
officials feared that Hussein might be overthrown because of food shortages caused by the Iran-Iraq
War.
Before the year was out, the first $402 million in Agriculture Department loan guarantees was
approved for Iraq. In 1984, the amount rose to $513 million and it eventually reached $1.1 billion
in 1988.
As the guarantees increased, so did concerns. The primary forum for airing these anxieties was a little-known, interagency organization called the National Advisory Council.
Advisory Council documents show that beginning in 1985, a number of members representing the Federal Reserve Board, Treasury Department and the Export-Import Bank counseled or voted at different times against increases of aid to Iraq. They feared that Iraq was not credit-worthy and would not be able to repay the billions owed.
Their concerns intensified when on Aug. 4, 1989, FBI and Customs Service agents raided the Atlanta branch of an Italian bank, Banca Nazionale del Lavoro, and uncovered $4 billion in unauthorized loans to Iraq, including $900 million guaranteed by the Agriculture Department program.
Nevertheless, top Bush Administration officials, including Secretary of State Baker, discounted the protests in the interagency group and sought another $1 billion in loan guarantees for Iraq in the fall of 1989, to be given in two installments.
By early 1990, Iraq had used the first $500 million and was asking for the second installment. The NSC and the State Department pressed to have the aid released.
Again there was resistance. Iraqi officials had been implicated more deeply in the growing Banca Nazionale affair and government analysts were more skeptical about Iraq's ability to repay its growing foreign debt because it was spending so much on arms.
"In the worst-case scenario, investigators would find a direct link to financing Iraqi military expenditures, particularly the Condor missile," Paul Dickerson, head of the Agriculture Department program that aided the Iraqis, wrote in a Feb. 23, 1990, memo to his superior.
Condor was an Iraqi effort to develop an intercontinental missile capable of delivering a nuclear warhead. While Dickerson later told a congressional committee that he was only speculating about the Condor, his warning reflected growing evidence that the Agriculture aid had gone for military uses.
Then on March 27, 1990, the U.S. Customs Service thwarted an effort by Iraq to obtain American-made triggers for nuclear weapons. And in a speech that same month, Hussein issued his threat to "burn half of Israel." Publicly, at least, President Bush promised a crackdown on exports to Iraq, saying that "nuclear proliferation . . . continues to pose serious threats to U.S. interests, as well as the interests of our friends in the region."
On April 16, 1990, CIA Director Robert M. Gates, then deputy national security adviser, chaired an interagency meeting to discuss Iraqi policy. At that meeting, Commerce Undersecretary Dennis Kloske presented a variety of proposals to restrict licenses of high-tech technology with potential military uses to Iraq. The proposals were rejected.
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