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Washington Report on Middle East Affairs, June 1992, Page 7, 8, 91

Special Report

In House Probe of Reagan, Bush, Saddam Ties, Where's The Beef?

By Richard H. Curtiss

"The policy toward Iraq is by far the most tragic foreign policy episode of the Bush and Reagan administrations. . . It is a policy that ended in war and the loss of many precious lives-and with no long-term goal achieved."
-Rep. Henry B. Gonzalez (D-TX), February 1992

It's a familiar story. Two tyrants are fighting for an area so important that anyone who controls it could blackmail the world. One fills his jails with real and imagined political opponents and jams the overflow into concentration camps where they are worked or starved to death. The other secretly executes potential opponents in prison cellars and ships whole populations off to work camps where, eventually, their bodies are bulldozed into unmarked mass graves.

For the United States there is no real distinction between these monsters until it becomes clear that, in the absence of foreign intervention, one will win the war they are fighting and dominate the region. To prevent that, the president joins other world leaders in stopping the stronger country by helping the weaker one, which eventually prevails.

Having redressed the regional balance of power, the president and his allies do not break off the ties that saved the leader of the weaker country. Instead they offer him trade and technology to restore stability to a strategic area. Barely two years after his narrow escape, however, the victorious tyrant demands that his benefactors withdraw their forces from the area, accelerates the abuse of his own people, and his armed forces again try to subjugate his neighbors.

That is how the Cold War began, 45 years ago, with Soviet Premier Josef Stalin installing puppet rulers in the European countries his forces had occupied with U.S.-supplied arms at the end of World War II. Unfortunately, the American reaction to Stalin's resumption of tyranny was not confined to returning U.S. forces to defensive positions in Europe.

It also included a domestic name-calling and finger-pointing, as Republican leaders demagogued their Democratic opponents over concessions to Stalin by Presidents Franklin D. Roosevelt at Yalta during World War II and Harry Truman at Potsdam after Adolf Hitler's defeat. This culminated in "McCarthyism," guilt by wartime and immediate postwar association with the communist ally turned enemy.

In fact, despite the hysteria inspired by Sen. Joseph McCarthy and the Korean and Vietnam Wars, there was no civilization-destroying nuclear World War III because Americans remained largely united. They know then that during and after World War II the U.S. had gone more than halfway in seeking to keep the peace with the U.S.S.R. As a result, 40 years after the outbreak of the Korean War, the Berlin Wall and all that it represented came tumbling down.

The Persian Gulf has just been saved from sole domination by either Iran or Iraq.

These lessons of history may be lost on the new finger-pointers over U.S. wartime and postwar association with Iraq's President Saddam Hussain. Prompted by the ubiquitous Israel lobby, a few Democrats are having their fling with the same myopic and divisive tactics used against them by Wisconsin Republican McCarthy 40 years ago.

Rep. Henrey Gonzalez, quoted above, seems unimpressed that the Persian Gulf region, containing two-thirds of the world's petroleum reserves, has just been saved from sole domination by either Iran or Iraq.

Nor does he acknowledge as a triumph of diplomacy by the U.S. and its allies the fact that all nations have access to petroleum at about the same prices prevailing before the decade of Gulf warfare began in 1980. Without the U.S. diplomacy that first blocked Khomeini's Iran and then Saddam's Iraq from seizing the entire area, the price of petroleum might have quadrupled, plunging the industrialized world into a major depression and most of the Third World into famine.

Instead, Gonzalez is giving Americans an inquisition, based upon 20-20 U.S. foreign policy hindsight, by the House Banking Committee, which also conducted December 1990 hearings into the Bush administration's military buildup in the Gulf.

The first investigation was triggered by Gonzalez's hope that the U.S. could settle differences with Iraq over its invasion of Kuwait without resort to military force. He admits his second foray into Middle East policy is based on a February series of sensationally presented articles by Douglas Frantz and Murray Waas in the normally staid Los Angeles Times.

Franz and Waas assembled gleanings from congressional testimony and declassified documents that amounted, in toto, to nothing significant that wasn't already widely known. What they skipped, just as in the Iran-Contra hearings five years earlier, was any hint of Israel's consistently destructive role in the entire saga of U.S. involvement in the Iran-Iraq war and all that followed. Soundbites by Banking Committee members that began in February reflected the finger-pointing tone set by Franz and Waas.

"We now learn that the same president who sent our sons and daughters to fight a war also empowered the monster we were fighting by sending them [sic] a billion dollars in foreign aid," proclaimed committee member Maxine Waters (D-CA).

"Who was really advising this policy of appeasement?" asked committee member Jim Slattery (D-KS). "Was it the president, the vice president, aides in the White House, or all of the above?"

Why Gonzalez, who takes no political action committee money and whose voting record on Middle East issues wouldn't qualify him for pro-Israel PAC donations anyway, chose this subject to investigate isn't clear. His supporters in Texas insist he is motivated by patriotism, not politics.

A Different Conclusion

Los Angeles Times Washington correspondent Paul Houston drew a different conclusion from the Gonzalez, Waters and Slattery statements. "Their remarks suggested that Democrats may try to use the disclosures in election campaigns this year if they are assailed for voting against Bush's request to wage war against Iraq," he wrote.

The theme of the committee hearings is that in maneuvering between Middle Eastern tyrants and, not incidently, compensating Iraq for the dirty tricks carried out on Iran's behalf not only by Israel but also by Oliver North, George Bush appeased Saddam Hussain-even repeating the failed Rooseveltian experiment of trying to make a tyrant into a gentleman by treating him like one.

Anyone with a firm grip on current history may be forgiven, however, for concluding that the sensational (and misleading) headlines of the Franz and Waas articles were motivated by the fact that Bush is not giving Israel the unconditional U.S. loan guarantees it demands, and because it's an election year.

There is little in the articles except bickering about who told what, and when, to Congress, and which European and Middle Eastern banks were involved in reselling U.S. grain purchased by Iraq for weapons to build up Iraq's army. So far six U.S. tobacco companies have admitted they paid kickbacks to Iraqi officials, but their admissions were made in 1990, two years before the articles were written or the Banking Committee investigation began.

Anthony Lewis of The New York Times, in a March 15 column headlined "Who Fed This Caesar?" condensed all of the charges in the Los Angeles Times series into a bill of indictment of his own. The first change, in the words of Anthony Lewis:

"In 1982 the Reagan administration, wanting to prevent Saddam Hussain's defeat in the war with Iran, decided to provide him with secret intelligence. The intelligence helped Iraq learn the disposition of Iranian forces. . . In August 1988 a cease-fire ended the Iran-Iraq war. But the American tilt toward Iraq continued. Some intelligence was being provided as late as May 1990."

Lewis's charge is correct, but woefully incomplete. In fact, immediately upon taking office in January 1981, four months after Saddam Hussain's forces invaded Iran, the Reagan administration permitted Israel to ship some U.S. arms to Iran, not Iraq. It is almost certain, as the writer pointed out in this magazine in 1987, that these shipments in the first half of 1981 were a "payback" to the Khomeini regime for not releasing U.S. Embassy hostages in Tehran until after Ronald Reagan had won the November 1980 elections from Jimmy Carter. (The hostages were released the following January, 15 minutes after the inauguration of President Reagan.)

Problems arose because Israel continued, apparently without any further U.S. authorization until late 1985, to ship large amounts of U.S. arms to Iran throughout the war, although U.S. military specialists warned the Reagan administration in late 1981 that the Israeli-furnished U.S. TOW anti-tank missiles and Hawk anti-aircraft missiles were helping Iran to win the war against Iraq.

According to a report by Senate Intelligence Committee Chairman David Boren (D-OK), in 1984 President Reagan authorized the CIA "to share limited intelligence" with Iraq "to forestall a total Iraqi collapse in its war with Iran." The relationship was expanded in 1986 "to enhance Iraq's pursuit of the war" and "continued on a sporadic basis until 1988 when the war ended."

Challenging that account, Gonzalez stated that records showed that secret intelligence sharing was continuing as late as May 1990.

"There were three levels of cooperation," Boren responded. "Significant sharing that ended in 1988; less significant until March 1990; and the last a mere formality. I don't know if they had coffee together or what, but people would see each other and keep at least some sort of relationship. It wasn't officially broken until our diplomats walked out of the country (in September 1990 after Iraq's invasion of Kuwait)."

This answer by the senior Democrat on the Senate Intelligence Committee responds to everything in Lewis's charge except the actual date the cooperation began. In the Jan. 27 New York Times, journalist Seymour Hersh already had dealt with that:

"Iraq was on the verge of being overrun by Iran."

"The Reagan administration secretly decided to provide highly classified intelligence to Iraq in the spring of 1982-more than two years earlier than previously disclosed-while also permitting the sale of American-made arms to Baghdad in a successful effort to help President Saddam Hussain avert imminent defeat in the war with Iran, former intelligence and State Department officials say. The American decision to lend crucial help to Baghdad so early in the 1980-88 war came after American intelligence agencies warned that Iraq was on the verge of being overrun by Iran, whose army was bolstered the year before by covert shipments of American-made weapons."

That earlier Hersh report also sheds light on Lewis's second charge: "The administration also allowed Iraq's regional allies, which at the time included Saudi Arabia, Kuwait and Jordan, to send Baghdad American-made arms. Among the weapons supplied were thousands of TOW anti-tank missiles, Huey helicopters, small arms and mortars."

No one seriously contests this charge, except for the record, and that only because, as Hersh reports, it began two years before the Reagan administration informed Congress about it. The reason, according to Hersh's Jan. 27 article:

"One Reagan administration official who spent dozens of hours testifying before the intelligence committees said he believed that the Iraqi program should have been presented to the committees, but was not because of a concern that the members of the committee who supported Israel would object. The decision to help Iraq was 'not a C.I.A. rogue initiative,' a former senior State Department official explained. The policy was researched at the State Department and 'approved at the highest levels,' he said. The idea, he added, was not to 'hitch our wagon to Hussain. We wanted to avoid victory by both sides,' he said."

Lewis's next charge: "In the same year [1982] the State Department removed Iraq from the official list of terrorist countries, thereby making it eligible for U.S. aid. In fact, Saddam Hussain continued to harbor terrorists, and we knew it."

Says former Reagan White House Middle East specialist Geoffrey Kemp: "The tilt was absolutely justified. . . You have to remember the magnitude of the problem in the spring of 1982. The Iraqis had suffered stunning reversals on the battlefield. We were terrified [that Iran would seize Kuwait]."

Another Reagan administration National Security Council adviser, Howard Teicher, later fired for his part in Irangate (he carried the key-shaped cake while Robert McFarlane carried the Bible to Tehran in an effort to ransom U.S. hostages in Lebanon with arms for the Khomeini regime) says, "the basic decision was made March 15, 1982, when Iraq was taken off the terrorist list. . . The political decision was made to help [the Iraqis] help themselves-to show them how they were vulnerable."

Next charge: "The United States immediately began giving Iraq guarantees for credit to buy American farm products. Farm and other credits for Iraq eventually came to $3 billion-no doubt freeing Saddam Hussain to spend money on arms."

That, of course, is exactly what the Reagan administration wanted Iraq to do, in order not to lose the war to Khomeini's Iran. It's bizarre that this has become a recrimination.

Next charge: "The Los Angeles Times described George Bush as playing a leading part in pressing U.S. support for Iraq over the next years, acting first as vice president."

The record certainly is clear on that one. Waas and Franz themselves quote the highly classified minutes of a July 23, 1986 inter-agency planning group meeting held two days before then-Vice President Bush embarked on a 10-day trip to Jordan, Egypt and other Middle East countries:

"We have encouraged the vice president to suggest to both King Hussein and President Mubarak that they sustain their efforts to convey our shared views to Saddam regarding Iraq's use of its air resources," the minutes said.

On Aug. 4, as requested by the U.S. government, Bush met privately with Mubarak in Cairo and asked him to advise Saddam Hussain to make better use of his air force against Iranian troops. Understandably, Saddam, whose own intelligence had informed him that Israel was shipping American arms to Iran, had become suspicious of the U.S. advice he was getting.

Recalls Iraqi arms dealer Sarkis Soghanalian, who was in constant touch with both Saddam Hussain and his generals at that time: "Sometimes [the U.S. intelligence] was good and sometimes it was bad. The Iraqis felt that [the U.S.] was playing both ends against the middle."

The Real "Rogue Operation"

The Iraqis were right. Unfortunately, the real "rogue operation" being conducted at that time by McFarlane, North, Adm. John Poindexter, Michael Ledeen, Teicher and others in the White House through Israel with Iran is not what's under investigation by Gonzalez or any other congressional committee.

Next charge: "In June 1984 Vice President Bush telephoned the president of the Export-Import Bank to urge approval of a $500 million loan guarantee for Iraq to build an oil pipeline. Ex-Im, which had been reluctant, approved. . . In February 1987 Vice President Bush telephoned the Ex-Im president to press for $200 million in loan guarantees. Economists warned the bank that Iraq could not repay the loans, but the bank approved the guarantees.

Perhaps the Gonzalez committee will extend its investigation into why this pipeline for which Bush sought loan guarantees, and which would have enabled Iraq to sell enough oil to pay for more of the arms it was using against Iran, was never built.

Other investigations have indicated that one reason was a suggestion from the Israeli Labor Party's then-Prime Minister Shimon Peres, relayed through intermediaries, that Iraq or the U.S. should pay hundreds of millions of dollars to the Israeli Labor Party as protection money to assure that Israel Defense Forces would not put the pipeline out of action after it was completed.

Next charge: "In March 1987 the Commerce Department approved export licenses for shipment to Iraq of dual-use technology, useful for scientific or military purposes. Over the next few years exports of this kind totaled $600 million, and much of the equipment may have gone into aerial spying and other military uses."

After a House subcommittee's investigation of reports of sensitive U.S. technology exports to Iraq, its chairman, Sam Gejdenson (D-CT), reported that the Commerce Department's export control system "did not break down." Said Gejdenson: "Saddam Hussain got the equipment the State Department wanted him to have. [It was] U.S. foreign policy to assist the regime of Saddam Hussain."

So much for the charges against Reagan administration policies, and Bush's role in Lewis are centered on U.S. government actions after Bush was elected president:

"In 1989 Mr. Bush, now president, signed a national security order directing government agencies to improve ties with Iraq. . . In October 1989 Secretary of State James Baker telephoned Clayton Yeutter, then secretary of agriculture, and urged him to approve $1 billion in new loan guarantees to Iraq despite fears that the credits were being misused. In November Mr. Yeutter approved the guarantees.

"In January 1990 President Bush signed an executive order finding that it would not be 'in the national interest' for the Ex-Im bank to stop loan guarantees to Iraq. In April and again in June 1990 the Commerce Department proposed restrictions on high-technology exports to Iraq. An inter-agency group chaired by Robert H. Gates, then deputy national security adviser to President Bush, rejected the proposals.

"In July 1990 the Senate voted overwhelmingly to cut off loan guarantees to Iraq because of Saddam Hussain's human rights violations, including the gassing of a Kurdish village. The administration condemned the vote. On July 31, with 100,000 Iraqi troops massed at the Kuwait border, Asst. Sec. of State John Kelly went to Capitol Hill and testified against ending loan guarantees to Iraq. On Aug. 2, 1990, Iraq invaded Kuwait."

That's the whole bill of particulars, not set up as a strawman by this writer, but by journalist Anthony Lewis, who apparently agreed on the need for an investigation.

Responding, CIA Director Robert Gates told the Banking Committee frankly on May 8 that the U.S. intelligence community had assured Bush in the fall of 1989 that the Iraqi president would not be in a position to attack his neighbors for two or three years.

"We provided them with a message of reassurance in terms of Saddam's intentions, and we were wrong," Gates testified. "That estimate essentially said. . . that he will focus on rebuilding internally. . . "

That soothing 1989 estimate provided the background against which bureaucratic battles were waged within the Bush administration over whether to halt U.S. cultivation of Saddam. By then the Treasury Department, the Federal Reserve and the Office of Management and Budget were opposed to continuing Commodity Credit Cooperation credits, which guaranteed repayment to exporters of U.S. wheat to Iraq. A government report dated Oct. 13, 1989 found "indications" that Iraq was bartering some of the grain for arms, that some of the funds were being diverted into arms purchases through the Atlanta office of Italy's Banco Nazionale del Lavoro and that Iraqi officials were requiring exporters to pay exorbitant "consulting fees" to an Iraqi company in Ohio.

Nevertheless, based on the intelligence community estimate, the Bush administration issued its October 1989 call for closer economic and political ties with Iraq and its January 1990 finding in favor of continuing CCC credits to Iraq. It was only in "late spring" of 1990, Gates told the Banking Committee, that the CIA "began providing information" of the huge military buildup that led to the invasion of Kuwait on Aug. 2.

An Earlier Post Mortem

That's the beef, all of it, so far. This picking through the details of a decade-oil alliance of convenience is painfully reminiscent of the post mortem that went on over Harry Truman's concessions to Stalin at Potsdam. Meanwhile Truman was inaugurating the Marshall Plan for European economic recovery, which stopped further European incursions by Soviet tanks in their tracks.

Of the current discussion of Bush and Saddam Hussian, even deputy editorial page editor Stephen S. Rosenfeld of the generally anti-Bush Washington Post was moved to write on Feb. 28:

"It's more than a bit unfair, since the war did produce success suitable, if not to the rhetoric, then to the effort. Kuwait was freed and Saudi Arabia was saved, although neither was democratized. World oil was held steady. A dangerous dictator's early possession of a nuclear bomb was pre-empted. A frazzled but still valuable example of international collaboration against a rogue regime was set."

That's more profound than anything the public will hear from House Banking Committee proceedings-unless its investigators look beyond their present "get Bush" domestic political focus to some of the Reagan administration's colorful "made in Israel" adventures. Unless Representative Gonzalez raises his investigative sights to include the arms shipment aftermath to the Reagan campaign committee's "October Surprise," and the Reagan National Security Council's off-the-books Bible and key-shaped-cake caper with Iran, what Gonzalez produces won't be Texas beef-just jerky.

Richard Curtiss, executive editor of the Washington Report on Middle East Affairs, testified at the December 1990 House Banking Committee hearing on the Gulf crisis.

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