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Thursday, August 28

Records show high-tech U.S. goods sold to Iraq despite embargo

By Donna Leinwand, Jim Michaels | USA TODAY

BAGHDAD, Iraq - U.S. investigators examining bank and government records here say they have unearthed evidence that high-tech hardware manufactured by at least 30 U.S. companies was sold to Iraq in violation of United Nations sanctions and U.S. Customs regulations.

Officials are trying to determine whether any of those companies knowingly violated the sanctions and U.S. Customs laws - or unwittingly sold the goods, including computers, laboratory equipment and aircraft parts, to third parties who then dealt with Saddam Hussein's regime. Investigators declined to name the U.S. companies.

The evidence may confirm the United States' long-standing accusation that Saddam violated the U.N. sanctions, which sought to isolate and punish his regime for its invasion of Kuwait in 1990, its persecution of Shiite Muslims and ethnic Kurds and its efforts to obtain weapons of mass destruction.

Now, investigators with access to records and who have had a chance to interview former officials in Saddam's regime are developing a clearer understanding of how Iraq's sanctions-busting operation worked.

They're tracking front companies and middlemen in Europe and the Middle East, and they are reviewing dozens of foreign bank accounts. Saddam's aides allegedly used these devices and methods to circumvent sanctions and purchase arms and high-tech goods.

Iraq would often pay triple what the goods normally cost, investigators say the records show. ``They had to pay through the nose,'' said U.S. Customs agent Stewart Burke, a member of the investigation team here. ``If you are asking someone to violate the embargo, you have to expect someone to pay extra for it.''

Customs agents say they have uncovered correspondence from companies in Germany and South Korea that referred to the United States as ``our common enemy'' in apparent efforts to ingratiate themselves with Iraq.

They also declined to name those foreign companies.

U.S. prosecutors have no jurisdiction over most foreign companies that sold goods to Iraq during the 1990s and earlier this decade, when sanctions were in place. It also might be difficult to prosecute U.S. companies for any violations on sales subject to U.S. Customs export restrictions.

Many of the goods could have changed hands several times after first being sold. And many of the companies will likely say they thought their products would end up in Jordan or Syria - countries not subject to sanctions or many Customs restrictions.

Prosecutors would have to prove the companies knew the products would end up in Iraq.

As for the money Iraq used to pay for goods bought from elsewhere, officials from the nation's central bank have located more than a dozen Iraqi government accounts at banks in Lebanon. On the eve of the war, they contained $400 million. Another $150 million was deposited in Jordanian banks.