The Bush Mob & the Arming of Saddam Hussein


By Dean Henderson

March 21, 2013

1997 - 3-2 - Costa Rica - San Jose - Just short of paradise(Excerpted from Chapter 14: Saddam’s Banker in Atlanta: Big Oil & Their Bankers…)

Bush League Criminals

In 1984 Vice-President George Bush pressured Export-Import Bank (EIB) President William Draper into providing Saddam’s government with $1 billion in US taxpayer-backed loans for a pipeline project in Iraq.  Bush received a secret memo from Assistant Secretary of State for the Middle East Richard Murphy, whose Murphy Associates later cleaned up in Kuwait, which read, “Liberalize export controls, help Iraq construct pipeline to Jordanian port of Aqaba, arrange Ex-Im financing”. [580]

The pipeline was built by Bechtel, where Reagan Secretary of State and CFR Director George Pratt Schultz was director.  In 1987 Bush met with Iraq’s US Ambassador Nizar Hamdoon to promise the Iraqis military technology.  Bush intervened upon EIB President John Bohn, persuading him to provide $200 million more to Saddam.  Bohn was hesitant because Iraq had a well established record of defaulting on its loans.  As of 1986 it owed over $100 billion to Western governments.  Britain, France and Japan had suspended all loans to Iraq.

Bush didn’t care if Iraq defaulted, leaving US taxpayers in the lurch, so long as his oil and defense buddies made a buck on the Iraq deals.  From 1984-89 $5 billion went down the drain in Commodity Credit Corporation and EIB loans to Iraq.  Welfare-case corporations receiving EIB financing through Banca Nacionale de Lavoro (BNL) included Snap-On, Bristol Meyers, Dow Chemical, John Deere, Warner Lambert, Singer and Cyanamid International.  In 1989, two years after Saddam gassed the Kurds, Bush signed NSD-26 committing the US to “improve and expand our relationship with Iraq”.  Iraq joined the short-lived US-orchestrated Arab Cooperation Council with Egypt, North Yemen and Jordan.

The Iraqis got US guns and grain, while the Four Horsemen got cheap Iraqi oil.  In 1988 the US bought only 80,000 barrels of crude a day from Iraq.  By the time Saddam attacked Kuwait, that figure had jumped to 1 million barrels/day on, according to a State Department memo, “favorable terms”.  Just prior to Saddam’s move into Kuwait, the US ratcheted up oil imports from Kuwait to 1.1 million barrels/day.  Exxon was the biggest buyer.  In the months before the Gulf War, the US Department of Energy purchased 3.4 million barrels/day from Kuwait.  In 1991 EIB loans began flooding into Kuwait to finance the Fortune 500 rebuilding party.

In January 1990 Bush approved preferential trade status for the Iraqi regime, shortly after Congress voted to ban all loans to Iraq.  That same month Harken Energy was awarded the biggest offshore oil concession ever off the coast of Bahrain.  Harken was controlled by George W. Bush, who had received $50,000 in seed money, possibly from Saudi Sheik bin Laden, to launch Harken predecessor Arbusto Energy with Halliburton crook and Bush Jr. Vice President Dick Cheney. [581]  Attorney Allen Quasha swung the Harken deal for Bush Jr., just as his Nugan Bank insider father William had, in 1961, helped George Bush Sr. gain rights to drill the first oil well in Kuwait with drug-infested Zapata Offshore Oil. [582]  Bush Jr. sold his 66% stake in Harken at 200% profit just before “Poppy” sprang Operation Desert Storm.

According to Pittsburgh Attorney Marion Gasior, many corporations providing arms to Iraq had ties to the blue blood Brown Brothers Harriman, where Grandpa Prescott Bush had worked.  Once the Gulf War began, President Bush signed an executive order, exempting eleven top cabinet members from conflicts of interest generated by their stock holdings in firms that profited from the war.  Among them was Secretary of State James Baker, who held stock in Exxon, Texaco, Amoco and other oil companies who rang up record profits during the Gulf War.  Baker also held stock in Chemical Bank, Salomon Smith Barney, and defense contractor United Technologies.

Also exempted were Kissinger Associates Eagleburger and Scowcroft, who cleaned up in similar fashion.  Scowcroft owned a $1 million stock portfolio in 40 corporations including 11 major defense contractors and several oil giants.  His most significant holdings were Mobil, Westinghouse, Monsanto, Lockheed, ITT, Halliburton, Bank of America, Lehman Corporation, General Motors, General Electric and Royal Dutch/Shell. [583]

Weapons of Mass Destruction Anyone?

BNL was the main conduit through which General Motors had vehicle sales to Iraq financed.  A good chunk of Wall Street was using BNL in similar fashion.  More disturbing was the fact that BNL was covertly supplying Saddam Hussein with a wide array of high-tech military know-how which furthered his pursuit of weapons of mass destruction.  Saddam received sensitive military software, electron-beam welders for uranium enrichment, mainframe defense computers, rare uranium enrichment lubricants and a glass fiber processor to make missile casings for Scud missiles.  Brett Coulson, who sat on Bush’s NSC from 1989-1991, said later, “We knew Iraq was progressing on nuclear, biological and chemical weapons programs.”[584]

Bechtel and Lummus Crest built PC-1 and PC-2 plants in Iraq which manufacture ethylene oxide and ethylene glycol, key components in making thyodiglycol, out of which Saddam derived the mustard gas he used against the Kurds in 1987.  US soldiers who fought in Operation Desert Storm testified that barrels of chemical agents found in Iraqi bunkers were marked “Made in America”.  In 1988-1989 the Reagan/Bush Administrations sent binary VX nerve gas to Iraq in violation of UN Security Council Resolution 598.  Following the 2003 invasion of Iraq, US troops found VX canisters at the Alcaca weapons depot.  The bills of lading showed that Carlyle Group had facilitated the shipments. [585]

European Customs officials were keeping their eyes on Euromac, which through its Italian and British offices acted as Iraq’s weapons procurement agent on that continent.  Euromac once tried to get a nuclear circuit for a bomb from CSI Technologies, a California company.  CSI informed the CIA and got no response.  Bryan Seibert, head of the Department of Energy’s Office of Classification and Technology Policy, got a similar response from Energy’s intelligence unit, when he told them of suspicious Iraqi deals.  Euromac was run by Dr. Safa Haji al-Habobi, who headed the Iraqi Ministry of Industrial & Military Production and oversaw Iraq’s NASSR weapons complex.  Al-Habobi also ran Matrix-Churchill in the UK and Babil International of Paris, two of the main BNL Iraqi arms procurement fronts.

Often BNL-financed weapons were smuggled into Iraq through East European BNL contacts who were compensated with the same type of CCC loans paid to Mossad agent Gerald Bull and Cargill Continental. [586]  The CIA knew of at least five BNL-financed deals from 1985-1990 bound for Iraq’s Defense Industry, but Bush Commerce Secretary and Texas Commerce Bank insider Robert Mosbacher told his people to approve the $1.5 billion worth of contracts. [587]  Rockwell International, Hewlett-Packard and Tektronix were among those who benefited from Mosbacher’s empathy for Saddam Hussein.  On one occasion a BNL deal with Iraq’s Central Bank- there were over 3,000 telex lines between the two- involved nuclear triggers.

CIA told Secretary of State James Baker about Iraq’s nuclear capabilities in September 1989.  A month later Baker assured Iraq’s Foreign Minister that export controls toward his country would not be tightened, while approving a $1 billion food aid package to Baghdad.  In July 1989 an Energy Department Task Force tracking intelligence reports on Iraq was suddenly disbanded.  The CIA not only knew that US exporters of sensitive material to Iraq were Iraqi front companies; it ran many of those fronts.  According to the Senate Intelligence Committee, both RD&D and Rexon Technology were CIA fronts to arm Iraq.  Dale Toler, head of RD&D, had worked at NSA.

William Muscarella, President of XYZ Options, said the CIA was fully aware that his firm was training Iraqi technicians in Topeka, Kansas to run a secret arms factory to be built at Iraq’s al-Atheer complex.  In 1987 Dr. Richard Fuisz was invited to tour a Terex plant at Motherwell, Scotland.  Terex had been spun off by US/Iraqi Business Forum member and BNL client General Motors a year earlier.  Fuisz testified to Congress that he saw all-terrain trucks whose hauling bins were replaced with sheets of metal with pre-drilled holes.  The plant manager told him the trucks would become “missile launchers for the Iraqi military”.  They were later mounted with the Scud missiles fired at US forces and Israel during the Gulf War. [588]

Canira Technical Corporation of Ireland was an important Iraqi weapons procurement front, as was Kintex of Bulgaria.  Kintex, like the Milan-based Stibam Corporation that swung the Iranian hostage release deal, is a front company for Turkish Gray Wolves fascists, who use this Sophia conglomerate to smuggle Golden Crescent heroin into Europe via Bulgaria.  When the Shah of Iran was deposed, the Gray Wolves found a new supplier in the Afghan mujahadeen and their Pakistani handlers.  Now they were using their Kintex front to arm Saddam with a wink and a nod from Langley.

Bert SerVass, an Indianapolis friend of the Quayle family and leading supporter of both Pat Robertson and Robert Schuler Ministries, got BNL financing for his Servass Inc. to build a brass shell recycling plant in Iraq.  SerVass got help from Vice-President Dan Quayle, whose family controls Eli Lilly, where Dan’s boss George Bush had been CEO. Quayle’s appointment as Vice-President was presumably a payback for the pharmaceutical giant’s funding of Bush’s political career.

Servass was Indianapolis City Council President, owned the Saturday Evening Post, served with the OSS in China and was a vocal supporter of the South African apartheid regime.  A Post writer once told of how SerVass wanted him to write an article, at the request of Richard Helms, extolling the virtues of CIA.  The writer said when SerVass called Helms, “he always got through right away.”  Indianapolis is also home to CIA assassin John Hull.

BNL collateralized a loan made by Tulsa-based American Bank & Trust Company (ABTC) to Iraq’s State Machinery Company.  ABTC Chairman Fred Henke headed Utica National Bank & Trust, which loaned millions to Farhad Azima’s Global International Airways, which was central to Reagan’s effort to arm the Ayatollah.  ABTC’s prior Chairman Victor Thompson was forced to step down due to improprieties while heading Reagan’s Synthetic Fuels Corporation.  Thompson’s son Robert formed a consulting firm with Prescott Bush in 1983. He served in Reagan and Bush Sr. Administrations as a top aide.  Both were under investigation by Congress for deals with aptly-named Arizona businessman and S& L looter James Fail. [589]

The Germans got into the act too.  Krupp-Widia and Hertel sold Iraq tungsten carbide cutting tools to make artillery shells, which were manufactured by Kennametal of Latrobe, Pennsylvania.  Ironically, when an Iraqi Scud missile hit a US military barracks in Dhahran, Saudi Arabia during the Gulf War, most of the twenty-eight US soldiers killed were from Latrobe.  Kennametal had dealings with Matrix Churchill and Chilean arms dealer Carlos Cardoen in supplying Iraq’s NASSR munitions complex.  Other German corporations who helped build up Iraq’s military included Daimler-Benz, Messerschmitt, Gildemaster, Ferrostaal, Thyssen, SMS Hasenclever, Karl Kolb and Siemens.  Karl Kolb subsidiary Pilot Plant built the Samarra chemical weapons plant which made the mustard gas used against the Kurds.  Siemens provided Saddam with sensitive nuclear technology. [590]

The Condor II Project was a joint military program between Argentina, Egypt and Iraq which was financed by BNL, with contracts going to Mack Truck, Hewlett Packard, Halliburton’s Dresser Industries, Caterpillar, Ingersoll Rand and Mannesmann Demag.  BNL financed French arms sales to Iran in 1984 for Luchaire, France’s largest private arms manufacturer.  In 1989 BNL was one of the two largest lenders to Mexico, where President Carlos Salinas and his brother Raul were busy laundering drug money through James Baker’s Texas Commerce Bank.  BNL became a NATO conduit for P-2 Freemason activity and financed US Sidewinder missile sales to Italy in 1986.  Convicted double-agent Aldrich Ames had an account at BNL-Rome.

When the BNL scandal broke 68 Commerce Department documents were altered to read “commercial” instead of “military”.  Undersecretary of Commerce Dennis Kloskie, who was ordered to alter the documents, later said his actions were approved by an inter-agency panel.  NSA Norman Bailey admitted, “…the authorities knew all about it and approved it.  They were using this channel for the financing of certain activities.”  Iraq purchased $46.7 billion worth of arms during the 1980’s, the largest accumulation of modern weaponry by a Third World country ever.  The buildup was financed by BNL, with the tacit approval of the US government. When Iraq defaulted on those BNL loans, the US taxpayer became de facto paymaster for Saddam Hussein in his drive towards developing weapons of mass destruction.

[580] “Bush Lobbied to Aid Saddam for Years”. Los Angeles Times. 3-3-92

[581] The Outlaw Bank: A Wild Ride into the Heart of BCCI. Jonathan Beaty and S.C. Gwynne. Random House. New York. 1993. p.226

[582] “Arming Saddam Hussein”. Patrick Barnard. Commonweal. 6-5-92

[583] “Kissinger Associates, Scowcroft, Eagleburger, Stoga, Iraq and BNL”. Chair Henry Gonzalez. H2694. Senate House Banking Committee. 4-28-92

[584] “US Contributed Significantly to Saddam’s Bomb Arsenal”. AP. Northwest Arkansas Morning News. 11-1-92. p.1

[585] “Paranote”. Paranoia. #41. Spring 2006. p.64 (

[586] “Arming Saddam Hussein”. Patrick Barnard. Commonweal. 6-5-92 p.5

[587] “CIA Knew about Defense Sales to Iraq”. Rocky Mountain News. 10-30-92

[588] Shell Game: A True Story of Banking, Spies, Lies, Politics and the Arming of Saddam Hussein. Peter Mantius. St. Martin’s Press. New York. 1995. p.80

[589] American Banker/Bond Buyer. 4-27-92

[590] “My Advice to the Privileged Orders”. Chairman Henry Gonzalez (D-TX) H206. Senate House Banking Committee. 2-3-92

Dean Henderson is the author of four books: Big Oil & Their Bankers in the Persian Gulf: Four Horsemen, Eight Families & Their Global Intelligence, Narcotics & Terror NetworkThe Grateful Unrich: Revolution in 50 CountriesDas Kartell der Federal Reserve &Stickin’ it to the Matrix. You can subscribe free to his weekly Left Hook column @

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