Two major Bay Area corporations allegedly sold technology that helped Iraq beef up its military in the 1980s, according to a German journalist with access to the 12,000-page document on Iraqi weapons that was turned over to the United Nations.

The transactions with Iraq took place more than a decade ago when the political situation in the Middle East was markedly different than it is today.

Hewlett-Packard Corp. sold about $1.7 million worth of computers and testing equipment that the Middle Eastern country used to build missiles and a military infrastructure when it was a U.S. ally against Iran, according to Andreas Zumach, a journalist for Die Tageszeitung, a Berlin newspaper.

In addition, Zumach said, Bechtel, the San Francisco engineering- construction giant, helped Iraq develop conventional weapons.

HP's and Bechtel's Iraqi ties had ended by the time the Gulf War began, and neither firm appears to have broken any laws, said Zumach, who noted European and Chinese firms are also mentioned in the document.

Zumach authored a controversial report that was published last month in his newspaper. The report points out the extent to which corporations in the West, particularly in the United States and Germany, had a hand in helping Saddam Hussein turn Iraq into a regional military power.

In response to a query from The Chronicle, Zumach noted that Bechtel, HP and two major federal research laboratories -- Lawrence Livermore National Laboratory in Livermore and Sandia National Laboratories in Albuquerque and Livermore -- were mentioned in the declaration.

Tensions were high between the United States and Iran after the 1979 Iranian revolution led by the Ayatollah Khomeini. When war broke out between Iran and Iraq, the Reagan and first Bush administrations supported the brutal regime of dictator Hussein, providing military assistance and allowing U.S. corporations to do business with the Middle Eastern country.

Zumach would not say how he obtained a copy of the document that Iraq was compelled to submit recently to the U.N. Security Council as part of the continuing investigation into whether Iraq has weapons of mass destruction. The U.N. weapons inspection team is expected to give the Security Council a major update Monday on what it has found in Iraq.

Bechtel said it had worked with Iraq before the Gulf War, but denied that it helped Hussein's military buildup.

HP declined comment for this story.

Roy Verley, a former HP director of communications, said the tech firm's business dealings with other countries in the 1980s strictly followed prevailing U.S. laws and foreign policy. "The company never wanted to be in any way doing anything in conflict with the national interest," he said.

"Its policy was generally to follow whatever guidelines were promulgated by the U.S. State Department," he said. "If the State Department said certain licenses were required, those licenses were obtained."

Verley said he could not recall any specific HP business deals involving Iraq.

According to Zumach, the Iraqi document said that during the 1980s, HP sold the Iraqis:

-- $25,000 worth of computers and electronic testing calibration and graphics equipment for the Iraqi Atomic Energy Commission.

-- $599,257 worth of frequency synthesizers, electronic testing equipment, radio spectrum analyzers and computers to Saad 16, Iraq's main missile research project.

-- $1,045,500 worth of computers used for making molds, frequency synthesizers and other equipment for security military communications systems.

Zumach said Bechtel's transactions with Iraq involved conventional weapons, but he could not immediately ascertain further details of those transactions.

BECHTEL'S ROLE

Bechtel spokesman Jonathan Marshall said the engineering firm had entered into legitimate commercial and industrial contracts with Iraq, but he denied that it had anything to do with beefing up Iraq's military.

The company signed a contract with Iraq in 1988 to manage the engineering and construction of a petrochemical plant near Baghdad, he said.

Some critics said Iraq may be planning to use the plant to develop chemical weapons.

Marshall said the company abandoned the project after Iraq invaded Kuwait in 1990. He said Hussein's forces interned some Bechtel employees who were later released.

The project, he said, was "legal and sanctioned by the U.S. Department of Commerce."

The Commerce Department usually requires U.S. companies that plan to sell such products as high-performance computers or materials that could be used for developing weapons to secure a license, a spokesman said.

NAMES REMAIN PRIVATE

The names of such firms are kept confidential, he said.

According to the Iraqi document, federal labs also helped train Iraqi nuclear weapons scientists and provided nonfissile material to construct a nuclear bomb, Zumach said.

Bob Alvarez, an investigator at the U.S. Senate in the 1980s and later a senior policy adviser at the U.S. Department of Energy, said it was not unusual for federal agencies to invite international guests to symposiums on such topics as weapons and defense.

In the 1980s, some of these guests included scientists from Iraq, then an important U.S. ally against Iran.

"The United States was looking to weaken Iran in any way they could, and this is why they entered into this relationship with Iraq and Saddam Hussein," said Alvarez, now a scholar at the Institute for Policy Studies in Washington.

Chris Hellman, an analyst with the Center for Defense Information think- tank in Washington, agreed, saying the United States and other Western countries "were more than happy to sell even dual-use technologies to Iraq right up until the 1990 invasion of Kuwait."

"Even if U.S. government officials had a suspicion that dual-use technologies were being used by Iraq for devious purposes to develop weapons for use against Iran, I doubt they would have opposed the sale," Hellman said.

LABS RESPOND

Lynda Seaver, a spokeswoman for the Lawrence Livermore lab, confirmed that there were conferences held that possibly included visitors from Iraq. But these were not classified settings, she said.

"They would discuss information that would be freely available," she said. "There was no partnership or collaboration with Iraqi scientists for whatever."

Mike Janes, a spokesman for Sandia in Livermore, said two major international conferences were held at the laboratory in the 1980s, but none of the participants were from Iraq. "No visits by Iraqis on issues of national security or weapons technology are known to have occurred," he said.

Zumach declined to say how he got the material, which became controversial after the United Nations decided to make only 3,000 pages available to some members of the Security Council.

Critics accused the council of bowing to pressure from the Bush administration, which they said was trying to protect the interests of U.S. corporations and government agencies.

Ewen Buchanan, public information officer of the U.N. Monitoring, Verification and Inspection Commission, said making public the names of companies that dealt with Iraq may discourage the firms from cooperating with the inspection.

For example, companies that sold equipment or technology to Iraq could tell inspectors if Iraq had asked for any modifications to their orders for military purposes.

"It has been useful for us to go to companies to get details of their transactions with Iraq," he said. "If we were to release the names (of these companies), it's like journalists burning sources."

WRITER'S ROLE IN CONTROVERSY

Because he broke the story on U.S. and European corporate involvement in Iraq's weapon programs in the 1980s, Zumach, who has covered the U.N. from Geneva since 1988, and his newspaper have become part of the controversy.

The Financial Times of London called Die Tageszeitung an alternative newspaper known for bashing any government, but said it is a must-read for many politicians and journalists partly because of Zumach's exclusive reports.

Eric Croddy, a senior research associate at the Center for Nonproliferation Studies in Monterey, downplayed the significance of Zumach's report.

"There's nothing that Hewlett-Packard makes that's going to be helpful to a weapons of mass destruction program," he said. "Nothing I'm aware of."

Other critics have suggested that Iraq intentionally mentioned the companies that reportedly did business with Hussein in order to muddy the controversy about its weapons program.

Referring to criticism in Europe of the Bush administration's push to invade Iraq, Croddy questioned the motives of Zumach and his publication. He said the report is "a sensational way of putting a spotlight on the United States because there are those who disapprove of the United States."

On the other hand, Phyllis Bennis, a research fellow at the Institute for Policy Studies in Washington, said Zumach's report offers important lessons on how the United States has coddled repressive regimes that later become international threats.

"The problem is if we had not armed that regime to the teeth, it would not become more than a tin-pot dictator," she said. "What made Iraq more powerful was support from the United States and its allies."

BAY AREA LINKS TO IRAQ Bay Area companies are mentioned in Iraq's weapons declaration.

-- Hewlett-Packard sold $1.7 million worth of computers and electronic testing equipment to the Iraq government in the 1980s.

-- Bechtel sold products related to Iraq's conventional weapons program in the 1980s.

-- Lawrence Livermore National Laboratory and Sandia National Laboratories (Livermore and Albuquerque) helped train Iraqi nuclear weapons scientists in the 1980s. Source: Andreas Zumach, German newspaper reporter

©2003 San Francisco Chronicle

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