DETAILS ON IRAQ'S PROCUREMENT NETWORK
Henry B. Gonzalez, (TX-20)
(House of Representatives - August 10, 1992)


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The SPEAKER pro tempore. Under a previous order of the House, the gentleman from Texas [Mr. Gonzalez] is recognized for 60 minutes.

Mr. GONZALEZ. Mr. Speaker, for many years I have been concerned that the U.S. financial system is vulnerable to abuse. I have said that for some 27 years. Though much attention has rightly been paid to the savings and loan scandal, foreign bank supervision has been almost nonexistent. Therefore, since becoming chairman I set course on exploring the inadequacies of supervision and regulation of foreign banks. As a result, the committee has had considerable success in tightening up the laws governing foreign banking operations in the United States. My main concern has been, and continues to be that foreign banks, which command well over three-quarters of a trillion dollars in assets in the United States, can easily abuse the U.S. financial system for nefarious purposes.

Exhibit A is the BNL scandal. Poor bank supervision allowed BNL's small Atlanta branch to loan over $4 billion to Iraq between 1986 and 1990 without reporting the loans to bank regulators or the bank's headquarters in Rome. What is worse, over $2 billion of the BNL loans went to Iraq's Ministry of Industry and Military Industrialization otherwise known as MIMI. MIMI used this illicit supply of cash to fund its secret military technology procurement network and to purchase technology for Iraqi weapons projects including the Condor II ballistic missile, Gerald Bull's super gun and Iraq's clandestine nuclear, biological, and chemical weapons programs.

The story of the Banca Nazionale del Lavoro affair is complicated in its details, but very simple in its outlines. Caught up in the costs of a protracted and ghastly war with Iran, Iraq needed food and military equipment. After the war, Iraq was determined to build its own military capability--both because Saddam Hussein wanted to remain the biggest military power in the Arab world, and because he wanted to build weapons of mass destruction, which he could not buy.

BNL was one of the key elements of Saddam Hussein's efforts to buy food and military know-how. this bank provided the most important financial link. But to accomplish his aims, Saddam Hussein had to operate in secret--and so he set up an elaborate clandestine military procurement network that operated in this country and throughout Europe.

Our Government knew about the network, and as I have shown before, decided to tolerate its activity. The policy was designed to see if Saddam Hussein could be turned into a reliable ally, according to the President, Secretary of State, and other officialdom of this Government, and therefore to let him borrow with U.S. taxpayer assistance, and also let him operate his secret military procurement apparatus.

Today, among other things, I will show that our Government has yet to do anything to shut down Iraqi front companies operating in France, Germany, Switzerland, and the United States. And I will show that a subsidiary of one of these Iraqi companies was--and may very well be today--a contractor supplying components for 155 millimeter artillery shells to the United States military.

Before I go on, I just wanted to make a couple of comments regarding the Attorney General's decision not to appoint an independent counsel. I feel that Attorney General William Barr is attempting to lock any door that might lead to a full exposition of the Bush administration's involvement in the buildup of Iraq prior to the invasion of Kuwait. First, the Attorney General denounced and obstructed congressional investigations, and now he blocks inquiries by a special counsel.

Mr. Barr is playing a dangerous political game in a desperate effort to protect the Bush administration. On May 15, the Attorney General informed me in writing that the agencies and departments of the executive branch would henceforth refuse to provide classified documents requested by the committee in its investigation of the Banca Nazionale del Lavoro and its involvement in financing the Iraqi operations. Using the Barr edict, numerous agencies have now fallen silent and are completely stonewalling the committee.

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Clearly, Attorney General Barr has become the point man for the administration in blocking the disclosures of the Iraqi affair. The Attorney General is the giant boulder holding the administration's stonewall together against further revelations about the damaging and mysterious policies in the Persian Gulf.

The American people--who have sent troops and billions of dollars into the Persian Gulf--have every right to know the facts about the policies and the aid and comfort provided Saddam Hussein by the administration. Attorney General Barr is misusing his office and damaging the integrity of the Justice Department in blocking both congressional and independent investigations. He may well regard himself as the President's lawyer, but his oath of office requires that he also protect the public's interest--and in this case the interests of the President and the public do not coincide. When such a conflict exists, it is the clear duty of the Attorney General to choose the public's interest above political considerations just as some of his more distinguished predecessors did.

IRAQ'S AMBITIOUS MILITARY INDUSTRIALIZATION PLAN

As I showed in my July 21 and 27 reports, from the very beginning the Bush administration had plentiful information on Iraq's ambitious military industrialization program.

Intelligence reports in 1988, 1989, and 1990 contain vast details on Iraq's postwar military industrialization plans and schemes to build weapons of mass destruction. The essence of Iraq's ambitions is captured in a July 1990 CIA report which clearly outlined an ambitious expansion of its defense industries as a prime Iraqi goal. The report showed that Saddam Hussein wanted greater security and the prestige he would gain from having his own ability to produce arms.

The organization assigned primary responsibility for Iraq's ambitious military industrialization plan was the Ministry of Industry and Military Industrialization, commonly referred to as MIMI.

ORGANIZATION OF THE MILITARY INDUSTRIALIZATION EFFORT

Under MIMI, Iraq established a complex defense industrial plan that encompassed not only military related production facilities but also government enterprises primarily devoted to civilian production. MIMI can be thought of as a dual structure holding company divided between civilian and defense components. Roughly a holding company. MIMI controlled about 40 civilian agencies that were assigned responsibility for building commercial ventures such as the Badush Dam, petrochemical complex two (PC-2), and fertilizer factories and truck assembly factories.

MIMI often used civilian activity as a front for procuring equipment used to produce weapons of mass destruction. A July 1990 intelligence report entitled, `Iraq's Growing Arsenal: Programs and Facilities' shows that many Iraqi entities passed the materials from foreign suppliers directly to military projects.

For example, Iraq used the Badush Dam as a front for purchasing equipment for the Condor II ballistic missile program. And PC-2 was used as a front to purchase components for Gerald Bull's super gun. Lastly, petrochemical complex three (PC-3) was the code name for Iraq's clandestine nuclear weapons program.

The military side of MIMI, which was comprised of roughly 25 organizations, had responsibility for producing products ranging from military supplies to complete weapons systems. Large Iraqi industrial complexes often contained both civilian and military production facilities. MIMI used the civilian and military nature of these mixed-use factories to mask the ultimate end-user of technology shipped to these complexes.

The intelligence community had abundant information showing that Iraq used many ostensibly civilian factories as fronts to procure equipment for military use. A July 1990 CIA report entitled `Beating Plowshares into Swords' discusses how MIMI used 25-30 Iraqi establishments primarily to produce military supplies, spares or weapons. The Agency knew that civilian entities worked alongside military organizations to procure equipment and technology needed for the weapons program.

The CIA had information showing the location and many of the activities of these entities. A July 1990 CIA report entitled `Iraq's Growing Arsenal: Programs and Facilities' contains a section called `Defense Industrial Facilities.' Among others the report identified: Nassr State Establishment and Mechanical Industries [NASSR]; Badr General Establishment--Badr; Saddam State Establishment--Saddam; Al Kindi Research Complex--formerly Saad 16; Salah Al Din State Establishment; Al QaQaa State Establishment--Al Qaqaa; and, Hutteen State Establishment--Hutteen or Huttin.

The CIA had information showing that these MIMI controlled entities were involved in Iraq's clandestine nuclear, chemical, and biological weapons programs and missile programs. U.N. inspectors have subsequently verified the military nature of these entities.

Despite knowledge of the nature of these entities, the Bush administration approved dozens of export licenses that allowed United States and foreign firms to ship sophisticated U.S. dual-use equipment to MIMI-controlled weapons factories.

Iraq's ambitious military industrialization plan was personified by MIMI's increasing prominence which is illustrated by a July 1990 CIA report on the rapidly growing MIMI and its bureaucratic and industrial components after the cease-fire with Iran clearly showed the prime importance Saddam Hussein placed on his arms effort. In other words, the administration knew what Saddam Hussein was doing, and how he was doing it, and why he was doing it.

HUSSEIN KAMIL IN CHARGE OF PROCUREMENT NETWORKS

Saddam Hussein entrusted the achievement of Iraq's ambitious military industrialization program to his son-in-law, Hussein Kamil. Hussein Kamil was placed in charge of MIMI in 1988. The CIA believed that Kamil was probably the second most powerful man in Iraq.

Well, that is news, is it? Every single other state entity, intelligence or otherwise, called Hussein Kamil the second most powerful man in Iraq. What is secret about that? Big intelligence from our so-called vaunted CIA. There are dozens of other public sources that we obtained this same assessment of Hussein Kamil, all over the Middle East, Europe, England, France, Germany, and as a matter of fact I will detail later on that, as I explained in the earlier statements when the Attorney General, the first Attorney General, Thornburgh, blocked and kept the Federal Reserve Board, of all agencies, from providing information we requested and in fact had subpoenaed by the committee. Well, we then got some of that information, if not most of it, from our allies; the Italian Senate investigating committee. And it is the same way with intelligence agencies. My Lord, I have even indirectly and without attribution, of course, several countries' intelligence groups that have provided, even if indirectly, information that we are being told cannot be reported to us, all the way from Britain's G-16 to Israel's Mossad to Korean's Central Intelligence Agency, which, incidentally, the KCIA, the Korean CIA, not only invaded and penetrated our great Congress in the 1970's, early 1970's and late 1960's, but literally, literally suborned it with money from CIA and funneled through some people as the newly announced savior, Sun Myung Moon, who is still in the United States. Maybe his Moonies are inactive, but he now owns the newspaper in Washington known as the Washington Times, and it is still funded and he is still funded through the Korean CIA.

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So, my colleagues, what is the news here? Who is trying to kid whom? It is ridiculous.

But the thing that gets me is that entities like the CIA; who do they think they are? The Federal Reserve Board? And even the Federal Reserve Board, they are creatures of the Congress. We in the Congress created them. Since when have they become the Frankenstein monsters that would tell the Congress what it ought to know, and should not know, and what will be allowed to be known?

Thank the Lord though for these other more enlightened countries throughout the world, including the German intelligence. As a matter of fact, later on I will make allusion to the first document that I am placing in the Record today. It is from German intelligence, the German intelligence agency.

Since the CIA is almost paranoiac, certainly sensitive, our good brethren in the German community have been forthcoming, and that will be the first document that I will place in the Record today.

Saddam Hussein entrusted the achievements, as I said, to his son-in-law for this great purpose. He was placed in charge in 1988, and there is no question that he immediately embarked on a very, very imaginative and very successful program.

In May 1989, the determined Kamil publicly stated that Iraq was `implementing a defense industrial program to cover all its armed forces needs for weapons and equipment by 1991.'

Hussein Kamil's roots can be traced back to the Secret Security Organization or SSO. During the 1980's, Kamil wrestled control of the SSO which had responsibility for protecting Saddam Hussein and for keeping track of other Iraq intelligence organizations. Kamil retained control of the SSO after he moved to MIMI. Not surprisingly, the convert techniques Kamil learned at the SSO would become valuable tools in his quest to obtain sophisticated Western technology despite growing obstacles.

As it emerged form its almost decade-long war with Iraq, the cornerstone of Iraq's growing influence in Middle East affairs was its military prowess. With its million uniformed troops, Iraq emerged from the Iran-Iraq war with the fourth largest standing army in the world. Saddam Hussein was proud of the fact that Iraq could produce, or was learning how to produce, many of the wares needed to supply this vast army. In fact, Iraq held an annual military fair, attended by United States Government officials, where it proudly displayed for the West its indiginously produced conventional military wares.

Despite the size of his army, Saddam Hussein concluded that Iraq had to develop weapons of mass destruction in order to maintain its position as the Middle east's military power and to counter its huge neighbor Iran as well as the sophisticated arms of Israel. To achieve that goal, Iraq had to rely on foreign technology and know-how.

Multinational efforts such as the Nuclear Nonproliferation Treaty, the missile technology control regime, and restrictions on the sale of many chemical weapons precursors helped to slow Iraqi efforts to develop weapons of mass destruction. But Iraq was determined not be to be denied sophisticated western technology. It adjusted to what it perceived as mettlesome interference by the United States and its allies by setting up secret procurement networks.

As early as June 1989, the CIA reported on Iraqi procurements networks. This report discusses how intricate the Iraqi operation had become. American intelligence knew that nations like Iraq go to great lengths in order to acquire necessary technologies, specific components, and manufacturing capability--even purchasing entire companies and setting up others as fronts. The report warned that secret networks would become even more complex and would make it difficult to halt or control the spread of key military technologies.

IRAQI PROCUREMENT NETWORKS

U.N. inspections after the gulf war proved how accurate the forecast was--Iraq had massive covert programs to develop weapons of mass destruction. The big surprise was not that Iraq had the secret programs, but the depth and progress Iraq had made in developing weapons such as nuclear warheads. One of the prime reasons Iraq had progressed so rapidly in building nuclear weapons was precisely its procurement networks.

But as I have said, our Government knew about it. A late summer 1989 CIA report states:

Baghdad uses aggressive covert techniques to acquire
technology. The nuclear network--controlled by MIMI--uses Iraqi public sector enterprises, front companies, foreign agents and even civilian organizations to procure technology.

NASSR ONE OF MAIN BENEFICIARIES OF PROCUREMENT NETWORKS

One of the main beneficiaries of Iraq's procurement networks was the Nassr State Enterprise for Mechanical Industries [NASSR] with headquarters in Baghdad, and a sprawling industrial complex southwest of Baghdad. NASSR contained dozens of state-of-the-art major manufacturing facilities such as steel and aluminum production facilities, steel and aluminum casting facilities, numerous machine shops, huge presses and high-temperature furnaces and sophisticated welding equipment used to work with very high strength steel and aluminum, and a research and development center.

Various NASSR factories were used to produce components and to produce conventional weapons such as cannon barrels and aerial bombs. NASSR was also a primary location for the production of components for Gerald Bull's 1,000-millimeter super gun often referred to as the Babylon Project.

NASSR also provided critical assistance to Iraq's nuclear and missile programs. NASSR was probably the most important facility for production of modified Scud missiles and also played a key role in the development of other Iraqi antimissile and ballistic missile programs including the Condor II.

The heavily guarded NASSR complex also produced components for Iraq's nuclear centrifuge program and was the site of a centrifuge manufacturing plant. NASSR also contributed to Iraq's chemical and biological weapons programs. Much of the equipment at the NASSR complex was obtained through Iraqi procurement fronts operating in Europe and the United States. NASSR was a prime target for allied bombing during the gulf war--so ironically, we destroyed at great expense the complex our Government had watched and helped to build.

ORGANIZATION OF PROCUREMENT ACTIVITIES

To say the least, MIMI's ambitious military industrialization program required detailed planning and coordination among literally hundreds of different Iraqi entitles. As with all other aspects of Iraqi society, this task was highly centralized. Based on documents acquired from several Iraqi front companies in the Al-Arabi Trading Co. network, and interviews with persons working with these front companies, I will now provide an example describing how Iraq's procurement apparatus supported Iraq's weapons programs.

MILITARY INDUSTRIALIZATION BOARD

MIMI used a modern programming-planning process to coordinate the complex task of meeting the foreign technology needs of the various military industrial facilities. The key organization within MIMI responsible for meeting the foreign equipment needs of the various Iraqi establishments was the Military Industrialization Board [MIB]. This Board or Commission had a division of research and development and a division of planning, continuity, and technology.

The MIB gathered equipment orders from various Iraqi factories and compiled a list of the needed equipment into a lengthy document or shopping list. For example a typical list would contain equipment and raw materials orders from several Iraqi weapons factories.

The list was then forwarded via diplomatic pouch, to Ali Mutalib Ali the commercial attache at the Iraqi Embassy in Germany. German and United States intelligence agencies identify Mr. Ali as a key operative in Iraq's procurement networks as well as an Iraqi intelligence agent.

Upon receipt of the equipment list, Mr. Ali forwarded the list of the United Kingdom-based front company called the Technology Development Group [TDG]. TDG then would send a copy of the equipment list of Matrix-Churchill Corp. in Cleveland, OH. Employees at TDG and Matrix-Churchill were then responsible for finding the needed equipment, gathering technical specifications, getting price quotes, and sending that information back to the Iraqi end user.

If needed, TDG and Matrix-Churchill would arrange meetings between representatives of the Iraqi end user and the potential supplier. Sometimes the front companies like TDG and Matrix-Churchill would purchase the technology directly from the supplier and ship it to Iraq. On other occasions the Iraqi end user would purchase the technology directly from the supplier, and sometimes financing from one of Iraq's banks here or in Europe was arranged to pay for the equipment.

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IRAQI EMBASSIES PLAY KEY ROLE

Iraqi Embassies around the globe played a key role in the procurement network.

Just like in the case of the Korean Central Intelligence Agency and old Tongsun Park and the scandals of that day, they used their Embassies. In fact, they did pretty much the same thing that Iraq has done. It was Mr. Moon sent here and, working in cooperation with the Korean CIA, bringing some beautiful Korean girls to dance and wanting to establish a beachhead in the United States. They reached former President Eisenhower in Pennsylvania and took the girls to have a private dance with him. That gave him the prestige, which is what they were seeking as in the case with the use of all of these over 85 principal American corporations, once President Reagan in 1983 removed Iraq from the list of terrorist nations. So that if needed, TDG and Matrix-Churchill would arrange meetings with these representatives, and sometimes they would just directly go ahead and purchase.

The Iraqi Embassies were throughout the whole world the bases or the key base of operation. Iraq's diplomatic pouch, like all others, is inspection-free, and was often used to distribute documents such as blueprints and contracts. This safe system provided Iraq with the ability to avoid electronic interception that could occur if telex or facsimile was used. Embassies in Germany, the United Kingdom, and the United States were often used as the site of negotiations between foreign firms and Iraqi officials attempting to purchase sensitive foreign technology. Again, secrecy was the main goal.

Embassy staff often participated directly in obtaining technology for Iraq's weapons programs. For example, documents obtained from Matrix-Churchill show that the Iraqi Embassy in Washington purchased special high-strength steel for a ballistic missile program from a Youngstown, OH, steel producer.

Another example is the Iraqi Embassy in London. Money used to pay for U.S. origin capacitors with nuclear and missile applications was traced to that Embassy. Iraqi Embassy staff also helped network personnel to obtain passports, visas, and work permits that allowed the network personnel to travel freely throughout the West.

Iraqi intelligence agents working for the network frequently visited the United States. Safa Al Habobi is a case in point. The CIA believed that Al Habobi was a member of Hussein Kamil's SSO. They knew that Al Habobi was a key operative in Iraq's military technology procurement network. Even so, Al Habobi was allowed to enter the United States. In fact, in 1988 and 1989 he traveled to the United States on extended visits--he even brought his family of all places to Disney Land.

Amazingly, law enforcement officials were not permitted to monitor Al Habobi's activities when he came to the United States because Iraq was not an enemy and the law prohibited monitoring in such cases,

unlike the British in London, who did put a stop to it. Persons such as Safa Al Habobi never listed on immigration reviews that the Iraqi military was their employer, yet when they were in Iraq they wore uniforms and worked for military establishments under MIMI's control.

IRAQI AIRWAYS

Iraq's commercial airline, Iraqi Airways, was a key component of Iraq's technology procurement network. Iraqi Air locations around the world, including the United States, were often staffed with intelligence agents that played an active role in transferring Western technology to Baghdad. Germany was a particularly busy transport point.

Goods from around Europe were shipped to Frankfurt, Germany, and then flown nonstop to Iraq. Several illegal shipments of Western technology were stopped as they were about to leave Germany on Iraqi Air. The United Kingdom customs expelled an employee of Iraqi Air for his role in attempting to smuggle nuclear triggers from the United States through the United Kingdom to Iraq.

MANY PROJECTS ASSIGNED TO NETWORK FIRMS

Network firms like TDG and Matrix-Churchill were assigned responsibility for identifying and procuring equipment, manufacturing processes, and whatever else was needed for Iraqi military industrial facilities such as NASSR.

For example, Matrix-Churchill Corp. in Cleveland, OH, was assigned over 200 projects. These ranged in variety from obtaining glass fiber technology and erecting a glass fiber factory at NASSR, to procuring books on rocket propulsion and gyroscopes and sending them to a rocket scientist employed by NASSR. An Iraqi working at Matrix-Churchill was asked to obtain Albert Einstein's research thesis and even a photo of the famous scientist. Notes from the procurement file included the telephone number of the physics department at MIT.

One of the London-based firms in the network, Technology Management Group Ltd. [TMG], provided the Iraqi Ministry of Housing and Construction with a quote for the stainless steel swords contained in the famous Arches of Victory monument erected at the entrance to Baghdad. The arches often frame the background of Iraqi military parades. In fact, we even have in our notes the cost of that stainless steel.

LARGE LONG-DISTANCE PHONE BILLS

The network companies were in constant contact with Iraqi end users. For example, the records of Matrix-Churchill contain thousands of telexes and facsimile messages directed at, or received from Iraqi entities. In addition, several of the Iraqis working at Matrix-Churchill had frequent phone contact with Iraq. To preserve security, when sensitive topics were discussed at Matrix-Churchill, the Iraqis would often speak in Arabic in front of the American employees.

What do you know about that? I do not think it goes that far for these English-only exponents.

In addition, telexes and facsimiles often were written in Arabic. Saalim Naman, the Iraqi head of procurement at Matrix-Churchill often used the privacy of his home to make phone calls to Iraq.

Employees of Iraqi weapons factories were frequently permitted to travel to the United States to evaluate technology, equipment, and receive training at United States factories even though our Government knew what they were up to.

For example, a firm in Topeka, IN, called CarbiTech, trained dozens of Iraqis on how to manufacture carbide-tipped inserts for machine tools. CarbiTech was owned by XYZ Options of Tuscaloosa, AL, which had a $15 million BNL-financed contract to build a carbide factory in Iraq. A recent L.A. Times article on XYZ Options stated that well before the Iraqi invasion of Kuwait, the CIA visited the CarbiTech factory to determine what type of training the Iraqis were receiving.

In 1989 XYZ Options offered to sell CarbiTech to Safa Al Habobi so that the Iraqis could reduce their cost of training their employees.

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The carbide factory was recently destroyed by U.N. inspectors who found it at the secret Al Atheer nuclear weapons plant.

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AL-ARABI NETWORK

I will now provide a brief overview of the Al-Arabi network. In later floor statements I will provide more detail on how the Al-Arabi network operated including its U.S. operations.

XYZ Options, like hundreds of other U.S. companies was first contacted by Matrix-Churchill Corp. located in Cleveland, OH. Matrix-Churchill was the United States base for the state-controlled Al-Arabi Trading Co. network, one of Iraq's largest and most prominent procurement networks. While Al-Arabi was set up as a private company in Baghdad, in reality it was the mechanism MIMI used to acquire other front companies to procure Western technology.

Al-Arabi was controlled by a subordinate of MIMI called the Technical Corps for Special Projects [TECO or Techcorp]. Techcorp was in charge of Iraq's highest priority weapons projects like the Condor II ballistic missile, the Big Gun and Iraq's clandestine nuclear weapons program.

Al-Arabi acted as a holding company for over a dozen front companies in Europe and the United States. These firms appear to have been the main supplier of Western equipment and know-how for NASSR's weapons production activities. The Al-Arabi network also sought out and obtained equipment and know-how for other Iraqi military industrial complexes that I mentioned above including Al-QaQaa, Badr, Hutteen, Saddam, and Salah al Din.

A June 1989 CIA report identified the Al-Arabi network as a major European military procurement network for Iraq's defense industries and discussed how the network connected Iraq to suppliers of precision machine tools, uranium gas centrifuges, and all kinds of other technologies for weapons development projects that included chemical, missile, biological, and nuclear programs.

It appears that the day-to-day operations of the Al-Arabi network were under the control of one of Hussein Kamil's former Secret Security Organization [SSO] cronies, Dr. Safa Al Habobi. Al Habobi was also a director general of the NASSR weapons complex. Dr. Safa, as he is warmly referred to by his colleagues, was indicted for his role in the BNL scandal. Over a billion dollars in BNL funds can be traced directly to NASSR projects and the Al-Arabi procurement network.

MUCH OF AL-ARABI NETWORK IN EUROPE

Al-Arabi owned front companies in Italy, France, Switzerland, Germany, the United Kingdom and the United States. The Italian firm was called European Manufacturing Center or Euromac. Euromac was staffed by two brothers called Hussein and Kassim Abbas. Euromac also owned a shipping company in Italy as well as having an affiliate in England called Euromac. In 1990, the United Kingdom-based Euromac was indicted for attempting to smuggle capacitors from the United States that could be used in nuclear bombs and missiles.

Before Matrix-Churchill was established as the primary U.S. arm of the Al-Arabi network, the Abbas brothers had frequent contact with U.S. firms. For example, the Abbas brothers sent a firm in New Jersey dozens of inquiries for equipment and raw materials.

In France is another arm of the network, a firm called Babil International, located in Paris. The committee recently received the most up-to-date corporate papers on Babil and the listed owner of the firm is none other than Safa Al Habobi. To this day the French Government allows Babil International to operate, but then the United States Government has not yet placed Babil on the list of Iraqi owned front companies, so United States firms can still conduct business with Babil.

My offer to my buddies in the CIA is, if you do not have any information that you need in order to place these companies on this list, please see us. Just be nice enough to talk to us and humble yourself enough to ask. We will give you that information so you can list them.

A 1990 German intelligence report identifies Pierre Drogoul as a consultant to Babil. Oh, Pierre Drogoul.

Well, now, this is the father of Chris Drogoul, who the committee just subpoenaed last Thursday and is indicted and awaiting sentencing in Atlanta, and a big, big Atlanta BNL official. Here is his father in Paris, France, the notorious former manager of BNL's Atlanta branch.

The German arm of the network is called TDG/SEG in Krefeld, Germany. The United States Government had not placed this firm on its list of Iraqi-owned front companies either. The committee found a business card in the records of Matrix-Churchill that contained the TDG/SEG logo, address, and phone number.

The Swiss arm of the network is a firm called Schmiedemeccanica or SMB. The committee has documents showing that the Iraqis bought 18 percent of SMB in June 1990 and another 12 percent 6 months later, giving the Iraqis a 30-percent stake in SMB. And, surprise, surprise--the United States has yet to list SMB as an Iraqi front company.

SMB is one of Switzerland's finest forging companies and a good deal of SMB's work is for the armaments industry. For example, SMB helped to set up a 155mm artillery shell factory in Iraq and it has done similar work for the Swiss Government. But SMB also was involved in Iraq's illicit nuclear weapons program.

United Nation inspectors have identified SMB as having provided key technology for Iraq's secret nuclear program. SMB provided forging for the manufacture of uranium enrichment centrifuges.

In 1989, Safa Al Habobi tried to buy a United Kingdom firm called Forging Developments International along with its United States affiliate of the same name located in Cleveland, OH. Just months after Forging Developments turned down Safa Al Habobi's offer, SMB tried to buy Forging Developments International.

When that deal fell through, SMB set up a firm in Selma, NC, called SMB North America, Inc. which is still in operation today. The committee has been informed that one of SMB North America's first contracts was to supply the U.S. military with base plates for 155mm artillery shells.

Let me summarize the SMB debacle. Iraq owns at least 30 percent of SMB, which in turn set up an affiliate in North Carolina which supplies the United States military with components for 155mm artillery shells. In other words, Iraq is helping to supply the United States military with artillery shell components. So here we have an Iraqi front that supplied artillery components we used against Iraq, and they used against us. And, incredibly enough, SMB is not listed as Iraqi owned. Maybe this should not surprise anybody, since the fronts in France and Germany still haven't been fingered yet.

I repeat my offer to my friends at the CIA or whatever other intelligence community is around. Americans have lapsed.

Eternal vigilance is still the price of liberty. We have gone along, and Congress, a long way in threatening these basic liberties.

It is said that power tends to corrupt, and absolute power corrupts absolutely. And this can be said of all of the secret agencies from the CIA, and others. The Congress has not been wanting, after it created and after it departed from its charter, when it was founded by Congress in the 1947 so-called security or, rather, Defense Security Act, and it has strict limitations in that original act.

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I am sure the Members of Congress then, were they to be here today, would be absolutely unbelieving that Congresses would have let this agency just run amok and go around carrying out foreign policy to the extent that it has endangered the good name and the virtue of our people and country, helping to assassinate foreign leaders that it decides are a risk to the national security.

I do not discharge Congress from our responsibility. It has done this same thing with others, like the Federal Reserve Board. The Federal Reserve Board is answerable to nobody, President or the Congress, yet we created it in 1913. All I have been saying all the time I have been in Congress is, it is about time the Congress lived up its constitutional commitments, which it cannot delegate, contrary to all the opinions that have been advanced.

Here, is a good example. Absolute power corrupts absolutely. All power tends to corrupt, even our meager power, so eternal vigilance is still the price we must pay for the preservation of our democracy and our basic liberties, which I say are at far greater risk than the average American wants to realize.

A majority of the firms in the Al-Arabi network, which was established in 1987, were located in the United Kingdom. Arcane and outmoded laws made the United Kingdom a perfect nesting place for Iraq's procurement activities. The fact that the United States and United Kingdom have agreed not to spy on each other provided an added incentive for Iraq to establish its Western procurement base in the United Kingdom.

I say that decision not to spy on each other, and I do not know the date, but it must have been some time after the war, because all during the war we were spied upon. In fact, we had people knocked off in New York that

were considered dangerous to the United Kingdom.

Iraq used United Kingdom holding companies to branch out and gain control of other firms. The primary fronts were London-based holding companies called Technology Development Group [TDG] and Technology Engineering Group [TEG]. Through these holding companies Iraq controlled over a dozen United Kingdom firms and several United States firms. The United Kingdom firms included TMG Engineering, Matrix-Churchill Ltd., AWA Engineering, Admincheck Ltd., Investacast Precision Casting, Atlas Equipment Co., Atlas Air-Conditioning Co., and others.

Besides SMB North America, the U.S. arms of the network include Matrix-Churchill Corp. in Cleveland, OH; Bay Industries in Santa Monica, CA; METECH in Torrance, CA; and Tigris Trading Co., in Pittsburgh, PA. The United States Government has blocked the assets of Matrix-Churchill and Bay Industries because they have been identified as Iraqi front companies. METECH, which was not identified as an Iraqi front, is now out of business.

The Tigris Trading Co. has a bank account at Pittsburgh National Bank, and it leased an office in a Pittsburgh high-rise office building. Interviews with Americans that worked at Matrix-Churchill revealed that Saalim Naman, the head of procurement for Matrix-Churchill, frequently visited Pittsburgh. The committee has uncovered additional Tigris Trading Co. addresses in Baghdad, London, and Cleveland. This suggests that Tigris Trading Co. was the beginning of a new Iraqi procurement network.

In future statements I will provide additional information on several other United States firms with close ties to the network that may have been Iraqi fronts. In addition, I will show that Iraq considered purchasing a half dozen or so United States firms. The committee is still investigating to see if Iraq gained control of those firms which are located in Pennsylvania, Connecticut, Ohio, Texas, Alabama, California, and North Carolina.

The Bush administration has devoted woefully inadequate resources to the task of identifying Iraqi front companies.

Here again, I repeat to my friends and the CIA this offer. We will give you the information. You should be able to raid them after that.

The Office of Foreign Assets Control [OFAC] in the Treasury Department is responsible for identifying Iraqi and Kuwaiti assets. OFAC must do the same for Cuba, Libya, and Yugoslavia because of various economic sanctions in place against those nations.

OFAC has not identified several of the firms I mentioned above because limited funds enable them to assign only a handful of investigators to the task of identifying Iraqi assets. I cannot understand why the President did not place a high priority on finding Iraqi front companies when he knew of their extensive activities in this country. Of course time and resources spent on the Rostow Gang, our old buddies, the lawyers group which screened executive branch documents, shows that the President did place a high priority on hindering and blocking congressional investigations on several committee fronts, not just ours.

Intelligence reports as far back as June 1989 reveal that Matrix-Churchill Corp. was part of Iraq's military technology procurement network, yet the Bush administration allowed it to operate despite knowing that the network was responsible for procuring technology for Iraq's covert nuclear, biological, and chemical weapons programs as well as various long-range missile programs.

Customs Service testimony provides still more insight into our Government's knowledge of Iraq's procurement activities. In 1991 the Customs Service testified before the Ways and Means Committee:

[Page: H7876]

In the two years prior to Desert Storm the Customs Service detected a marked increase in the activity levels of Iraq's procurement networks. These increased levels of activity were particularly noticeable in the areas of missile technology, chemical-biological warfare and fuse technology.

The following is taken from a question and answer period with the Customs Service:

Question. How many cases did the Customs Service investigate prior to the Iraqi invasion involving the illegal exportation of goods to Iraq?

Customs. Approximately 21 investigations involving Iraq were opened prior to the invasion of Kuwait.

Question. Did the Customs Service ever raise any concerns to Commerce or State Departments regarding the increased activities of the Iraqi procurement network prior to the August invasion of Kuwait?

Customs. The Customs Service on a monthly basis furnishes the Commerce and State Departments with a list of open investigations. Additionally, the increased levels of activity were particularly noticeable in the area of missile, nuclear technology, chemical and biological warfare and fuse technology were discussed with various interagency working groups. Customs, Commerce and State all participated in the groups.

The United States, British, and Israeli intelligence communities closely monitored many Iraqi entities that had numerous, almost daily contacts with BNL in Atlanta and Matrix-Churchill in Cleveland. The CIA had legal authority to intercept these communications abroad as well as in the United States because BNL and Matrix-Churchill were foreign owned entities. There is no doubt that the administration was aware that Iraq had established procurement fronts in the United States.

BAKER AND EAGLEBURGER APPROVE MCC BAGHDAD BRANCH

The case of the Baghdad office of Matrix-Churchill symbolizes the Bush administration's indifference toward Iraq's procurement activities in the United States.

Shortly after taking control of Matrix-Churchill Corp. in late 1988, the Iraqis began efforts to set up a Matrix-Churchill office in Baghdad. At the time, Iraqi law required United States corporations to go through a certification process before they could establish a branch in Iraq.

Here is the point I have been making all along, ad nauseam, that we are the only country that has no kind of screening or certification processes. It is unbelievable, and particularly on the banking front. We are mightily vulnerable. The near $1 trillion drug-narcotic-money laundering scheme is all bent. How can we get behind it until we have the regulatory defenses that the national interest demands for the safety and soundness of our banking and financial institutions.

[TIME: 1820]

We are far from that. What is it going to take? My colleagues, for how long, for how long must we be exposed on a daily basis when no one who is charged with the responsibility of safeguarding these interests on the regulatory front are able to tell us?

In Baghdad at the time Iraqi law required that United States firms be certified.

Unwittingly, in 1989 both James Baker and Lawrence Eagleburge helped Matrix-Churchill establish its Baghdad branch. Pretty good.

One step in the process of establishing a Baghdad branch was a requirement that the State Department authenticate documents indicating that the firm in question was a valid U.S. chartered firm. On March 14, 1989, Secretary of State James Baker's signature was placed on State Department documents to confirm that Matrix-Churchill was a valid Ohio company. On May 10, 1989, Acting Secretary of State Lawrence Eagleburger's signature was placed on similar documents. We have those here for the Record so my colleagues can see them, with a big seal and everything.

Thus, even though the State Department had intelligence information showing that Matrix-Churchill was an Iraqi front company, it helped Matrix-Churchill establish a Baghdad branch. Was this deliberate or was it carelessness? Maybe it was a little of both.

The Bush administration had extensive knowledge of Iraq's military technology procurement network, including the fact that the network operated a United States-based affiliate called Matrix-Churchill Corp. The administration also knew that many of the Iraqi employees assigned to the procurement network were intelligence operatives, yet they allowed them to visit and work in the United States without being monitored.

I cannot imagine why the Bush administration could tolerate this knowing that Iraq was using the network to gather technology for weapons of mass destruction. In part deliberately, in part through sheer neglect, the Bush administration did little or nothing to stop Saddam Hussein's ambitious efforts.

The documents previously referred to are as follows:

Matrix-Churchill,
Cleveland, OH, May 18, 1988.

Al-Arabi Trading Co. Ltd.,
Alwiyan, Baghdad, Iraq.

[Page: H7877]

Gentlemen: We have pleasure in confirming cooperation of our two companies for the market areas of Iraq, Jordan and the Arab-Gulf states.

It is confirmed that Matrix Churchill Corporation agrees to pay a commission or finders fee on any contract signed through a project sourced from Al-Arabi Trading Co. Ltd., or direct from Iraq where Matrix Churchill Corporation receives renumeration from that contract according to the agreed commission or finders fee.

The commission or finders fee will vary according to the project, services and contract value. It will amount to 2.5% to 10%. The amounts of commissions or finders fees for both Al-Arabi Trading Co. Ltd. and Matrix Churchill Corporation will be agreed prior to the presentation of Matrix Churchill quotation.

Payment of these commissions or finders fees will be on a pro-rata basis to the contractual payment terms and after the renumeration for Matrix Churchill Corporation has been received.

Yours truly,

Gordon Cooper,
Vice President.

--

Al-Arabi Trading Co. Ltd.,
Alwiyah, Baghdad, August 29, 1989.
Att: Mr. Sam Naman, Matrix Churchill Corp.,
Cleveland, Ohio, U.S.A.

Dear Mr. Naman: As discussed and as per our letter of August, 1989, please find below new bank detail of payment of Invoice No.: 1/BRASS/MCC:

Al-Arabi Trading Co. Ltd.

Account No.: 100100671.

Rafidian Bank, 7/10 Leadenhall Street, London EC3V 1NL.

We await confirmation by return.

Yours faithfully,

Farouk Taha,
(On behalf of Al-Arabi Trading Co. Ltd.)

--

Al-Arabi Trading Co. Ltd.,
Alwiyah, Baghdad, June 26, 1989.
Subject: Brass Plant Project Ref. U043.
Att: Mr. Gordon Cooper, Matrix Churchill Corp.,
Solon, Ohio U.S.A.

Dear Mr. Cooper: Reference your letter of July 11, 1988 and the agreement, and letter dated June 14, 1989. Please find duly executed and signed, one copy of `Agreement U043' returned to you together with amendment dated June 14, 1989. We are retaining the other copies in our files.

Yours truly,

Farouk Taha,
(For Al-Arabi Trading Co. Ltd.)

--

Matrix-Churchill,
Cleveland, OH, June 14, 1989.
Subject: Brass Plant Project Ref. U043.

Al-Arabi Trading Co. Ltd.,
Alwiyah, Baghdad, Iraq.

Gentlemen: Further to our letter of July 11, 1988 and subsequent agreement dated June 14, 1989, please find attached a copy of `Agreement ref. U043' and the schedule dated June 7, 1989, agreed and accepted by MCC with SerVass Incorporated.

With reference to `item 2' of the agreement, negotiations between our two companies has resulted in our amendment the payment schedule between MCC and Al-Arabi from the agreed 10 days after receipt to:

Payment #1--End October 1989 or earlier.

Payment #2--End December 1989 or earler.

Payment #3--End March 1990 or earlier.

Payment #4--End June 1990 or earlier.

Payment #5--To remain as agreement.

Payment #6--To remain as agreement.

Payment #7--To remain as agreement.

This letter is written in two copies and shall constitute an amendment of the agreement per item 4 of the agreement. Please sign both copies, and retain one copy for your files and return the other to MCC.

Matrix Churchill Corporation, By: Gordon Cooper--CEO.

Al-Arabi Trading Co. Ltd., By: Farouk Taha.

--

--

`Agreement Ref. U043'

This Agreement dated June 14, 1989 is made Between Matrix-Churchill Corp. (`MCC') whose address is 5903 Harper Road, Cleveland, 44139 and Al-Arabi Trading Co. Ltd (`Al-Arabi') whose address is P.O. Box 2337, Alwiyah, Baghdad, Iraq, regarding MCC's contract with SerVaas Incorporated (`Customer') concerning the Brass Plant ref. U043 project (`Project').

1. The contract with Customer requires MCC or Al-Arabi to perform services for Customer some of which services will be performed by Al-Arabi and Al-Arabi agrees to perform services to Customer under the contract.

2. In exchange for its services, MCC and Al-Arabi agree Al-Arabi will receive 80% of the payments MCC receives from the Customer for the Project. The amount due from MCC to Al-Arabi is payable within ten (10) days of MCC's receipt of payment from the Customer, unless otherwise agreed.

3. MCC's payment schedule dated June 7, 1989 from the Customer is attached and incorporated by reference as if fully set forth in this Agreement. Al-Arabi agrees to abide by the terms and conditions of MCC's payments schedule from the Customer and those terms and conditions, where applicable, shall govern this Agreement.

4. This Agreement shall constitute the entire agreement between MCC and Al-Arabi and its provisions shall not be modified, amended or waived except in writing, executed by MCC and Al-Arabi. MCC and the Al-Arabi may, subject to the provisions of this paragraph, from time to time, enter into written supplemental agreements for the purpose of adding any provisions to this Agreement.

5. This Agreement shall be construed in accordance with the laws of the United States of America.

6. This Agreement shall inure to the benefit of, and shall be binding upon, the respective affiliates or associated companies, nominees, agents, successors and assigns of MCC and Al-Arabi.

In witness whereof, the parties have executed this Agreement the day and year first above written.

Matrix-Churchill Corporation, By: Gordon Cooper--CEO.

Al-Arabi Trading Co. Ltd., By: Farouk Taha.

SerVaas, Incorporated,
Indianapolis, June 7, 1989.

Mr. Sam Naman, Matrix-Churchill Corporation,
Solon, OH.

Dear Sam: This will confirm our conservation of June 7, regarding the payment schedule:

PAYMENT NO., DATE, AMOUNT, AND EXPLANATION

No. 1, ----, $70,000, At time of signing of agreement on the sale of the contract with Izane estimated to be in ten days to two weeks.

No. 2, July 31, 1989, 130,000.

No. 3, Oct. 31, 1989, 100,000.

No. 4, Dec. 31, 1989, 200,000.

No. 5, Mar. 31, 1990, 300,000.

No. 6, ----, 200,000, Completion of Certificate of Commissioning and Taking Over Certificate for complete contract.

No. 7, ----, 1,030,100, Final Acceptance Certificate.

Total: $2,030,100.

These payments shall be made to you by Izane Engineering, Ltd. (London Bank) to your London office.

Best Regards,

Clarence C. Ormsby,
Vice President.

--

Al-Arabi Trading Co. Ltd.,
Alwiyah, Baghdad, July 25, 1988.
Att: Mr. Gordon Cooper, Matrix Churchill Corp.,
Solon, OH, U.S.A.

SUBJECT: BRASS PLANT PROJECT REF. U043

Dear Mr. Cooper: We thank you for your commitment letter of July 11, 1988. At the time the contract is signed and an agreement between yourselves and Bridgeport Brass/Servass is completed we should formalize an agreement between our two, companies reference assignment of proceeds between us. We agree that our fee will constitute an 80% portion of the total fee's received by M.C.C. from Bridgeport Brass/Servass.

Yours Truly,
Farouk Taha.

--

--

June 15, 1990.
Re: Third and Final Report on SMB.
To: Dr. Safa
From: R.K. Khoshaba

1. VISIT

1.1. On 7th June I travelled to Lugano and on 8th June at 9 o'clock in the morning I had a meeting with Mr. Nessi, the lawyer, and Mr. Romano of SMB: as arranged.

1.2. In the afternoon on 8th June we visited Banca Del Sampione to complete the transfer of shares and signing of the loan agreement.

1.3. All the original documents which were legalised at the Swiss Council in Zapeb, Yugoslavia were handed over to the lawyer.

[Page: H7878]

2. FARTRADE HOLDING S.A.

2.1. The shareholding in SMB is in the name of Fartrade Holding S.A., a Swiss Company incorporated in the District of Fribourg. This company was incorporated on 14-12-89 with share capital of S.F. 200,000: .

2.2. The lawyer has obtained from the previous owners declarations to the effect that the company has not traded and that it is free from any liabilities except the capital.

2.3. Formation expenses and stamp duty are S.F. 10,000: .

2.4. The company has only one director who is now the lawyer Mr. Nessi.

2.5. The Company's shares are divided into units of S.F. 100 each. Issued shares are 2000 divided into two certificates:

No. 1 for 1 share.

No. 2 for 1999 shares.

Both certificates are held with the lawyer.

2.6. The company has applied to increase the shares by 800,000 and change the unit from S.F. 200 to S.F. 1000.

2.7. The company is incorporated in Fribourg and this apparently should give no capital gains tax when the shares are sold. I was informed that each district has different rules regarding the gains.

2.8. I have obtained a declaration from the lawyer that he holds the shares in trust for Dr. Safa and I have prepared a similar declaration from you that you hold the shares in trust for Durand Properties Ltd.

3. BEARER SHARES

3.1. As explained above, the shares in Fartrade Holding S.A. are to the bearer.

3.2. Due to recent restrictions in Switzerland and in order to ensure that lawyers are dealing with genuine people. Mr. Nessi insisted that the original certificates stay in his possession. In theory, he argued, bearer shares if given to us could be passed on to other people for whom he may not wish to contact. Being the sole director, he would be fully responsible for all the results of the company. This point was checked by myself with Mr. Zurmuller of the bank and with Mr. Romano. For the same reasons, lawyers are now insisting on dealing on behalf of individuals and not offshore companies.

3.3. The declaration of trust signed by Mr. Nessi acquires the importance of the shares. In a way, the declaration is a better document in the sense that it has the names of the beneficial owner shown in writing but if it were lost, it would not be critical as a bearer share certificate.

4. CMD SHARES

4.1. As phase 1, we have acquired 1000 shares out of issued capital shares of 5500, i.e. 13.18% at a price of S.F. $3,400 each.

4.2. The share are financed by:

Ourselves

2,400,000

Bank

1,000,000

Total

3,049,000

4.3. Within 6 months we will acquire another 650 shares at the same price, to be financed again by:

Ourselves

1,565,850

Bank

650,000

Total

2,215,850

This would give us a total hold of 1650 shares i.e. 30%.

4.4. Bank loan is at 10% interest repayable at S.F. 500,000 every 6 months, first repayment starting 30-6-1991.

4.5. The Bank will hold the shares as security but it has given Mr. Nessi confirmation that the shares have been transferred to the name of Fartrade Holding S.A.

4.6. Duty and commission on transfer of shares totalling about S.F. 23,000 has been avoided by making an `Agreement to sell and purchases' back dated to December, 1989. This was recommended by a tax adviser. However, I checked independently with the bank that it was in order. This was confirmed and proved by issuing a document to say that the shares are now registered in Fartrade Holding's name.

5. OTHER MATTERS

5.1. Finance for our share of S.F. 2,409,000 and the anticipated expenses were provided for as follows:

Al-Arabi from UBAF: Sterling ╦472,403

1,135,029

Al-Arabi from UBAB: Swiss Francs

120,655

Total

1,255,684

Al-Arabi from Rafidian: Sterling ╦400,000

965,016

Al-Arabi via TDG: Sterling ╦130,000

310,500

Total

1,255,684

Sterling ╦400,000

965,016

Sterling ╦130,000

310,500

2,522,200

5.2. Expenses were expected to be:

Lawyers fees

10,000

Stamp duty on increased capital 3%

24,000

Acquisition of company expenses including stamp duty

10,000

Notary charges Re-Increase in capital

4,000

Various other taxes

5,000

Total

53,000

5.3. After payment of 5.1 and 5.2 above, there should be about S.F. 60,000 left in the account which is the figure required to be made available to pay the loan interest and annual administrative fees.

5.4. Documents to be signed--

5.4.1. Declaration of trust to increase capital by S.F. Properties Ltd.

5.4.2. Fiduciary * * * to buy and sell dated December 1989.

5.5. Offshore Company.

I discussed with Mr. Nessi the possibility of his acting for us to form companies in Luxembourg and Liechtenstein. He confirmed that he would be able to do so. I have asked him to form one in each of these two countries with the minimum capital possible.

5.6. Bank Del Sampione.

I discussed with Mr. Zurmuller the possibility of opening accounts with the bank in Locarno. The bank is reluctant to do so for offshore companies unless they have all the bank ground of such companies. However, they now know you and would be pleased to open accounts in your name. I have obtained a number of forms for this purpose.

6. DOCUMENTS ATTACHED (ALL COPIES)

6.1. Certificate of Incorporation of Fartrade Holding S.A.

6.2. Balance Sheet and declarations.

6.3. Share Certificates 200 with the lawyer.

6.4. Declaration of Trust by the lawyer to Dr. Safa.

6.5. Declaration of Trust from Dr. Safa to Durand Properties.

6.6. Confirmation by the lawyer that SMB shares of 1000 are held by him for Fartrade Holding.

6.7. Confirmation by the Bank's that they are holding the shares of SMB in Fartrade's name as security for their loan.

6.8. Bank facility letter.

6.9. Fiduciary Contracts.

6.10. Mandate Agreement.

6.11. Loan Agreement for S.F. 2,300,000 Fartrade Holding from Durand.

6.12. Bank opening forms for Fartrade Holding.

6.13. Letter for Romano of SMB giving Mr. Nessi. * * * reference on the lawyer.

SUMMARY

I visited Switzerland on 9th June and completed the acquisition of phase I 18.18 percent of the equity in SMB.

7.2. The holding is via a Swiss Company, named Fartrade Holding S.A. incorporated in Fribourg.

7.3. Costing is as follows:


----------------------------------------------------------
             Phase I (18.18%) Phase II (11.82%) Total 30% 
----------------------------------------------------------
Our funds           2,409,000         1,565,850 3,974,850 
Bank lending        1,000,000           650,000 1,650,000 
Total               3,409,000         2,215,850 5,624,850 
----------------------------------------------------------

7.4. Shares in Fartrade Holding S.A. are via bearer shares kept by the lawyer, Mr. Nessi who is the sole director. However, a declaration of trust is held by us stating that the shares are for our benefit.

7.5. Recent changes in Switzerland means that the lawyer should only act for Dr. Safa and insists that he holds the shares in his office.

7.6. Fartrade has at present share capital of S.F. 200,000 which is being increased to S.F. 1,000,000

7.7. Arrangements are made through the lawyer to establish for us a company in Luxembourg and another in Liechtenstein.

7.8. There are 3 documents to be signed by you:

* * * * *

--

--

United States of America No. 89/3648-2

[UNITED STATES OF AMERICA NO. 89/3648-2]

Department of State

To all to whom these presents shall come, Greeting: I certify That the document hereunto annexed is under the Seal of the Secretary of State of Ohio, and that such Seal is entitled to * * * and credit.

In testimony whereof, I, James A. Baker III, Secretary of State, have hereunto caused the seal of the Department of State to be affixed and my name subscribed by the Authentication Officer of the said Department, at the city of Washington, in the District of Columbia, this fourteenth day of March 1989.

James A. Baker III, Secretary of State.

By Annie R. Maddux, Authentication Officer, Department of State.

--

Matrix-Churchill Corp.,
Cleveland, OH, February 24, 1989.
To Whom it may concern:

I hereby certify that the information contained within the attached document is true and correct.

Gordon Cooper,
Chief Executive Officer.

Sworn to before me and subscribed in my presence by said Gordon Cooper on February 24, AD 1989.
------ ------.

Sworn to before me and subscribed in my presence this 28th day of February 1989.
------ ------.

--

UNITED STATES OF AMERICA, STATE OF OHIO, OFFICE OF THE SECRETARY OF STATE.

I, Sherrod Brown, Secretary of State, do hereby certify that I am the duly elected, qualified and acting Secretary of State of the State of Ohio, and I further certify that Gerald E. Fuerst whose signature and official seal are affixed to the attestation hereto attached, was at the date hereof, the duly elected, commissioned and qualified clerk of the court of common pleas of Cuyahoga County, Ohio, and that he is the proper official to make said attestation, which is in due form; and that his official acts are entitled to full faith and credit.

In testimony whereof, I have hereunto subscribed my name and affixed the official Seal of the Secretary of State of Ohio, at Columbus, Ohio, this 2nd day of March 1989.

Sherrod Brown,
Secretary of State.

--

--

[Page: H7879]

United States of America No. 89/6535

[UNITED STATES OF AMERICA NO. 89/6535]

Department of State

To all to whom these presents shall come, Greeting: I Certify That the document hereunto annexed is under the Seal of the Secretary of State of Ohio, and that such Seal is entitled to and credit.

In testimony whereof, I, Lawrence S. Eagleburger, Acting Secretary of State, have hereunto caused the seal of the Department of State to be affixed and my name subscribed by the Authentication Officer of the said Department, at the city of Washington, in the District of Columbia, this tenth day of May, 1989.

Lawrence S. Eagleburger, Acting Secretary of State.

By Annie R. Maddup, Authentication Officer, Department of State.

--

UNITED STATES OF AMERICA, STATE OF OHIO, OFFICE OF THE SECRETARY OF STATE.

I, Sherrod Brown, Secretary of State, do hereby certify that I am the duly elected, qualified and acting Secretary of State of the State of Ohio, and I further certify that Gerald E. Fuerst whose signature and official seal are affixed to the attestation hereto attached, was at the date hereof, the duly elected, commissioned and qualified clerk of the court of common pleas of Cuyahoga County, Ohio, and that he is the proper official to make said attestation, which is in due form; and that his official acts are entitled to full faith and credit.

In testimony whereof, I have hereunto subscribed my name and affixed the official Seal of the Secretary of State of Ohio, at Columbus, Ohio, this 3rd day of May 1989.

Sherrod Brown,
Secretary of State.

--

Reciprocity Certificate

The undersigned, being the duly elected Vice President of Matrix Churchill Corporation, an Ohio, U.S.A. corporation, does hereby certify as follows:

We confirm that the reciprocity conditions for registration of similar branches of Iraqi companies is valid according to the laws of this country and Iraqi persons are allowed to manage these branches.

In Witness Whereof, the undersigned has subscribed his name hereunto as of this 28th day of April, 1989.
GORDON COOPER,

Vice President,
Matrix Churchill Corp.

I, the undersigned, hereby certify that the above English text is a true and accurate translation of the Arabic text.
Sam Naman.

AUTHENTICATION OF SIGNATURES BY NOTARY


State of Ohio
County of Cuyahoga, ss:

On this 28th day of April, 1989, before me personally came Gordon Cooper, to me know, who being by me duly sworn, did depose and say that he is the Vice President of Matrix Churchill Corporation, the corporation described above and which executed the above instrument; and before me personally came Sam Naman, who being duly sworn, did depose and say that he is able to fluently read the Arabic language and translate such language into English; and that each of Mr. Cooper and Mr. Naman signed his name as set forth above.

David Fleshler,
Notary Public.

--

--

FORGING DEVELOPMENTS

[International] Inc.,
Cleveland, OH, September 21, 1989.
Re FDI Shares.

Dr. Gianni Martinelli
Schmiedemeccanica, S.A.,
Switzerland.

Dear Gianni: I do hope you have recovered from your flu bout. Thank you and Romano for your time on Monday. I am sure it was tiring for you. I thought I would write and confirm my basic understanding of our discussions and offer some suggestions as to some of the, as yet, unresolved items as follows:

SMB will pay me 150,000 U.S. dollars for a 30% share of Forging Developments Corporation and FDI limited. New shares will be issued from each company equivalent to 30% of the total shares issued. My shareholding will remain the same. A nominal price will be established for purchase of the shares.

I will provide you with an invoice for engineering services for the 150,000 U.S. dollars.

You will contract FDI Ltd. for engineering services for a minimum fee of 36,000 pounds sterling per year for a period of two years for consulting work to be defined later at a discounted rate from the current fee structure. The current fee structure in the U.K. is:

Manager--350 pounds sterling/day, i.e., 280.

Project Engineer--210 pounds sterling/day, i.e., 188.

Designer--175 pounds sterling/day, i.e., 140.

Please note these rates apply for local office work. Rates for overseas assignments are increased to reflect local conditions, length of stay and extra compensation paid to the employee. Expenses are also extra.

Purchase of further shares--you requested the option of buying up to 20% more shares of FDI at the agreed price of 5,000 U.S. dollars per percent.

Comment: I would like to consider this question together with the new company, Medform.

I am not sure of your motive to start a new company in the U.S. Perhaps you want to own 60%, perhaps you believe that the purpose of this company should be kept separate from FDI. As I understand it, the purpose of the company will be to market and manufacture hot shears and provide a training school for the use of Catia and perhaps others as they arise. Perhaps the training is not compatible with hot shearing however the marketing of them has to be considered separately.

As Eumuco, Lasco and many others have found, marketing in the USA is the most difficult and competitive in the world. Credibility is everything together with track record. A permanent presence is definitely necessary and so the formation of a company in the USA is vital.

However, it will be one to two years before we are likely to be able to sell a machine. It would therefore be unnecessary to establish a manufacturing facility until the first machines are in and operating. Prior to that we have to decide if the USA is the correct base for such a manufacturing venture. In other words, do I/we really want to be in manufacturing, particularly in the US?

I believe that there are sufficient questions in my mind to wonder why all these opportunities cannot be incorportated within an expanded FDI Inc. organization and if the percent ownership is the reason for you wanting to make it separate. If so, I am very willing to discuss a compromise.

Either way, I assume the success of an organization will depend to a large degree on me. I should therefore either be the majority shareholder or be compensated for the sale of shares when I lose that majority at a rate commensurate with the value of the company.

I suggest therefore that another 19 percent can be purchased during a three-year period at a cost of $5,000 per percent plus 10 percent for each year, i.e., second year, $5,500, third year, $6,050. During this period the remaining 51 percent can be acquired by negotiation. Thereafter the balance of my shares can be purchased at a rate equal to the valuation of the company based on X times earnings. If I want to sell, I will offer them to SMB. If SMB does not want to buy, I am free to sell them to the highest bidder. In the event of my premature death all my shares will be purchased by SMB and funded by a life insurance policy.

The policy payments for this policy are not deductible for the company. The proceeds of the policy to the company are not taxable as revenue however if the money is used to purchase my shares from my wife, she is liable for capital gains tax.

I have enclosed a copy of our old contract for your information.

Buyback--if I want to buy the shares back or you decide you want to sell, I should be allowed to repurchase the shares at a rate equal to $1,000 per percent in the first year, $2,500 per percent in the second and $5,000 per percent in the third. Thereafter by negotiation.

Territories--while we should identify specific markets, I believe the most important part of this topic is to share and maintain our information to avoid competition. In addition to this I would suggest we offer each others services, albeit not directly, in areas where the other is to date, not established.

Gianni, I am sure there are other points and for my part, I intend to bring them up as they occur to me. I hope you will do the same.

My next trip to Europe is planned for the week commencing October 22. On October 26 is the annual BFIA banquet at the National Exhibition Center. You are welcome to be our guest if you have not already been invited officially or by somebody else. Perhaps during this visit we can conclude our agreement by resolving the outstanding issues. Romano is, of course, also welcome.

Kind regards,

Ian R. Williamson,
President.

--

--

Schmiedemeccanica S.A.,
Switzerland, October 17, 1989.
To: Ian R. Williamson.
Company: Forging Developments, Inc.,
Location: Cleveland, USA.
From: G. Martinelli.

Dear Ian, I recovered well from my flu and hope you are also in best health.

I was absent until yesterday. Therefore I do apologize for my delay, in sending you my reply.

I thank you for your letter of September 21, 1989, the content of which came to me as an unexpected surprise.

From the previous talks and correspondence you surely have seen that I did not have the easiest task in persuading the shareholders of SMB to buy 30% of FDI for US dollars 150,000.

I could only overcome the problem by overstressing the impact that SMB ENGINEERING would have in sharing some efforts with FDI. Furthermore the fact that FDI could buy 40% of METFOR USA was a decisive point.

This was stated very clearly in my Fax of August 31, 1989 and was not put into any question or discussion during your visit in * * * of September 11, 1989. Therefore, all what you write on page 2 of your letter is very strange to us.

Personally I do not agree with most of your statements. I can assure you that before deciding to open a company in the U.S. we did our homeworks. We know it will not be easy but we are entrepreneurs and we know that every beginning is difficult. In any case we already have some interesting european companies who asked us to represent them in U.S.A.

After all, in our conversations I clearly explained to you that we were not interested in being the major shareholders (see the case of F.D.I.) but in participating, even on a minority base, of sound companies. Hence, if we would be the major shareholders of Metfor is not because we pretend to own the company but because this is an idea which was originated from our side and because we are willing to pay for it.

I also do not understand at this point, what are the policies of F.D.I. How can you be a neutral consultant and, in the same time, be agent of some plant manufacturers? This would automatically exclude FDI from having a formal relationship with other plant producers.

Would it not be more convenient for F.D.I. to be a `non evident shareholder' of a company which is established with the specific objectives of selling plant items and perhaps some kind of sofeware?

In any case, I am sorry but at this point I cannot defend anymore our participation into F.D.I. For sure, you and me share very similar feelings and interests for forging technology but we see the business world with different eyes.

I am now persuaded that if we both would buy each other's shares, we would encounter a lot of complications to which I am not used. Of course this decision does not have to affect our friendly relationship. We can always exchange points of view and, why not, if opportunities arise, we could do some business together. For instance, we are prepared to buy engineering services from F.D.I. in the same way as F.D.I. may intend to buy tooling or any kind of Hardware from SMB.

Despite the fact that our discussions did not lead to a formal agreement, I think that these were fair and constructive and, for sure, we know better the capabilities of our companies.

Looking forward to meeting you again soon, I meanwhile remain with my best personal regards.

G. Martinelli,
SMB BIASCA.

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COUNCIL OF THE REVOLUTIONARY LEADERSHIP, MILITARY INDUSTRIALIZATION BOARD, PEOPLE'S IRON AND STEEL MILLS.

[Page: H7880]

`Planning, Continuity, Technology;

No. 268--Date July 22, 1988.

(Confidential and Urgent):

To: Military Industrialization Board.

Re: Used machine and tools.

With reference to your letter No. 1881/1/4 of June 19, 1988 we enclose a file indicating our itemized needs in individual machines and tools with their spare parts to satisfy the plan for the year 1989.

With best wishes,

Sincerely yours

[Signature illegible] General Director, Sahi Hammadi Sakr.

A copy to: Division of Planning, Follow-up and Technology, and this with the highest priority please!
Janan/Zaki, July 17[?]

Dear Mr. Ra'd: Get in touch with Mr. Janan in Nasar Facility, to assure the transfer of the copy to the office of Dr. Safa in London.
Janan George Hamama.

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August 2, 1988.

A copy to London and another to the United States.

To: Mr. Janan George Hamama Nasor People's Mills.

Concerns: Used Machines and tools.

Dear Sir: We convey this request to you from the People's Iron and Steel Mills for individual machines and tools with the appropriate spare parts. They will satisfy the needs of the aforementioned mills as expressed in their production plan.

We hope that you get in touch as soon as possible with Dr. Safa' at his office and with our best wishes and appreciation we remain

Sincerely yours

Ra'd Nur Al-Din al-Rifa'i,

Research and Development Military Industrialization Board.

Enclosures: requests (five pages).

Additional copies: to London; to the United States.

[Translator's note: the date indicated in English is August 3, 1991 and not August 2, 1991 as it is in Arabic].

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Bonn, August 16, 1988.

The Embassy of Iraq, Trade Section, Duererstrasse 33, 5300 Bonn 2, Germany, Telephone (0228) 82031.

To: TDG--Technology and Development Group, LTd.: [Duke House, 37, Duke Street, London W1M 5DF].

Dear Professor Dr. Safa' Al-Habbubi:

I am enclosing a file with 45 lists and hope that you submit a bid on behalf of Technology and Development Group, Ltd. with respect to the contents of the enclosure.

With my best wishes I remain,

Sincerely yours,
Engineer Hanna Salih.

[Marginal note]:

Dear Engineer Hanna: Please send a copy to M.C.C. and keep another one with you! August 18, 1988 [?].

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Dear Sirs, We have the pleasure to forward you hereafter our best offer for the realisation on base of your drawings of the Archs of Victory.

Price:

4 Stainless steel swords approx. weight 19.8 tons 4 = 79.2 tons.

4 Structures work of arch approx. weight 14.1 tons 4 = 56.4 tons.

Total 135.6 tons.

FOB any European Port: Belgian Francs 1,450.000 bf/tons for completely finished work ready for erection, including all the required material to complete erection of archs and swords. (bolts, nuts, flags. .)

We would like to reserve the right to review our price if, in case of order when receiving the definitive drawings going more deeply in details, we have to adjust our weight estimation or our project of manufacture.

Technical specifications:

We have followed your indications and we stick to your drawings. Of course we would have to come back to you for approval in case we would like to bring any modification in realisation of works.

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Conditions: Delivery time: to be discussed in case of order.

Origin: EEC

Payment terms: As we will have to buy the steel and make some special tools for the shaping of the swords we would appreciate to receive: With the order 35%; at the delivery 65% by a letter of credit opened with the placing of the order, letter of credit opened exclusively on our account in the Middland, 3 lower thames street London OK.

Remark: This quotation does not include any engineering and consequently we have not undertaken any study of resistance to wind etc. . . . And we cannot assume any responsibility in the finished work. Our responsibility will cover the realisation of your drawings. Of course if we receive your order, when we will receive the definitive drawings we will check the engineering and perhaps make some suggestions from this end.

We hope we will have the honour to participate to the erection of this magnificent historical monument, and awaiting your prompt reactions we are dear sirs.

Sincerely yours.

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German Intelligence Report

Enclosure, 5 April 1990.

Re: Iraqi activities in the area of nuclear technology and missile development.

I. IRAQ; NUCLEAR ACTIVITIES

1. Introduction

Although Iraq ratified the Non-Proliferation Treaty in 1969, there are indications that it has been striving to possess nuclear weapons for a long time.

According to the findings to date, however, it is in possession neither of weapons-grade fission material (highly enriched uranium or plutonium) nor of installations for its production (uranium-enrichment installations, plutonium producing reactors, reprocessing equipment).

2. On the military use of nuclear technology

To date there has been little evidence of an Iraqi military nuclear program or information concerning the transfer of nuclear weapon-related technology or equipment to Iraq.

The attempt that was discovered in March to obtain [illegible] condensers specially designed for defense-technology applications-not [illegible]-the press was falsely told [illegible] on account of a number of application possibilities in defense technology (fuse systems for conventional warheads, military laser systems) [illegible] no unambiguous proof of an Iraqi nuclear weapons development program.

However, Iraqi activities in the area of uranium enrichment must be viewed as mounting evidence that such a program, or preparations for, one exists.

It is certain that Iraq intends to build a secret uranium enrichment plant that uses the gas-centrifuge process. Since there is no recognizable civil need for a uranium-enrichment plant-Iraq does not have any nuclear energy plants either in operation or under construction-one must conclude that Iraq is attempting to produce weapons-grade, highly enriched uranium.

However, Iraq is still in the early stages of developing gas centrifuges.

There are indications that the Iraqi armaments firm AL Qaqa state establishment, which has experience with modern high explosives and high-velocity measurement techniques, is involved in the development of the non-nuclear components of a nuclear weapon. The armaments firm Nassr state enterprise for mechanical industries in TAII near Baghdad is probably involved in the development and production of gas centrifuges.

In light of the state of affairs in Iraqi nuclear technology, the implementation of a possible nuclear-weapons development program is unlikely to succeed within the next five years without significant support from abroad. To date there has been no evidence of direct support of Iraq in its development of nuclear weapons.

[Page: H7881]

2.1 Procurement activities

Since 1987, increased Iraqi efforts have been observed to acquire modern technology for the construction of its own armaments industry from the industrialized nations through a network of organizations in Iraq and cover companies and subsidiaries abroad. Apart from projectile and chemical-weapons technology, one of the main obstacles in the way of Iraqi efforts is nuclear technology.

Since no later than the middle of 1988 Iraq has been trying to acquire the components and technology for uranium enrichment by means of the gas-centrifuge process in Great Britain, the Federal Republic of Germany, Holland, and France. These efforts have been only partially successful.

From the information gathered in connection with these procurement efforts in the countries names it has become apparent that technical data and construction documents classified as confidential pertaining to German centrifuges types have already made their way to Iraq. To what extent and in what ways this occurred is not yet known with any certainty.

2.2 On the recruitment of German centrifuge experts by Iraq

In 1988-89 Iraq moreover endeavored within the Federal Republic of Germany to obtain experts on the development and construction of gas centrifuges for a cooperative effort in Iraq. The extent to which these efforts were successful could not be definitely ascertained.

2.3 On the Iraqi procurement network

The following organizations in Iraq and Iraqi-controlled firms in Western Europe have emerged in connection with procurement activities:

Al Arabi Trading Corporation, Baghdad, Iraq, Director: Faruk TAHA.

Lahib Nari Import/Export Corporation, Baghdad, Iraq.

Technical Corporation for Special Projects (TECO), Baghdad, Iraq, Director: Abdulahad Aboodi ABLAHAD.

Industrial Projects Company, Baghdad, Iraq, Company Members: Ali Abdul Mutalib Ali, Dr. Mahdi F. Muhammad, Dr. Adil Mahir Jassim, Dr. Ford Nadhim Hakee.

Nassr State Enterprise for Mechanical Industries, Taji near Baghdad, Iraq.

Al Qaqa State Establishment, Iskandariya near Baghdad, Iraq.

Technology Development Group (TDG), London, Great Britain, Director: Dr. Safa Al Haboobi; Company Members: Hana Paulus Jon Odisho, Saad Tahir, Adnan Al Ameiri, Dr. Fadel Kadhum, Nassir A. Nainsi.

Technology Engineering Group (TEG), Kent, Great Britain, Director: Anees Mansour Wadi.

RWR International, London & Kent, Great Britain, Director: Roy Ricks.

Euromac London Ltd. and Atlas Equipment Ltd., London, Great Britain, Director: Ali Ashour Dahgir; Company Members: Ted Amyuni, Jeanine Speckman.

Euromac SRL, Monza, Italy, Company Members: Hussein Abbas Al Khafaji, Kassom Abbas Al Khafaji, Mohammed Samir.

Babil International Sarl, Neuilly-sur-Seine, France, Company Members: Al Khafaji Saban, Pierre Dragoul.

Matrix Churchill, Coventry, Great Britain.

Matrix Churchill Corporation, Solon, Ohio, USA.

II. IRAQ: THE STATE OF PROJECTILE DEVELOPMENT

1. Introduction

Projectile development in Iraq was once again thrust into public view with the launch of a space rocket on 12/5/89. Iraq further made known that apart from the space rocket it had also developed two surface-to-surface rockets with a range of 2,000 kilometers. Below is a survey of the state of Iraqi rocket development:

2. Rocket Technology

Iraq is following two parallel lines in its development of projectiles. The one involves the liquid-fuel technology of the Soviet SCUD-B; the other involves the solid-fuel technology of the Argentinean CONDOR-II.

2.1 Liquid-fuel technology

All projectiles used or tested by Iraq to date are based on SCUD technology according to our present view of the situation. Work on these projectiles is supposedly being carried out within the parameters of projects 144 and 1728.

2.1.1 Surface-to-surface rockets

The SCUD-B technology used by Iraq was developed in the Soviet Union in the fifties and early sixties. This rocket, also designated as the SS-IC, had a range of 300 kilometers with a payload of one ton.

This rocket was modified according to available evidence so that the range was increased to approximately 650 kilometers through a reduction of the payload to approximately 300 to 350 kilograms. The projectile, designated the Al Hussein, was then used against Teheran in the war with Iran.

According to our evidence, its range was further increased to approximately 900 kilometers by an extension of the fuel tank. The rocket, designated Al
Abbas, was first tested according to Iraqi statements in April of 1988. The payload is supposedly some 400 kilograms.

11.20 meters in length and 0.90 meters in diameter, the AL HUSSEIN corresponds more or less to the SCUD-B (length: 11.50 meters; diameter: 0.88 meters). Of the same diameter, the AL ABBAS is supposedly some 14.50 meters in length.

There is also evidence that Iraq is working on the development of other projectiles with ranges of up to 2,000 kilometers. These are supposedly liquid-fuel rockets. They may be those two systems mentioned by Iraq (range: 2,000 kilometers). One system is called TAMMUZ I.

2.1.2 Space delivery vehicle

Iraq launched a space delivery vehicle for the first time on 12/5/89. This three-stage projectile is called AL ABID, and it is 25 meters long and weighs 48 tons. The thrust of the first stage is supposedly 70 tons.

The launch presumably took place at the newly-erected Rufhah testing grounds (32-13-32 North, 42-56-25 East). This installation is not yet fully completed.

There is evidence that the first stage is composed of five linked and modified SCUD boosters. The second stage is likewise supposedly a modified SCUD with a larger diameter; the third stage may be earmarked for a solid-fuel engine. During the test only the first stage was ignited. It is possible that the second and third stages were dummies.

2.2 Solid-fuel technology (Project 395)

Project 395 has been conducted under the general management of the Technical Corps for Special Projects (TCSP). This project involves an ambitious projectile development program based on the Argentinean CONDOR-II technology. The program is supposed to be realized in close cooperation with the special organization, the Arab League Industrial Development Organization (ALIDO), with its headquarters in Baghdad.

2.2.1. Projectiles

The two-stage projectile is 10.30 meters in length and 0.80 meters in diameter; it weighs approximately 4,800 kilograms. Unlike the Argentinean CONDOR-II, which has a solid-fuel engine in the first stage and a liquid-fuel engine in the second stage, Iraq favors solid fuel engines in both stages. With this configuration, the payload is supposedly 350 kilograms, and the range approximately 1,000 kilometers.

The further development and future production of the liquid-fuel engine of the second stage is being pursued in tandem with this, however. There is evidence that the two-stage projectile could be equipped with this engine as a third stage. Such a rocket would then be intended as a space delivery vehicle for limited payloads.

2.2.2 Production sites

Three production sites for project 395 have been under construction southwest of Baghdad since late 1987-early 1988. The construction of the infrastructure is known under the terms of the DOT treaty. The installations have supposedly been provided with materiel; no production has yet been observed there, however.

3. Concluding remark

Iraq sees itself as the technological leader within the Arab camp. One can therefore expect that the country will make every effort to move forward with its rocket development program.

The activities in this regard encompass the aforementioned lines of development. We are assuming that the country fell back on the `older' SCUD technology because the modern CONDOR-II technology was not or has not been available.

OFFICE OF FOREIGN ASSETS CONTROL, MARCH 27, 1992

Front Companies and Foreign Representatives of the Government of Iraq

Front Company/ Representatives and Address:

A.T.E. International Ltd. (f/k/a RWR International Commodities), 3 Mandeville Place, London, England.

A.W.A. Engineering Limited; 3 Mandeville Place, London, England.

Abbas, Abdul Hussein, Italy.

Abbas, Kassim, Italy.

Abraham, Trevor, England.

Admincheck Limited, 1 Old Burlington Street, London, England.

Advance Electronics Development Ltd., 3 Mandeville Place, London, England.

Ahmad, Rasem, P.O. Box 1318, Amman, Jordan.

Ahmad, Walid Issa, Iraq.

Al-Amiri, Adnan Talib Hassim, 43 Palace Mansions, Hammersmith, London, England.

Al-Arabi Trading Company Limited, Lane 11, Hai, Babil, Baghdad District 929, Iraq.

Al-Azawi, Dafir, Iraq.

Al-Dajani, Leila N.S., P.O. Box 1318, Amman, Jordan.

Al-Dajani, Nadim S., P.O. Box 1318, Amman, Jordan.

Al-Dajani, Sa'ad, P.O. Box 1318, Amman, Jordan.

Al-Habobi, Dr. Safa Haji J., Flat 4D Thomey Court, Palace Gate, Kensington, England.

Al-Majid, Ali Hassan, Baghdad, Iraq.

Al-Majid, Hussein Kamel Hassan, Baghdad, Iraq.

Al-Ogaily, Akram H., Flat 2, St. Ronons Court, 63 Putney Hill, London, England.

Al-Rafidain Trading Company, Bombay, India.

Al-Takriti, Barzan Ibrahim Hassan, Geneva, Switzerland.

Al-Takriti, Sabawi Ibrahim Hassan, Baghdad, Iraq.

Al-Takriti, Watban, Baghdad, Iraq.

Ali, Ali Abdul Mutalib, Germany.

Allen, Peter Francis, `Greys', 36 Stoughton Lane, Stoughton, Leicersterschire, England.

Amaro, Joaquim Ferreira, Praca Pio X, 54-10o Andar CEP 20091, Rio de Janeiro, Brazil.

Arab Petroleum Engineering Company, Amman, Jordan.

Arab Projects Company, S.A. Ltd., P.O. Box 1318, Amman, Jordan; P.O. Box 7939, Beirut, Lebanon; P.O. Box 1972, Riyadh, Saudi Arabia.

Archi Centre I.C.E. Limited, 3 Mandeville Place, London, England.

Archiconsult Limited, 12 Buckingham Palace, London 5, England.

Armoush, Ahmad, White Star Bldg., P.O. Box 8362, Amman, Jordan.

Armoush, Ali, White Star Bldg., P.O. Box 8362, Amman, Jordan.

Associated Engineers, England.

Atlas Air Conditioning Company Limited, 55 Roebuck House, Palace Street, London, England.

Atlas Equipment Company Limited, 55 Roebuck House, Palace Street, London, England.

Aziz, Fouad Hamza, Praca Rio X, 54-10o, Andar, CEP 20091, Rio de Janeiro, Brazil.

Banco Brasileiro-Iraquiano S.A., Praca Rio X, 54-10o, Andar, CEP 20091, Rio de Janeiro, Brazil (Head Office and City Branch).

Bay Industries, 10100 Santa Monica Boulevard, Santa Monica, California.

Daghir, Ali Ashour, 2 Western Road, Western Green, Thames Ditton, Surrey, England.

Dominion International, England.

Endshire Export Marketing, England.

Euromac European Manufacturer Center SRL, Via Ampere 5, 20052, Monza, Italy.

Euromac Ltd., 4 Bishops Avenue, Northwood, Middlesex, England.

Euromac Tansporti International SRL, Via Ampere 5, 20052, Monza, Italy.

Falcon Systems, England.

Fattah, Jum's Abdul, P.O. Box 1318, Amman, Jordan.

Geodesigns, England.

Hand, Michael Brian, England.

Henderson, Paul, 4 Copt Oak Close, Tile Mill Conventry, Warwickshire, England.

Hussein, Udai Saddam, Baghdad, Iraq.

I.P.C. International Limited, England.

I.P.C. Marketing Limited, England.

Investacast Precision Castings Ltd., 112 City Road, London, England.

Iraqi Airways, Baghdad, Iraq; Vienna, Austria; Dhaka, Bangladesh; Rio de Janeiro, Brazil; Beijing, China; Prague, Czechoslovakia; Copenhagen, Denmark; Frankfurt, Germany; Rome, Italy; Tokyo, Japan; Casablanca, Morocco; Netherlands; Warsaw, Poland; Moscow Russia; Tunis, Tunisia; Ankara, Turkey; Abu Dhabi, UAE; London, England; Los Angeles, California; Southfield, Michigan; New York, New York; Sanaa, Yemen; Belgrade, Yugoslavia.

Iraqi Allied Services, England.

Iraqi Freight Services Limited, England.

Iraqi Reinsurance Company, 31-35 Frenchurch Street, London EC3M 3D.

Iraqi State Enterprise for Foodstuffs, P.O. Box 1308; Colombo 3, Sri Lanka; P.O. Box 2839, Calcutta 700.001 India.

Iraqi State Enterprise for Maritime Transport, Bremen, Germany; Amman, Jordan.

Iraqi Trade Center, Dubai, United Arab Emirates.

Jasim, Latif Nussayyif, Baghdad, Iraq.

Jon, Hana Paul, 19 Tudor House, Windsor Way, Brook Green, London.

Jume'an, George, P.O. Box 1318, Amman, Jordan.

Kadhum, Dr. Fadel Jawad, Alvaney Court, 250 Finchley Road, London, England.

Keencloud Limited, 11 Catherine Place, Westminster, London, England.

Koshaba, Robert Kambar, 15 Harefield Road, Maidenhead, Berkshire, England.

Matrix Churchill Corporation, 5903 Harper Road, Cleveland, Ohio 44139.

Meed International Limited, 3 Mandeville Place, London, England.

Mohamed, Abdul Kader Ibrahim, Jianguomenwai Diplomatic Housing Compound, Building 7-1 5th Floor, Apartment 4, Beijing, China.

Omran, Karim Dhaidad, Iraq.

Pandora Shipping Co. S.A., Honduras.

Petra Navigation & International Trading Co. Ltd., White Star Building, P.O. Box 8362, Amman, Jordan; Armoush Bldg., P.O. Box 485, Aqaba, Jordan; 18 Hude Sharawi Street, Cairo, Egypt; Hai Al Wahda Mahalat 906, 906 Zulak 50, House 14, Baghdad, Iraq.

Rafidain Bank, Baghdad, Iraq; Manama, Bahrain; Cairo, Egypt; Amman, Jordan; Aqaba, Jordan; Beirut, Lebanon; Abu Dhabi, UAE; London, England; Sanaa, Yemen.

Rajbrook Limited, England.

Raouf, Khalid Mohammed, Prac AE9a Pio X, 54-10o Andar, CEP 20091, Rio de Janeiro, Brazil.

Reynolds and Wilson, Ltd., 21 Victoria Road, Surbiton, Surrey KT6 4LK, England.

Ricks, Roy, 87 St. Mary's Frice, Benfleet, Essex, England.

Schmitt, Rogerio Eduardo, Prac AE9a Pio X, 54-10o Andar, CEP 20091, Rio de Janeiro, Brazil.

Sim, Gilberto F., Prac AE9a Pio X, 54-100 Andar, CEP 20091, Rio de Janeiro, Brazil.

S.M.I. Sewing Machines Italy S.P.A., Italy.

Souza, Francisco Antonio, Prac AE9a Pio X, 54-10o Andar, CEP 20091, Rio de Janeiro, Brazil.

Speckman, Janine, England.

Tall, Aktham, P.O. Box 1318, Amman, Jordan.

Taveira, A. Arnaldo G., Praca Pio X, 54-100 Andar, CEP 20091, Rio de Janeiro, Brazil.

T.D.G. (a.k.a. Technology Development Group), Centric House 390/391, Strand, London, England.

T.E.G. Limited, 3 Mandeville Place, London, England.

T.M.G. Engineering Limited, Castle Row, Horticultural Place, Chiswick, London.

TNK Fabrics Limited, England.

Trading & Marine Investments, San Lorenzo, Honduras.

U.I. International, England.

Whale Shipping Ltd., Government of Iraq, State Organization of Ports, Maqal, Basrah, Iraq.

Zahran, Yousuf, P.O. Box 1318, Amman, Jordan.

[Page: H7882]

The SPEAKER pro tempore (Mr. Bennett). Under a previous order of the House, the gentleman from New York [Mr. Owens] is recognized for 60 minutes.

[Mr. OWENS of New York addressed the House. His remarks will appear hereafter in the Extensions of Remarks.]

The SPEAKER pro tempore. Under a previous order of the House, the gentlewoman from District of Columbia [Ms. Norton] is recognized for 60 minutes.

[Ms. NORTON addressed the House. Her remarks will appear hereafter in the Extensions of Remarks.]

END