White House, Fearing Intentions, Blocks Sale of Furnaces to Iraq

The White House decided last week to block the export of five industrial furnaces to Iraq, based on concern that they might be used to make metals for nuclear weapons.

The decision overrides a Commerce Department decision last year that Consarc Corp., based in Rancocas, N.J., did not require a validated export license on the rationale that the furnaces had no “strategic significance,” said Raymond Roberts, Consarc’s president.

But last week, Bush administration officials told Consarc that “it’s not the nature of the equipment but the intentions of the end user that are unclear at this point,” Roberts said. Iraq drew world attention earlier this year when it threatened to use chemical weapons against Israel if attacked first.

At the time, the United States and Great Britain collaborated to thwart what they claimed was an Iraqi attempt to smuggle nuclear trigger devices from the United States to Iraq.

Iraqi officials first expressed interest in Consarc’s furnaces a few years ago at a trade show, Roberts said. They said the furnaces would help them manufacture artificial hips and knee joints, and help conduct research in the material sciences.

“The nature of the equipment that they requested was certainly consistent with those two objectives,” Roberts added. United Press International estimated the value of the furnaces at $13 million.

Consarc has since submitted the more formal, validated export license request, but has yet to discuss the possibilities of gaining approval with U.S. officials, Roberts said.

U.S. CRITICIZES IRAQ

Meanwhile, the State Department criticized Iraq on Tuesday for amassing troops on its border with Kuwait, which the Washington Post estimated at 30,000.

Iraq, which is trying to pay off war debts incurred in its recent 10-year war with Iran, has accused Kuwait of driving down world oil prices by selling barrels beyond limits agreed to by the 13-nation Organization of Petroleum Exporting Countries. OPEC is scheduled to meet later this week.

There is “no place for coercion and intimidation in a civilized world,” said department spokeswoman Margaret Tutwiler.

Tutwiler said that there has been a troop build-up on both sides near the Kuwaiti-Iraq border, but she refused to say which country began the build-up.

Tutwiler also confirmed that the United States has been conducting joint military exercises this week with the United Arab Emirates at the other end of the Persian Gulf.

The furnace export application joins a growing number of unapproved requests by U.S. companies to sell industrial and other advanced equipment to Middle East countries. Among the applications that have not gained approval are several requests by U.S. companies to sell super-computers to research facilities in Israel.

Some of the applications, by Cray Research Inc. of Minneapolis and the International Business Machines Corp. of Armonk, N.Y., are more than two years old, and have not been approved out of fear that Israel would use the supercomputers to design nuclear weapons.

The Israeli facilities for whom export applications are pending are Bar-Ilan University, the Technion-Institute of Technology and the Weizmann Institute of Science.

On another front, the Pentagon last month rejected an Israeli appeal to allow it to spend $60 million in U.S. foreign aid dollars in West Germany to build “combat information centers” for Dolphin-class submarines being built for Israel.

The Pentagon had earlier allowed Israel, which receives $1.8 billion annually in U.S. military aid, to spend $180 million of it on two Dolphin-class diesel submarines made in West Germany, on the basis that no U.S. shipyard makes such submarines.

But the Defense Department’s Paul Wolfowitz, assistant secretary of defense for inter-national security affairs, rejected the latest request, arguing that U.S. companies can make the combat information centers, principally the Raytheon Corp.

Instead, Israel has decided to use $60 million in its own taxpayer money to have the sonar, or guidance component, made primarily by a West German firm, Krupp Atlas Elektronik. It will spend an additional $40 million in U.S. military aid for electronics work by the New York-based Loral Corp.