CRITICS OF THE BUSH ADMINISTRAtion call the affair "Iraqgate." The Administration's defenders call it a "witch hunt." Others call it a confusing mess. But whatever the term, the overeager attempts by the Reagan and Bush administrations to make friends with Iraq in the years before the Persian Gulf War -- and later attempts to contain the political damage of that failed policy -- have become yet another problem for George Bush as he struggles against increasingly heavy odds to win a second term.
Iraqgate is apparently not another Watergate. Despite superheated rhetoric from some quarters, there is still little or no hard evidence of massive abuses of power or illegal covert operations. The role of the Bush Administration seems to focus mainly on efforts to inoculate itself against political embarrassment. But that is bad enough, particularly when so many nominally nonpolitical agencies are involved -- including the CIA and the departments of State, Justice, Agriculture and Commerce. And there remains the possibility that evidence of more serious charges could be brought.
Democratic Senator David Boren, chairman of the Senate intelligence committee, last week called for the appointment of a special prosecutor to investigate the allegations. In a defensive counterstrike, Attorney General William P. Barr announced that he had asked retired federal Judge Frederick B. Lacey of New Jersey to investigate the Justice Department's handling of the case against an Italian bank, Banca Nazionale del Lavoro, whose Atlanta branch provided $4 billion in illegal loans and loan guarantees to Iraq. In the meantime the CIA continues to turn over new files, including one report that U.S. and Italian officials had accepted bribes in the B.N.L. case.
The seeds of the affair were sown back in 1982 during the Iran-Iraq war, when President Reagan approved a "tilt" to Iraq as part of a campaign to keep either side from dominating the Persian Gulf region. That same year, the Reagan Administration scratched Iraq from its list of countries supporting terrorism and, in 1984, for the first time in 17 years, extended full diplomatic recognition to Saddam Hussein's Baghdad government. During the '80s, the U.S. guaranteed billions of dollars in commodity credits and loans to Iraq, while the CIA began secretly sharing intelligence information with Saddam.
After the Iran-Iraq war ended in 1988, President-elect Bush was faced, according to a State Department study, with deciding whether "to treat Iraq as a distasteful dictatorship to be shunned where possible, or to recognize Iraq's present and potential power in the region and accord it relatively high priority . . . ((with)) steady relations concentrating on trade." Bush eventually, and not without justification, chose the latter course. On Oct. 2, 1989, he signed National Security Directive 26, setting out the ways in which closer ties with Iraq were to be achieved, including "nonlethal forms of military assistance."