The Man Who Armed Iraq

In March of l983, Brennan recalls, he was enroute to Iraq with Soghanalian when the two men decided to take a few days off in Geneva. While there Brennan got a call from another former White House friend, Spiro Agnew. The ex-vice president had a client who wanted to sell military uniforms to Iraq. Agnew said he had heard through the grapevine that Brennan now had first-rate connections in Baghdad.

The company Agnew was representing, Pan-East International, had located a firm in Tennessee willing to manufacture the uniforms. Brennan, Soghanalian, and Pan-East officials later went to Baghdad to consummate the deal. But the Iraqis, it turned out, wanted far more uniforms than the Tennessee company had the capacity to produce. Pan-East began a search for a new supplier, negotiating with companies in South Korea and Taiwan, but to no avail. Millions of dollars in commissions awaited, but there was no supplier.

Pan-East recommended that Brennan use his connections from his days with Nixon and approach Romanian President Ceausescu. Recalls Brennan: "When we exhausted our other options, I thought, jeez, we should try the East Bloc. Labor prices there are virtually zero!"

Brennan and Pan-East were received by Ceausescu personally after they arrived in Bucharest. A letter of recommendation Brennan was carrying from his former boss, Richard Nixon, helped smooth the way. In the letter to Ceausescu, dated May 3, l984, Nixon wrote, "I trust that this relationship, which involves the production of military uniforms and accessories, will be a very successful and longstanding one. I can assure you that Colonel Brennan and former Attorney General John Mitchell will be responsible and constructive in working on this project with your representatives." Nixon closed the letter by conveying his "warm and personal regards to you and Mrs. Ceausescu."

In Bucharest, Ceausescu agreed to manufacture the uniforms. On April 26, l984, Pan-East entered into two separate contracts with Iraqi military officials, totaling some $181 million. After the deal was completed, Nixon sent a second letter to Ceausescu expressing his appreciation for the role the Romanian dictator had played. "My good friend John Mitchell told me recently," Nixon wrote on October 31, l986, "that the contract between the Ministry of Light Industries and Pan-East International was complete, and I wanted to let you know how highly Mr. Mitchell spoke of the diligence of the Romanian workers who participated in the project. From all reports he had received from Pan-East, the workmanship was absolutely superb."

A spokesman for Nixon confirmed recently that the former president's only involvement in the Iraqi deal was the two letters he wrote on behalf of his former White House aides. The spokesman said Nixon did not personally profit from the deal, and there is no evidence available to challenge that claim. Ceausescu and his wife were executed by their own people last Christmas and thus are unavailable for comment. Brennan says he does not know whether the late dictator profited from the deal. Soghanalian, in a published interview, refused to discuss specifics, but said Ceausescu "did not go hungry."

The project, however, was not to have a happy ending. Unbeknownst to Brennan and Mitchell, Soghanalian owed the Iraqi government seven million dollars he had been paid earlier to build a helicopter hangar and an airstrip outside Baghdad. They had never been completed and the Iraqis were demanding their money back. Soghanalian attended to the matter at a meeting on September 28, 1984.

Attending the meeting, held at the Hotel Scribe in Paris, were Soghanalian, Brennan, and representatives of Pan-East. The conversations took place entirely in Arabic and French, and Brennan didn't understand a word. Only much later did he discover what had transpired. According to Brennan, Pan-East agreed to transfer directly to Iraq the commission it owed Soghanalian and Brennan's company, Global. And thus was Soghanalian's debt paid off.

Pan-East had signed a contract to pay Soghanalian a 4.8 percent commission on the sale of the uniforms, 40 percent of which was to go to Global, according to a copy of the contract. Brennan says he and Mitchell stood to make more than $3.5 million from the deal. For several years, Brennan claims, Soghanalian promised that the money would be forthcoming. Finally, in October of 1989, Brennan and Mitchell (through his estate) sued Soghanalian in federal court, alleging "fraud, misrepresentation, conspiracy to defraud, and breach of contract." The suit has yet to come to trial.

Research assistance: E. Damian Leone and Andrew Watson

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