By Michael E. Miller
By Ryan Yousefi
By Kyle Munzenrieder
By Sabrina Rodriguez
By Michael E. Miller
By Carlos Suarez De Jesus
By Luther Campbell
By Kyle Munzenrieder
While there is no evidence that George Bush, then vice president, knew of the covert efforts to arm Saddam Hussein, several sources say Bush was a key behind-the-scenes proponent of a broader change of policy in which the U.S. would tilt toward favoring Iraq in its war against Iran. Reagan, Bush, and other policymakers feared a military victory by the Ayatollah Khomeini, and viewed Saddam as a bulwark against the fundamentalist Islamic fervor Khomeini was attempting to spread throughout the Mideast. After he was elected president, Bush intensified efforts to develop closer business, diplomatic, and intelligence ties between Iraq and the United States.
At the operational center of much of the clandestine policy to militarily strengthen Iraq was Sarkis Soghanalian, the controversial Miami arms dealer considered by many law enforcement officials to be the largest private weapons merchant in the United States, and one of the top in the world. Soghanalian, a Lebanese national who maintains a waterfront home on Hibiscus Island in Miami Beach, administers a vast international business network from his offices at Pan Aviation, his air cargo company, located at the northern edge of Miami International Airport. His weapons brokerage, United Trade International, reportedly sells more than one billion dollars in arms each year, bringing profits, Soghanalian claims, of more than ten million dollars annually. For many years Soghanalian has enjoyed a close working relationship with Saddam Hussein's military apparatus. And while that relationship has been extremely profitable, it has also led to serious legal trouble. Today Soghanalian faces federal criminal charges stemming from his efforts to sell armaments to the man President Bush has compared to Adolf Hitler.
Attempts to secretly arm Saddam Hussein began in the early years of Ronald Reagan's first term as president. Reports were filtering back to the State Department from the U.S. Embassy in Amman that Jordan's King Hussein was pressing for the U.S. to militarily assist Iraq, which was suffering serious reverses in its war with Iran. The Ayatollah's forces had leveled many of Iraq's major oil facilities and were laying siege to Basra, Iraq's second largest city. King Hussein, an ally of Iraq, urged the U.S. to find some way of helping Saddam prevent a full and complete victory by Iran.
Shortly thereafter, William Eagleton, the U.S. charge d'affaires in Baghdad (the senior U.S. diplomat in Iraq), recommended to his superiors that the Reagan Administration reverse its policy of neutrality and allow shipments of U.S. arms to Iraq through third countries. Officials throughout the Reagan Administration supported the policy recommendation.
But others had reservations. To carry out Eagleton's plan, the U.S. would have to lift its weapons embargo against Iraq, something Congress certainly would never allow. An alternative was to help arm Iraq secretly, without lifting the embargo, without informing Congress, and in circumvention of the law. The Arms Export Control Act prohibits the transfer of U.S. weapons to embargoed nations via third countries. Those countries that legally import arms from the U.S. pledge before the sale is made that they will not transfer the weapons to another country without official, written approval from the U.S. government. The law also prohibits all U.S. citizens - including government officials - from arranging arms sales to one nation with the intention of transferring them to an embargoed country such as Iraq. To do so would implicate the participants in a conspiracy to violate the law.
Still, Eagleton pressed his argument, although he did not advocate, as his superiors did, conducting such activities in violation of the law. In October of l983, Eagleton cabled his superiors with this recommendation: "We can selectively lift restrictions on third-party transfers of U.S. licensed military equipment to Iraq." Later, in the same highly classified cable, he suggested that "we go ahead and we do it through Egypt."
High-level U.S. intelligence sources now say the Reagan Administration adopted Eagleton's recommendation to arm Saddam through third countries, but ignored his warning to stay within the limits of the law. Instead administration officials chose to proceed without lifting or changing the terms of the embargo against Iraq, and despite the fact that some of the transactions appear on their face to have violated the Arms Export Control Act. Further, the new secret policy directly contradicted what the administration was publicly telling Congress and the American people.
The Reagan Administration, this investigation has found, conducted another clandestine project, in apparent violation of the law, by which Iraq would receive American arms, this one involving a secret Pentagon program to covertly obtain Soviet weaponry and military technology. In l982 and l983, administration officials approved two separate arms transactions with Iraq - never consummated - in exchange for the Iraqis providing the U.S. with Soviet weapons. Some details of the two potential arms deals were originally disclosed in a little-noticed March l987 story in Newsday. The newspaper reported that in l982 administration officials agreed to swap four l55-millimeter, self-propelled howitzers for a Soviet T-72 tank. The Iraqis, however, became fearful at the last minute and backed out. In a second deal, the U.S. in 1983 agreed to provide, according to an Iraqi account of the incident, dozens of l75-millimeter cannons and shells in exchange for a T-72 tank and payment for the weapons. When Pentagon officials unexpectedly raised the price of the cannons, the Iraqis canceled the deal.
This investigation has confirmed a third instance in which the U.S. was willing to trade arms to Iraq in return for Soviet military technology, despite the existing arms embargo. According to U.S. officials involved in the scheme, and supported by documents obtained during the investigation, the plan developed in early 1983, after an executive with Hughes Aircraft Corporation informed Pentagon officials of Iraqi offers to provide a Soviet-made Hind-D helicopter in exchange for the opportunity to purchase a number of American military helicopters. According to classified documents, the Hughes executive, Carl D. Perry, met twice with Lt. Col. Norman Blaylock, who was in charge of the Pentagon's secret acquisition program, in April and May of l983.
Intelligence sources now say that Caspar Weinberger, in his role as secretary of defense, was briefed about and approved of this possible arms exchange, as well as the other two. (Both the Soviets' T-72 tank and the Hind-D helicopter were of great interest to the U.S. military because of the role they would be expected to play in any European clash between NATO and Warsaw Pact forces.) Due to Weinberger's involvement, the sources say, Pentagon officials believed that congressional intelligence committees had been told of the transactions, thus making them legal. But Weinberger and other Pentagon officials, the sources say, were concerned about something else - the involvement of an individual participating in the helicopter deal: Sarkis Soghanalian.
Weinberger's reported uneasiness with Soghanalian's role in a highly secret weapons exchange stemmed not from a lack of familiarity (Soghanalian, after all, had worked closely with the Central Intelligence Agency for many years) but rather from the Miami arms merchant's history of federal indictments for alleged criminal activity. According to one intelligence source, Carl Perry, the Hughes executive, "was told this [arms deal] was a top priority and the Pentagon was very interested. But we would in no way have anything to do with Soghanalian. If Perry could cut out Soghanalian, we were interested. But as long as he was involved, we were going to pass."
Perry never got the opportunity to put together a deal on his own. He was fired from his job at Hughes a short time later and became a target of a federal investigation after it was learned that he and another Hughes executive were attempting to arrange a separate - and allegedly illegal - sale of military helicopters to Iraq. Their partner in that scheme: Sarkis
Documents describing Soghanalian's activities show that over the last decade he has brokered billions of dollars in arms sales to Saddam Hussein. So intimate were his relations with the Iraqi regime that one former U.S. Customs investigator noted, "The word was out that if anyone wanted to do business in Iraq, Sarkis was the man to see." A confidential investigative report prepared by the Customs Service reiterated the investigator's comments. The report related that Soghanalian was to attend a meeting at the Iraqi embassy in Washington on June l4, l984 to arrange arms shipments to Iraq: "Soghanalian has already provided from sources outside the U.S. 500 surface-to-surface Russian-made missiles and is to provide explosives and ammunition from Brazil. Soghanalian's capacity to provide major weaponry is an established fact." Though federal prosecutors claim that some of Soghanalian's dealings with Iraq have been illegal, this investigation has found evidence that officials of the Reagan Administration worked behind the scenes to encourage and facilitate some of his efforts to arm Saddam.
Court records, for example, show that in 1981 Soghanalian brokered a huge, $1.4 billion sale of French-made howitzer cannons to Iraq. U.S. intelligence sources have confirmed that the Iraqis first approached the Reagan Administration about purchasing such long-range artillery directly from the U.S. But because of the arms embargo, the Reagan Administration instead encouraged private arms traffickers and friendly third countries.
The Iraqis put Soghanalian in charge of the effort, and he approached several European nations before the French government of Francois Mitterand agreed to sell dozens of l55-millimeter howitzers to Saddam. According to intelligence sources, the Reagan Administration, through a diplomatic back channel, encouraged the French to finalize the sale. Two highly reliable law enforcement sources who have been able to review classified U.S. intelligence files relating to the French howitzer deal - including documents from the CIA, National Security Agency, Pentagon, and State Department - say those files show that U.S. intelligence agencies had extensive knowledge of and monitored the howitzer shipment to Iraq. And there is nothing in those same files to suggest, the sources say, that the Reagan Administration did anything to discourage the transaction.
The French-made howitzers - among the most expensive, powerful, and sophisticated in the world - have since been photographed by U.S. spy satellites on the Iraq border, poised against U.S. troop positions in Saudi Arabia.
Still other evidence shows that some of Soghanalian's sales of military equipment to Iraq were approved by high-level officials of the Reagan Administration. Among other transactions, Soghanalian served as a broker in delivering more than $181 million in military uniforms to the Iraqi regime from the late Romanian dictator Nicolae Ceausescu, according to documents obtained during this investigation and interviews with several of the principals involved. Two of Soghanalian's partners in the sale maintained close contacts with officials of the Reagan Administration: the late John Mitchell, who served as attorney general during the Nixon Administration, and Col. Jack Brennan, who served in the Nixon White House as the president's personal military advisor. Brennan and Mitchell also assisted Soghanalian with the sale to Iraq of armored cars and civilian helicopters.
Before Ronald Reagan became president, relations between the United States and Iraq were virtually nonexistent. Saddam's rule of terror, which officially began in July of 1979, required foreign enemies, and America was one. In l980 he stated that Americans "were the enemies of the Arab nation and the enemies of Iraq" and vowed that someday he would destroy them.
But the U.S. relationship with Iraq was soon to undergo a dramatic transformation. In the early l980s, Iraq was facing serious reverses in its war against Iran. By l982, with major oil facilities destroyed and with Iran aggressively on the attack, Saddam needed new allies if his regime were to survive.
The possibility that the Ayatollah Khomeini might win the war frightened the Reagan Administration. If that happened, the Ayatollah might be able to spread his fundamentalist Islamic revolution throughout the Gulf, threatening Saudi Arabia, Kuwait, and the other oil-rich nations. America's archenemy might very well end up in control of the Gulf's vast oil reserves. An assessment by the Senate Foreign Relations Committee would conclude: "In the worst-case scenario, the United States would face the choice between permitting Iran to dominate the West's oil supply...or direct U.S. military intervention." So when Saddam approached the U.S., he was met with a receptive audience among those in the Reagan Administration who viewed him as a buffer against Iranian domination of the Gulf.
In rapid succession, U.S. officials launched a number of initiatives designed to aid Iraq. In 1982 the country was removed from the government's list of nations sponsoring terrorism, despite clear evidence from U.S. intelligence agencies that Saddam never changed his practice of aiding notorious terrorists such as Abu Nidal and Abu Abbas. (Soon after Saddam's invasion of Kuwait, President Bush reinstated Iraq on the list of terrorist countries.)
Then came financial aid, in the form of credits and loan guarantees from such U.S. institutions as the Commodity Credit Corporation and the Export-Import Bank. Suddenly tens of millions of dollars were available to Iraq for the purchase of American agricultural and manufactured goods.
In August of 1988, just five days after a cease-fire ended Iraq's eight-year war with Iran, Saddam turned his chemical arsenal on his own citizens, the Kurds of northern Iraq. The U.S. Congress reacted by attempting to impose trade sanctions, but administration officials successfully blocked the move.
When George Bush took office, he expanded on Reagan's enthusiastic embrace of Saddam. Bush ignored indisputable evidence of severe human rights abuses, and even attempted to derail a United Nations investigation of Saddam's use of chemical weapons. Instead he pushed harder still to increase economic aid and establish stronger trade ties to Iraq, and he met with tremendous success. After only a few days in office, he doubled the amount of credit from the Commodity Credit Corporation to about one billion dollars per year. Trade soon reached record highs. Department of Commerce figures, for example, show that from January to September of 1989, imports and exports between the U.S. and Iraq totaled nearly three billion dollars.
With the help these infusions of cash and guaranteed loans provided, Saddam was able to build one of the most powerful military machines in the world. In the past decade, he has spent an estimated $50 billion acquiring a sophisticated arsenal of weapons, much of it provided by Western nations whose armies now watch and wait from across the Saudi border. A significant portion of that build-up has been arranged by a single man: Sarkis Soghanalian.
The U.S. arms embargo against Iraq made direct American sales illegal, but after the Reagan Administration adopted its secret policy of supporting Saddam in the Iran-Iraq war, the embargo had little effect. Administration officials simply encouraged other nations, and private brokers such as Soghanalian, to send arms to Saddam. "The billions upon billions of dollars of shipments from Europe," recalls a former high-level intelligence official, "would not have been possible without the approval and acquiescence of the Reagan Administration."
Opportunities for direct U.S. business, however, were not completely closed. The Iraqis were able to receive hundreds of millions of dollars of American military equipment due to a loophole in the arms embargo. Between l985 and l990, Saddam legally purchased from the U.S. some $782 million in "dual use" goods, materials supposedly meant for civilian uses, but which also have military applications. Many of the sales were allowed by the Reagan and Bush administrations over the objections of the Pentagon, which warned that they would be used for military purposes. Commerce Department records indicate that between l985 and l990, the agency approved 273 licenses of "dual use" material to Iraq. But such sales were also common before 1985.
In l982, for instance, Iraq purchased 60 Hughes helicopters, which Saddam promised would be used only for civilian purposes. But an eyewitness account appearing in Aviation Week and Space Technology reported that at least 30 of the helicopters were being used to train military pilots. The Reagan Administration did not even do so much as mount a diplomatic protest.
Sources in the defense industry familiar with that sale say Sarkis Soghanalian brokered the deal for Hughes and received a hefty commission for his role.
Saddam's broken pledge to use the Hughes helicopters for civilian purposes apparently meant little to the State Department. Two years later officials approved an additional sale to Iraq of 45 Bell 214ST helicopters, despite the fact that the Bell 214ST is often used militarily and can be so converted at minimal cost. Saddam promised that the helicopters would be used only for recreation.
If the State Department was unfazed, at least one congressman took notice. "It is beyond belief that Iraq, with its foreign exchange reserves depleted by its conflict with Iran, would purchase 45 helicopters at $5 million apiece simply to transport civilian VIPs," wrote Rep. Howard Berman to then-Secretary of State George Shultz in November l984. "The helicopter which Iraq wishes to purchase, the 214ST, was originally designed for military purposes."
State Department officials wrote back, arguing, "We believe that increased American penetration of the extremely competitive civilian aircraft market would serve the United States' interests by improving our balance of trade and lessening unemployment in the aircraft industry."
Sure enough, evidence surfaced indicating that the helicopters were being employed militarily. In October l988, a Washington Post reporter, in Iraq to tour the war front, witnessed Iraqi military pilots flying the Bell 214s. He also observed other Bells lined up at three Iraqi military air bases alongside Soviet MIG jet fighters. The Reagan Administration once again did not muster a word of protest with the Iraqi government. Privately, State Department officials defended the Iraqis, claiming the helicopters were being used only to transport military officials to the front. Saddam would be in violation of his pledge only if the aircraft were used in actual combat.
The broker in that deal? Again, it was Miami's Sarkis Soghanalian.
Enormous arms sales, multimillion-dollar commissions, convoluted international deals, political intrigue - for Soghanalian these are the common ingredients of his daily business. And business has been very good to him. Besides his waterfront mansion on Hibiscus Island, he owns a 136-acre farm in Wisconsin and maintains homes in Athens, Madrid, and Paris. His business offices stretch from Miami to Geneva to Baghdad. A fleet of planes is always at his disposal to fly him anywhere in the world at a moment's notice.
Soghanalian, an Armenian born in Turkey, grew up in poverty in a suburb of Beirut. There he became involved in a growth industry that attracted many of the city's young men: gunrunning. In the l950s he worked closely with Lebanese President Camille Chamoun, and through him met Jordan's King Hussein. Soghanalian fled Beirut after he was nearly murdered for helping arm one of Lebanon's many political factions. He promptly drove a Mercedes sports car (a gift, he has said, from King Hussein) right onto a ship headed for New York. He struggled for years, working at a small garage in upstate New York while on the side arranging modest arms sales for Lebanese Christians.
Though Soghanalian declined to be interviewed for this article, in the past he has claimed that his good fortunes soared when he began working for the Central Intelligence Agency. Over the years, the devoted anti-communist would sell arms to Nicaragua's dictator Anastasio Somoza, Exocet missiles to the Argentine junta (which used them to sink a British warship during the Falklands war), rocket launchers to the Nicaraguan contras, and planes to the late Philippine dictator Ferdinand Marcos.
That Soghanalian and his various businesses have worked closely with the CIA and other U.S. intelligence agencies is beyond dispute. Two federal law enforcement officials have confirmed they were formally informed by the CIA that Soghanalian for years has served as a contract employee of the agency, although the CIA claims it has no knowledge of nor was it involved in most of the more questionable of his arms sales. And Soghanalian himself has admitted to his work on behalf of U.S. intelligence agencies. During a sworn deposition for a civil lawsuit in federal court, he was asked, "Have you ever been involved in any intelligence activities for any branch of the government of the United States of America?" Soghanalian answered, "Yes."
His lawyer, however, instructed him to provide no more details. "There is no question but this man has been involved in intelligence and counterintelligence over the years," Miami attorney Gerald Richman was quoted as saying during the deposition. "[But] that is not something that is relevant to the issues in this case and that may embarrass him and may expose him."
Other evidence of his work with U.S. intelligence officials is included in the trial record of a criminal case that developed from a federal grand jury indictment brought against Soghanalian in l981. (Prosecutors charged Soghanalian with fraud in a case involving the sale of machine guns to the small African nation of Mauritania.) After Soghanalian's attorney submitted a sealed motion describing his client's "great assistance to the United States," court records show, he was allowed to plead guilty to a single count without formally admitting culpability. Had he been tried and convicted, he could have been sentenced to fifteen years in prison or, because he is a Lebanese citizen, he could have been deported. But federal prosecutors, after negotiating the plea agreement, recommended only that he be given probation.
The federal judge who heard the case, Judge Joseph Eaton, accepted the plea and obliquely referred to sealed motions presented by both the defense and prosecution. Judge Eaton said he had come to the conclusion that it was "recognized by the government that this man is in...some part of international business, a legitimate one."
Some of those who work for Soghanalian are past employees of the Central Intelligence Agency. For example, James Cunningham, a one-time executive at Soghanalian's Pan Aviation, worked for the CIA for more than twenty years. From l966 to l974, Cunningham was vice president of the Laos division of Air America, a CIA proprietary that was later exposed as having played a key role in the agency's covert military efforts in Laos and Cambodia during the Vietnam era. In his resume, Cunningham boasted that while in the CIA he also served as a "senior administrative project officer" for a succession of "highly classified, major aviation and aerospace projects" and had assisted "the highest level political negotiations both domestic and foreign" by providing "covert aerial support."
If there is one regret in Sarkis Soghanalian's life, it appears to be the fame and renown that has come to his competitor, Saudi arms merchant Adnan Khashoggi, who assisted the Reagan Administration in its secret arms sales to the Ayatollah Khomeini. Says a business associate: "Just the mention of Khashoggi's name drives Sarkis nuts. He resents all the attention Khashoggi receives."
Gerald Richman, a former Miami congressional candidate and Soghanalian's long-time attorney, remembers having dinner with Soghanalian one night in a Paris restaurant when Khashoggi, accompanied by a beautiful young woman, arrived and sat down at a nearby table. "Khashoggi sent over a bottle of Dom Perignon," recalls Richman, "but Sarkis sent it back. And then he got up from the table and said in a loud voice, `At least I am here tonight with my wife.'"
Col. Jack Brennan, the former Nixon aide and Soghanalian business associate, recalls a later, similar episode. He, too, was dining in a Paris restaurant one night when Khashoggi's wife arrived: "There were only three of us in Sarkis's party: Sarkis, myself, and a [female companion]. He ordered an entire case of Dom Perignon and gave a bottle away to everyone at the restaurant. It was his way of telling Khashoggi, `I'm better than you.'"
The feud has at times become very public. Soghanalian boasted to one interviewer: "I don't see Khashoggi as competition. He's not a weapons technician. He throws parties and introduces people. Clients don't come to me because I'm handsome or charming." (Here Soghanalian can hardly be accused of understatement. Unlike the suave and erudite Khashoggi, Soghanalian is a rotund 300 pounds. In court testimony, he once asserted that he is so disabled by his obesity that he is "unable to walk any great distance, and in fact, need a golf cart even to walk around my offices.")
In a sworn deposition, Soghanalian testified that, unlike Khashoggi, "I go to the country, line up the troops, see what they need, and how to make military dollars go the furthest." He claimed to be a frequent visitor to battlefields, most notably during the Iran-Iraq war. It was during one such visit that he became an "Iraqi hero of the day." While touring the front, Soghanalian claimed, he stumbled across a patrol of Iranian soldiers. Fortunately he was armed, and they surrendered to him. The episode was even more extraordinary in light of the fact that it supposedly occurred during the time Soghanalian had sworn to the federal court he was confined to his golf cart.
Soghanalian's weight problem may inhibit his mobility, but it has not stopped him from amassing an impressive list of lucrative weapons deals. In l981 he brokered perhaps his largest single sale to Iraq, the previously mentioned $1.4 billion shipment of French howitzers that had the secret backing of the Reagan Administration. French officials agreed to supply the big guns, Soghanalian said during a deposition, but only if they could disguise their role. At the time, the Iranian government exerted control over the fate of several French citizens being held hostage in the Mideast, Soghanalian testified, and the Mitterand government did not want to antagonize the Ayatollah Khomeini. To accommodate the subterfuge, Soghanalian agreed to mask the real source of the arms through a series of complicated transactions known to those involved by the code name "Vulcan."
The French government agreed to pay Soghanalian and his brother, Zaven, a six-percent commission. Zaven later sued his brother, alleging that he was cheated out of his rightful commission, which he estimated to be between $48 million and $64 million.
The trial was to begin this past May. On the first day, Zaven's attorneys entered into the record the deposition of a high-level Iraqi military officer. Among other things, the Iraqi recounted that he and his fellow officers felt so close to Soghanalian they arranged a birthday party for him in Baghdad. The high point of the party came when some of the army officers - apparently in the tradition of William Tell - put apples on the heads of their female companions and tried to shoot them off. They did not use bows and arrows, however, but live ammunition from their sidearms.
On the second day of the trial, Soghanalian decided to settle the lawsuit for an undisclosed figure, and the judge agreed to seal all records of the courtroom proceedings.
Col. Jack Brennan, the ex-Marine who served as military aide to former President Richard Nixon, is a tough, blunt-talking Irishman. The morning after Nixon resigned from office, Brennan was among the select few who boarded the helicopter that whisked Nixon away from the White House. At San Clemente Brennan became Nixon's chief of staff. During those years in domestic exile, the disgraced president was still popular overseas, and Brennan, in his twelve years with Nixon, got to rub shoulders with world leaders such as Romanian dictator Nicolae Ceausescu, Egyptain President Anwar Sadat, Leonid Brezhnev, and Mao Tse-tung.
In l980 Brennan left Nixon and went to work with a friend, former Attorney General John Mitchell, who had just opened his own consulting firm, Global Research International. Mitchell could no longer work in his chosen profession, the law, because he had been disbarred after his criminal conviction for perjury and obstruction of justice during the Watergate scandal. He had not held a job in some time, having recently been released from prison after serving a nineteen-month sentence. Mitchell was Global's chairman; Brennan later became president.
In early l983, Brennan met Sarkis Soghanalian. According to Brennan, a friend from his military days approached him with a problem. The friend's new employer, Hughes Aircraft Corporation, wanted to ship some helicopters to Iraq but wasn't sure the company could get legal approval to do so. "I made some inquiries," Brennan recalls. "I talked to people at State and Commerce. The type they wanted to ship were civilian models. They would have been approved
Still, Soghanalian, a broker in the Hughes deal, credited Brennan's influential connections for having solved the problem. He set up a meeting with Brennan and boasted about his contacts around the world, including in Baghdad. "I will introduce you to a lot more business," Soghanalian told Brennan. "Come with me to Iraq and see."
Before taking up Soghanalian's offer to go to Iraq and associate with Saddam Hussein, however, Brennan says he checked with some of the "highest government officials." During a recent lunch with a reporter, Brennan was asked which officials granted that approval. He pretended at first not to hear the question. Then, smiling, he asserted that although he would not name names, those he had consulted with were the "very most senior" officials of the Reagan Administration, and added, "You couldn't go much higher than these guys." Soon thereafter Brennan accompanied Soghanalian on the first of several trips to Baghdad. Just as quickly, though, he began to have qualms with some of the business practices of his newfound acquaintance.
Not long after having secured for Soghanalian official permission to sell civilian helicopters to Iraq, Brennan says he got a call to come down to Miami to discuss another sale of Hughes helicopters to Saddam. In the presence of a Hughes executive, Soghanalian asked if it was possible for Brennan to get approval from Washington for a potential sale to Iraq of more than 100 Hughes military helicopters equipped with TOW missiles. Brennan told Soghanalian there was nothing he could do; such a sale would be illegal because of the existing arms embargo. "I told him not to do it," Brennan recalls. "I looked at them and said, `This is fucking illegal. It's against the law.' But he [Soghanalian] didn't want to hear that. So I just left the room and told them on the way out, `I don't want any part of this shit.'"
Despite such straight talk, the very next day Brennan was invited to lunch along with two executives from Hughes and a number of Iraqi military officers. As Brennan listened, they described a scheme to accomplish the sale of the Hughes combat helicopters. They would tell the State Department's Office of Munitions Control that the aircraft were meant for Kuwait. The helicopters would be based in Kuwait, but flown by Iraqi pilots and used in battle against Iran. "We own the Kuwaiti air force," one of the Iraqi military officers informed Brennan. At another point, the Iraqis told him, "We have an entire squadron in Kuwait" and routinely run military air operations out of Kuwait.
Brennan says he counseled against the deception, and thought Soghanalian and the others had abandoned the scheme. But according to federal investigators, Soghanalian, the Hughes executives, and the Iraqi military officers went ahead. When other officials at Hughes became suspicious of the large number of helicopters to be shipped to a small country like Kuwait, they contacted federal law enforcement officials, who commenced an investigation. Shortly after the inquiry began, Hughes fired the two executives involved, Carl D. Perry and William Ellis.
On December 2, l987, a Miami federal grand jury indicted Perry and Ellis, alleging they had conspired with Soghanalian to violate the Arms Export Control Act by planning to transfer to Iraq l03 of the Hughes combat helicopters fitted with TOW missiles. A second indictment charged Soghanalian for his own role, and also alleged that he had attempted to send rocket launchers to Iraq and that he had recruited two Miami-area Air Force reserve officers to travel to Baghdad in order to teach the Iraqis how to fly an American-made F-4 Phantom jet, a plane they had obtained when an Iranian pilot defected. Three years later the case has yet to come to trial, largely because U.S. intelligence agencies have been reluctant to turn over classified documents the defendants say they need to conduct their defense.
The incident involving the Phantom jet is a murky affair. According to one of the Air Force reserve officers involved, Maj. Michael Chinn, it began in early 1985, when Soghanalian approached him with a proposal: In exchange for flying an American-made F-4 during a patriotic parade, how would he like the opportunity to pilot a Soviet MIG jet fighter? For any American combat pilot, trained as Chinn had been to battle Soviet aircraft, the proposition was irresistible. There were, however, two problems. The MIG, the Phantom, and the site for the patriotic parade were in Iraq, a country in the midst of a fierce war and one with which the United States had only recently re-established diplomatic relations. Also there was the matter of Chinn's professional relationship with Soghanalian.
At that time Chinn was employed by the Federal Aviation Administration. His job was to inspect the flight operations of Pan Aviation, Soghanalian's air cargo company at Miami International Airport. During a series of interviews at his home in southwest Dade, Chinn described how he solved the problems.
The potential of any job conflict was resolved after he talked with his FAA superiors. Though Soghanalian is deeply involved in Pan Aviation's operations, the company is technically owned by his son. If the son had made the offer to go to Iraq, Chinn would have a conflict. But because the offer came from Soghanalian, FAA officials decided there would be no problem, especially in light of the fact that Chinn was not being offered any financial compensation. He received permission from his superiors to use vacation time to make the trip, planned to last eleven days.
As for the travel itself, Chinn sought advice regarding its legality. An Air Force intelligence officer assisted him in reviewing the applicable regulations, and they determined there would be no problem in going to Iraq. Further assurances were forthcoming, assurances Chinn says led him to believe his actions were sanctioned by top officials of the U.S. government.
Prior to leaving for Baghdad, Chinn recalls, he was present when Soghanalian talked by telephone to State Department official Robert Oakley about the trip. Chinn kept a contemporaneous diary, reviewed as part of this investigation, in which he wrote: "Iraq desk at State Dept. - Mr. Bob Oakley knows of my trip. In office when Sarkis talks with him & mentions trip." Oakley, who at one time was head of the State Department's Office for Combating Terrorism, is now U.S. Ambassador to Pakistan. He has refused to comment regarding the phone call from Soghanalian, but intelligence sources say he was a staunch proponent of the pro-Iraq tilt in policy being debated at that time within the Reagan Administration.
With those assurances, Chinn and a Miami-area Air Force reserve jet mechanic (who has since died) flew to Baghdad on February 5, 1985. Transportation aboard a commercial airliner was paid for by Soghanalian. Once there, Chinn says, the simple plan - fly the Phantom, fly the MIG - turned complicated and mysterious: no offers were made regarding his chance to fly a Soviet jet fighter (a staple of the Iraqi air force), there didn't seem to be any patriotic parade scheduled, and Iraqi military officials lacked the proper gear to start the Phantom.
The American plane had ended up in Saddam Hussein's arsenal by a circuitous route. More than a decade ago the U.S. had sold the Phantom to the late Shah of Iran. After the overthrow of the Shah, the Ayatollah Khomeini's forces had deployed it in the war against Iraq. A disaffected Iranian pilot deserted and flew it to Baghdad, but the Iraqis did not have pilots trained to fly Phantoms. So they turned to Sarkis Soghanalian. Soghanalian then turned to Michael Chinn.
The criminal indictment brought against Soghanalian by the federal government alleges that Chinn's mission was to make the Phantom operational, teach Iraqi pilots how to fly it, and obtain needed spare parts for its maintenance, presumably so it could be put to use in the war. Chinn, however, vehemently disputes this. Beyond flying the jet as part of a patriotic parade Saddam was supposedly staging, he says he wasn't sure exactly what he was expected to do, and besides, eleven days wouldn't have been nearly enough time to properly instruct any Iraqi pilots. In addition, he himself only got to see the Phantom four times. But in the years since the episode, he has developed a theory.
Essentially, Chinn believes he was sent to Baghdad, with his government's blessings, to gather technical information and report back to U.S. officials. Pro-Iraqi Reagan Administration officials, Chinn speculates, were interested in learning as much as possible about Iran's continuing ability to wage war against Saddam Hussein. When the Iranian pilot delivered a warplane into Iraqi hands, U.S. officials naturally would want someone to inspect it and evaluate its condition. The assumption, according to Chinn, was that Iran's lack of American-made spare parts for its aging fleet of Phantoms should mean the jet was in poor shape.
Just the opposite was true, however. Chinn says the Phantom had very recently been reconditioned and that it was, in fact, the best-looking Phantom he'd ever seen. But how could the Iranians have had access to the parts and the technicians to refurbish the jet? Chinn says he was told later by Soghanalian that Israeli mechanics had performed the work at a military installation in Syria.
Chinn's theory remains mere speculation, and Soghanalian's information about Israel's role has not been confirmed. All Chinn knows with certainty is that he couldn't get the Phantom in the air, he didn't get to fly a Soviet MIG, and when he returned to Miami, he discovered that a number of people were interested in talking to him about his trip.
Before he left for Baghdad, Chinn called a former military colleague who was then working for a defense contractor in California. Chinn says his friend, in an effort to determine the legality of such a trip, checked with specialists at his company and also contacted a California office of the FBI for advice. The reply: When Chinn returned, he should call the Miami office of the FBI. Chinn interpreted the response to mean that, as far as federal law enforcement officials were concerned, his journey was perfectly fine. When he returned, he did as he'd been advised - he called the FBI here. He met with agents and went over the details of his trip.
Chinn also informed Air Force officials that he'd just returned from Baghdad. Officers from the Air Force's intelligence and investigations divisions were dispatched by the Pentagon to debrief him in great detail, though they have since claimed they had no advance knowledge of his trip.
Prosecutors from the U.S. Attorney's Office in Miami also were interested in talking with Chinn, but not immediately. More than two years after his visit to Baghdad, he was called before a federal grand jury, where he testified that the Air Force intelligence officer to whom he'd spoken before his trip had said there was no problem with his traveling to Iraq. He also testified about the conversation with his friend in California. The two people Chinn named, sources say, also testified before the grand jury, but they denied that Chinn told them of his plans ahead of time. Whatever the case, in exchange for his testimony, Chinn was granted immunity from prosecution, and he will be a star witness for the federal government if and when Sarkis Soghanalian's criminal case ever comes before a jury. The Justice Department is thus implicitly endorsing Chinn's credibility, which could prove problematic for prosecutors. After all, Chinn claims that he witnessed Soghanalian discuss plans for the Baghdad trip with a top official of the State Department. Further, Chinn has made no secret of the fact that he greatly admires Soghanalian and would never knowingly do anything to injure him.
That sort of loyalty might be expected of a military man like Michael Chinn, but it's more difficult to explain when it comes from an important defense contractor that needs to stay in the government's good graces. Still, Hughes Aircraft executives continued to express faith and trust in Soghanalian, even after they had blown the whistle to federal authorities in 1983 about his alleged plans to violate the arms embargo against Iraq by arranging to ship military helicopters to Saddam Hussein. In l985 Hughes did not hesitate to use Soghanalian again, as a broker for the sale of 26 helicopters to Saddam.
Such a transaction required State Department approval, so Soghanalian turned again to Global Research International, the firm headed by Col. Jack Brennan and former Attorney General John Mitchell. After Iraq pledged that the helicopters would be used only for civilian purposes (despite the fact that the Hughes model in question, the 500MD, is easily converted to military use), the State Department granted approval of the sale.
Global, of course, was to be compensated for its involvement in the sale, but never was. On August 2, l985, John Mitchell wrote Soghanalian complaining that Global hadn't been paid: "Congratulations on your arranging deliveries of the...Hughes helicopters so soon after U.S. government approval for the transfer. We are pleased to learn that both the helicopters and spare parts are being delivered upon a fixed and orderly schedule.
"We are advised the...contract covers 26 helicopters at total contract price of Twenty Seven Million Four Hundred Thousand Dollars ($27,400,000) and that payments are being made...upon inspection and approval after delivery in Iraq." Mitchell went on to say that he understood Soghanalian had already received a hefty commission from the sale, and added, "Now that Pan Aviation is receiving its money..., we would appreciated your remitting to us...Global's share."
Mitchell died in December l988, never having collected his fee from Soghanalian. Records in the District of Columbia probate court show that at the time of his death Mitchell had only $157,000 in assets while leaving $141,000 in debts. Still, his heirs sued each other to determine who would oversee his estate. Why engage in legal wrangling for control of such a paltry sum? Because the estate is currently suing Soghanalian for several million dollars in commissions it is alleged to be owed from a business venture to sell military uniforms to Saddam Hussein.
The cast of characters involved in the sale includes not only Soghanalian, Brennan, and Mitchell, but also former Vice President Spiro Agnew and the late Romanian dictator Nicolae Ceausescu. The sale price was equally impressive: $181 million.
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