Evidence of a bombs-for-oil trade between Pretoria and Iraq in the 1980s is being used to try to force Armscor out of the international arms market. Paul Stober and Eddie Koch report
AN American court has accused a former Barlow Rand company of illegally supplying Iraq with bomb technology in exchange for thousands of tons of crude oil in the 1980s. The bombs were used by Saddam Hussein’s army during the Gulf War, while the fuel was used to bust the United Nation’s oil embargo against the apartheid state.
United States prosecutors say Fuchs Electronics (Pty) Ltd, a South African electronics company controlled by Barlow in the 1980s, conspired with an American armaments corporation to supply Iraq with electronic fuses used to ignite artillery rounds and cluster bombs. According to a charge sheet lodged with a Pennsylvanian court, an American firm, International Signal and Control (ICS), set up a scheme whereby it would export fuses via South Africa to Iraq.
“As part of the … deal ISC would supply up to 300 000 FF-1 fuses to defendant Fuchs for delivery to IMEC (a firm with Iraqi links) and, in turn, would receive in excess of US$33-million, which would be paid to ISC by defendant Fuchs after it received payment from its customer, Iraq, in crude oil,” says the indictment.
“Between in or about 1985 and 1989, the defendants (ISC) would, and did, export in excess of US$4,4-million worth of fuse power supplies to Darlon in the RSA on behalf of defendant Fuchs to maintain defendant Fuchs’ production line of fuses and to assist Fuchs fulfil its fuse production requirements with Iraq.”
It has long been known that Barlow affiliates and Armscor collaborated with the US-based ISC to supply Hussein’s government with hi-tech war materiel in defiance of American arms export regulations. However, this is the first evidence that the trade involved a bombs-for-oil swop designed to circumvent the international oil embargo against Pretoria in the 1980s.
American prosecutors are determined to convict ISC, Armscor, Fuchs and a number of these companies’ directors for violating the arms embargo against Iraq and South Africa.
According to sources involved in other illicit deals with Armscor in the 1980s, the South African parastatal is trying to set up an out- of-court deal with the American prosecutors. The company is reported to be willing to pay large fines so that its officials do not have to make humiliating court appearances in the US.
The sources say the Americans are refusing to accept the proposed settlement because they want to force Armscor out of the lucrative international arms market, thereby getting rid of a competitor and a potential source of arms proliferation in the Third World.
Armscor refused to comment on the allegations. It did, however, confirm that the company was involved in an arms case in the US and was involved in “sensitive negotiations with the US government”.
A Barlow spokesman insisted there was no present relationship between Fuchs and the corporation, and said they had no knowledge of the case.
The court hearing, to be held in a US district court in Pennsylvania, is the culmination of years of investigation by American federal investigators into a multibillion dollar set of deals and arms syndicates that revolved around ISC and its director, James Guerin.
Detectives and law-enforcement officers have been probing evidence that Armscor and Barlow affiliates received illegal shipments of electronic equipment used for ballistic missiles, artillery shells and cluster bombs from ISC and then passed these on to Iraq.
The American firm is accused of using its South African connections as a conduit for sending illicit consignments of ballistic missile equipment, as well as cluster bomb technology developed in Chile, to Iraq.
“Do you remember watching the anti-aircraft bursts from Baghdad on CNN — the first of the Allied bombing in that country. Well, that was some of the stuff which got into Iraq through ISC shipments to South Africa,” a federal investigator is quoted as saying.
Shipments from ISC indirectly helped Iraq build a cluster-bomb factory. Most of this equipment was manufactured by a Chilean firm, Cardoen. ISC brokered deals which ensured that parts were sent from Chile to South Africa and were then shipped on to Iraq.