Saddam’s first smoking gun traced to India

The shipments, valued at nearly $800,000, took place between September 1998 and February 2001. The exports—specialised supplies such as atomised aluminum powder and titanium centrifugal pumps—ostensibly went to Jordan and Dubai.

But they subsequently were traced to Iraq’s Fallujah II chlorine plant and a rocket fuel production facility at Al Mamoun, according to US and British intelligence reports.

The NEC case marks the first illicit Iraqi procurement scheme traced to a specific company since December 1998, when UN inspectors were forced to leave Baghdad. Iraq did not identify the Indian company as a supplier in the 12,000-page weapons declaration it handed to the Security Council last month.

US officials have not publicized the NEC case, in part to avoid embarrassing the Indian government.

However, Washington has imposed sanctions against the former head of NEC, Hans Raj Shiv, who allegedly led a technical team to Fallujah II in April 1999 to help install equipment that can be used to produce chemical agents.

India has suspended NEC’s export license, revoked passports of senior company officials and raided company offices and homes.

NEC’s general manager, who was jailed for four months late last year, has detailed the elaborate scheme to investigators. Further criminal charges are expected.

Although the CIA warned last October that Iraq’s recent chlorine production at Fallujah II and three other sites was ‘‘far higher’’ than any civilian needs for water treatment, the UN teams reported on Dec 9 that the chlorine plant was ‘‘currently inoperable.’’ The report did not explain why, or what, had happened to the equipment.

The Bush administration’s go-soft approach to the NEC case was evident on July 9 last year, when the State Department imposed sanctions against Hans Raj Shiv, making him the first and only person ever cited under the Iran-Iraq Arms Nonproliferation Act of 1992. Officials say he has fled his home in India and is believed to be hiding in the United Arab Emirates.

So are two of Shiv’s aides. His son, Siddhartha Hans, was based in Dubai and in charge of obtaining NEC export orders from the region. NEC’s technical director, R.C.P. Choudhary, allegedly helped ensure that the correct equipment was sent to Fallujah II. All three have been charged with violating Indian customs laws.

‘‘This is the real thing,’’ said a U.S. official familiar with the case. ‘‘These are bad guys.’’

NEC lawyers say the company has violated neither Indian law nor UN sanctions. ‘‘There is no evidence,’’ said advocate R.K. Anand. ‘‘These were all legal exports.’’ Satish Aggarwala, special senior public prosecutor in the case, disagrees. ‘‘The evidence collected so far, both incriminating documents and confession statements, is very strong,’’ he said.

S.K. Sinha, joint director of the Directorate of Revenue Intelligence, case, said expanded criminal charges will be filed against NEC and its officers after more evidence is gathered in Jordan and Dubai. ‘‘We’re at a crucial stage,’’ he said.

The case began with a tip to India from British intelligence in early 2001. ‘‘They tracked it initially,’’ said a senior Indian official. ‘‘Shipping, insurance—it’s all British. So it’s easy for them to track these things.’’

On March 26, 2001, Indian authorities raided NEC offices and company directors’ homes in New Delhi, Mumbai and Chennai, seizing purchase contracts, shipping records, customs declarations and other documents.

Six weeks later, the Directorate of Revenue Enhancement issued an alert to customs offices in every airport and harbour to stop NEC exports.

The initial investigation dragged on for more than a year. Then, authorities discovered that NEC had created a new subsidiary, Euro International Project Ltd., to purchase equipment and ‘‘to bypass’’ the customs alert, according to court records. Another front company, British Scaffolding Pvt. Ltd., was also allegedly used.

Under pressure from Washington and London, authorities cracked down last June. They suspended NEC’s export license and again raided company offices and homes. They also arrested NEC’s 46-year-old general manager, Rajiv Dhir, and imprisoned him for four months in Tihar jail. Dhir ‘‘admitted his active role’’ during a two-day interrogation, prosecution documents show.

Dhir’s lawyer, Krihan Kuman Manan, says Dhir was ‘‘tortured physically and beaten mercilessly’’ to sign a confession, a charge officials deny.

Dhir, who faces up to seven years in prison for customs violations, was released on bail in October. Although Manan insisted Dhir had left NEC and was abroad, Dhir answered the phone at NEC’s New Delhi office last week and said he was picking up his paycheck. Dhir declined repeated interview requests at his home and office.

(LA Times-Washington Post)