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                                                                                MIDDLE EAST, Page 49

Just Keep On Trucking


Jordan has turned a blind eye to illicit trade that helps Iraq's
dictator survive, but U.S. pressure is beginning to work

By DEAN FISCHER/AMMAN


    The transaction is perfectly blatant. A Jordanian customs
official is bribed, illegal cargo is substituted for food and
medicine, a false manifest is prepared, and the truck heads for
the Iraqi border. At the Jordanian customs post, the truck,
sealed with a lock and a bit of wire, is not examined, the
customs inspector stamps the false manifest, and the driver
heads for Baghdad. Boasts police major Ahmed Omari as he waves
through a van of vegetable oil: "Not a single truck has carried
smuggled goods into Iraq." But thanks to Iraqi payoffs lavished
on Jordanian government officials, thousands of tons of
U.N.-embargoed communications gear, construction parts, military
equipment and computers enter Iraq from Jordan to help prop up
Saddam Hussein's regime.

    Coming the other way, legally, a half-mile-long column of
oil tankers stream beneath a giant portrait of Saddam that
marks an archway over the desert border. Each day they bring
50,000 bbl. of cut-rate fuel to Amman to sustain the stumbling
economy of Jordan.

    Jordan's involvement in the smuggling is illicit, but
greed inspired a willingness to brave the consequences of
violating the U.N. strictures imposed after the gulf war. Until
a few weeks ago, truck convoys from Jordan transported 6,000
tons of goods a day into Iraq, but only about 70% were the food
and medicine permitted by the U.N. The remainder, say U.S.
intelligence officials, consisted of materials Saddam has used
to rebuild the infrastructure damaged by allied bombs.

    Washington decided to crack down last month. CIA Director
Robert Gates visited King Hussein at his Aqaba retreat on the
Red Sea to remind him of his responsibilities. It was an
appropriate venue for the mission; the bulk of the illegal
cargoes that are eventually trucked into Iraq enter Jordan via
ships docking at Aqaba. Confronted with the CIA'S evidence of
cross-border smuggling, however, Hussein has finally ordered
officials to stop the trade. Truck traffic from Jordan to Iraq
has since declined by a third. In Amman last week, Secretary of
State James Baker acknowledged a "reduced leakage of goods
across the Jordanian-Iraqi border."

    But the overall ineffectiveness of the embargo has enabled
Saddam to restore communications and electrical services and
repair damage to bridges and government buildings. U.S.
diplomats believe the ease with which Iraq has circumvented the
sanctions has encouraged Saddam to increase his defiance of U.N.
demands.

    Before King Hussein tightened oversight, U.S. intelligence
analysts estimate, from 35 to 50 companies in Amman handled the
business, many of them Iraqi fronts established after Saddam's
invasion of Kuwait two years ago. Al-Bawadi Co., for example,
an Amman importer of European goods, has been identified by
Western intelligence as the creation of Saddam's half brother
Ibrahim al-Tikriti, who directs Iraq's internal security.
Arabco, which deals in military equipment, was also identified
by Western intelligence as a firm run by Saddam's son-in-law
Hussein Kamel. With an estimated $30 billion stashed in foreign
banks, Saddam has plenty of funds to bribe Jordanian officials
and purchase goods abroad, including luxury items to buy the
continued loyalty of military and security officers in Baghdad.
His agents forge export licenses, issue phony letters of credit
for the front companies, and pay shipment costs to Aqaba's free
port. There cargoes supposedly destined for Jordanian companies
are loaded onto trucks bound for Iraq. "Saddam is willing to pay
a high price," says Jawad Anani, former Jordanian Trade
Minister, "and plenty of people here were willing to take high
risks in return for the promise of hefty profits." Basil
Jardeneh, Jordan's Finance Minister, acknowledged the existence
of the front companies, but he insists that "there is nothing
in the U.N. sanctions barring financial transactions involving
such firms."

    Jordanian officials feel unfairly squeezed by Washington.
Last year, when Baker urged Taher al-Masri, then Jordan's Prime
Minister, to comply with the embargo, he responded, "If you want
me to reduce trade with Iraq, then open the gulf states to trade
with us." Jordan's economy has been badly hurt by the
punishment meted out by the desert kingdoms for King Hussein's
support of Saddam in the war. Echoing widespread sentiments in
Amman, Minister of Information Mahmoud al-Sherif complains that
the volume of smuggling from Turkey and Syria is much greater
than that from Jordan, a judgment the U.S. rejects.

    The measures Hussein has taken come too late to prevent
Saddam from rebuilding his country. Jordan's belated bow to U.S.
pressure reflects the monarch's sensitivity to the threat of
Western political and economic retaliation. But he also
calculates that Saddam could outlast George Bush. As long as he
retains power, the Iraqi dictator is a potential menace to
regional stability -- nowhere more so than in Jordan. "Smuggling
in this country is an industry," concedes Finance Minister
Jardeneh. Many Jordanians have come to view it also as a
necessary form of insurance to placate the bully next door.