The Push To Plug Iran's Technology Pipeline

Last month, a group of federal agents seized two crates in a cavernous freight warehouse at Port of Long Beach, Calif. The cache, destined for Iran, was a $1.4 million satellite-communications system harnessed to a sophisticated Sun Microsystems Inc. computer. Three days later, law-enforcement officials swarmed the headquarters of the equipment's supplier, Satellite Technology Management Inc. in Costa Mesa, Calif., and carted off 35 boxes of documents.

A federal grand jury in Los Angeles will soon investigate whether the company falsely claimed it had an O. K. from the Commerce Dept. and, by attempting to deliver the computer, violated rules aimed at stopping nuclear proliferation. On June 2, the company said an internal investigation conducted by an independent consultant and an attorney "challenged the validity" of the government's claims. Donald Weadon Jr., the company's Washington attorney, insists that the shipment is permitted under Commerce rules.

STRICT BAN. Satellite Technology is the latest target of an accelerating U. S. drive to block exports of militarily sensitive technology to Iran. Frank W. Deliberti, director of export enforcement at the Commerce Dept., says the agency has 165 investigations of exports to Iran under way, a 700% increase from five years ago and among the most directed at a single country. Already, such activity has led to a flurry of arrests and property seizures (table).

Some cases involve the export of military gear, which is strictly banned to unfriendly nations such as Iran. But the campaign, initiated by the Bush Administration and stepped up sharply under President Clinton, also extends to such "dual-use" technologies as computers, chemical plants, and aircraft, which can be applied to civilian or military purposes.

The reason for the crackdown: increasing worries that Iran is restoring its military capability and could use its new muscle to help spread Islamic fundamentalism and anti-Western politics throughout the Middle East--and perhaps into neighboring former Soviet republics. In a May 18 speech, Martin S. Indyk, the National Security Council's senior director for Near East and South Asian affairs, warned that Iran could exceed Iraq's pre-1990 military power in five years if preventive steps are not taken. "Through its active efforts to acquire offensive weapons, Iran is seeking an ability to dominate the gulf by military means," Indyk said.

BLANKETS. The efforts to stanch the flow of goods to Iran has not been welcomed by U. S. exporters, who saw sales to Tehran soar to $747 million last year from $55 million three years ago. The aggressive new trade restrictions are expected to reverse that growth, though exports of some products with purely civilian applications still are permitted.

Early this year, for instance, Washington blocked BP-America Inc.'s proposed sale of chemical-manufacturing technology for building a $250 million acrylic-fiber plant to manufacture clothing and blankets in Iran. The Bush Administration objected to the license originally granted by Commerce because the plant would produce as a byproduct hydrogen cyanide, a lethal gas that has been used as a chemical weapon. BP-America, a subsidiary of British Petroleum Co., had modified the original project to control the output of the gas. Still, it opted not to reapply for a license to the Clinton Administration, the company says, although "it could have meant $100 million in contracts for BP and other U. S. contractors."

White House officials also are expected to deny permission for Boeing Co. and General Electric Co. to seal an estimated $740 million deal with Iran for as many as 20 Boeing 737s and their GE engines. Europe's Airbus Industrie could get the business instead. "The only effect of the policy is to put U. S. manufacturers at a competitive disadvantage," gripes Boeing spokesman Thomas M. Tripp.

As could be expected, the clampdown has driven Iran to seek equipment through clandestine procurement networks. In January, the U. S. government indicted executives at Lucach Corp. in Irvine, Calif., and Iran Business Machines in Costa Mesa on charges of attempting to ship an IBM mainframe computer to Iran through Paris. Commerce Dept. officials had denied an export license because the big computer could be used in a nuclear program. A trial of the two principals, Reza Zandian, 41, of Iran and Paris, and Charles R. Reger, 57, of Huntington Beach, Calif., is scheduled for this month. An attorney for Zandian, James C. Chalfant, denies any wrongdoing: "Evidence will show that my client never intended to send the computer to Iran without a license." Reger's attorney also maintained his client's innocence.

NOT WAVERING. In spite of Washington's persistence, Iran typically gets the technology it wants. Tehran, which claims it is merely rebuilding defenses decimated in its war with Iraq, is buying missile technology from North Korea and jet fighters from China. But it has also been a big buyer from the former Soviet Union, purchasing submarines from Russia and eight antiship cruise missiles from Ukraine. The missiles, capable of sinking aircraft carriers, have been deployed along the tanker routes in the Strait of Hormuz, according to U. S. military and intelligence sources.

Moreover, Iran already has active nuclear and chemical arms programs, asserts Yossef Bodansky, director of the Republican Task Force on Terrorism & Unconventional Warfare. A spokesman for Iran's U. N. mission in New York denied that the country is pursuing nuclear and chemical weapons.

Still, the Clinton Administration shows no signs of wavering. Such resolve may be a product of the painful lesson the government learned in Iraq. U. S. business played a major role in arming Saddam Hussein--and those weapons were used against American GIs in Operation Desert Storm. Washington is trying mightily to ensure that American military and technological prowess stays on the right side of any future battle.

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