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April 25, 1991 CONGRESSIONAL RECORD HOUSE H 2551 and is in arrears on Eximbank programs. Yugoslavia is evidently such a country. Staff at the Bank stated that Mr. Macomber speaks to Mr. Eagleburger often, sometimes as often as two or three times a day. They also indicated that the topic of discussion between the two is sometimes Yugoslavia. Mr. Macomber has stated that although he has frequent chats with Mr. Eagleburger, the topic of Yugoslavia has never been broached. This seems highly unlikely given Mr. Eagleburger’s position, his obvious interest in Yugoslavia and the importance placed on the Eximbank program in Yugoslavia. It would seem reasonable that Mr. Eagleburger would inquire about Yugoslavia’s status at Eximbank, but according to Mr. Macomber this has not been the case. What is clear is that Yugoslavia is receiving special treatment from Eximbank. At this time the Committee does not know why. EXIMBANK PLAYING GREATER FOREIGN POLICY ROLE Considering the Administration proposal to allow Eximbank to finance $1 billion in military sales, and to open up a $300 million Eximbank program with the Soviet Union, the trend toward using Eximbank as a foreign policy tool is clear. This is a disturbing trend. The Eximbank was created to assist U.S. exporters. It was not created to be a major foreign policy tool. Rest assured, in order to protect the taxpayer investment in the Eximbank, the Banking Committee will continue to fight to maintain the commercial export promotion function of the Eximbank. BRENT SCOWCROFT Another Kissinger Associates alumni is Brent Scowcroft, a career Air Force officer and a specialist in Slavic languages and history, who has held various positions in six administrations. Early in his military career, Scowcroft served 1 year as the air attache at the United States embassy in Belgrade, Yugoslavia. After earning a Ph.D. and working in academia from 1962 to 1968, he held a succession of national security posts in the Department of Defense. In 1971, President Nixon appointed Scowcroft Military Aide to the President and in 1973, Kissinger chose him to be Deputy Assistant to the President for National Security Affairs. Scowcroft often took charge of the National Security Council while Kissinger was fulfilling his duties as Secretary of State, and in 1975 succeeded Kissinger as National Security Adviser under President Ford. Although he resigned the position during the Carter administration, Scowcroft stayed active as a member of the President’s general Advisory Committee on Arms Control. In 1982, Scowcroft joined Kissinger in setting up Kissinger Associates. Scowcroft served as vice chairman until regaining his position as National Security Adviser to President Bush in January 1989. During his tenure at Kissinger Associates, President Reagan appointed Scowcroft to various special commissions on defense issues and often sought his advice in national securty matters. SCOWCROFT OWNS STOCIL IN 40 COMPANIES WHILE NSC DIRECTOR Mr. Scowcroft’s financial disclosure forms indicate that up until October 4, 1990, he owned stock in 40 companies. Several of the companies, like Lockheed and General Fl.ectric, are among the Nation’s largest defense contractors. Other companies include multinationals like General Motors, ITT, Westinghouse, AT&T, Mobil Oil, Du Pont, Xerox, and Hewlett-Packard. Some of these companies are also defense contractors, but all routinely must obtain export licenses as a part of their international business operations. The NSC has considerable sway over the export licensing process. To this day he still owns stock in many of those companies. Mr. Scowcroft’s stock holdings are most startling since the actions of the NSC, whether related to the export licensing process or U.S. security policy, could have an influence on those companies. NSC FLAS CONSIDERABLE SWAY OVER EXPORT LICENSING As I stated earlier, when George Bush took over as President, he issued a national security directive ordering improved relations with Iraq. The President, with the advice and consent of his senior advisers, including Mr. Eagleburger and Mr. Scowcroft, determined that the best way to improve relations with Iraq was through expanded trade. This policy was little different from that pursued during the Reagan administration. The NSC has direct responsibility carrying out the President’s national security directives. In the case of export licensing, the National Security Act of 1947, and subsequent legislation provided the President, through the National Security Council INCSl, with ample authority to establish policies on export controls. To get a feel for the export licensing role of the NSC during the ReaganBush administrations, just look at the comments of Paul Freedenberg. He was the chief export licensing official at the Commerce Department during the latter half of the Reagan years and the beginning of the Bush administration. He recently testified that Iraqi , use of poison gas against its own Kurds and the Iranians did not suppress the zeal of the NSC to approve technology transfer to Iraq. In testimony before Congress, Freedenberg stated: In the summer of 1988, a number of licenses were pending with regard to technology transfer to Iraq. I asked for official guidance with regard to what the licensing policy would be toward Iraq since by that time there was credible evidence of the use of poison gas by the Iraqis against their own people and also against the Iranians. I suggested that the imposition of foreign policy controls be considered as a way of justifying the denial of export licenses to Iraq. I was told by the National Security Council that the licensing policy with regard to Iraq was that of normal trade and that under normal circumstances I should clear the licenses that were pending. I passed that information on to my licensing officers and the few dozen licenses that were pending at that time were approved and licenses were issued for exports to Iraq. This provides clear insight into the power the NSC can exercise over the export licensing process. I would also like to include in the RECORD an article from the February 25, 1991, issue of Legal Times. This article gives the reader a good overview of Mr. Scowcroft’s and Mr. Eagleburger’s role in promoting military sales. The article illustrates that an environment existed that could make it possible for Iraq to obtain sophisticated U.S. technology to upgrade its military capability. The truth about the export licensing process is that the NSC and the State Department ignored or actually encouraged the transfer of militarily useful technology to Iraq in violation of its public oath to prohibit such uses. Regarding the question of whether or not the companies that Mr. Scowcroft owned stock in benefited from the United States policy toward Iraq, I can reveal one fact: Together, those companies received over 100 out of the total 800 U.S. export licenses for sales to Iraq. NAMES CANNOT BE RELEASED Unfortunately, the names of the companies cannot be released at this time. The administration has stated that the list of export licenses for Iraq must be kept secret because of the supposed “proprietary” information it contains. Maybe the real reason for the secrecy stance is that the administration is embarrassed by the list because it symbolizes the abysmal failure of the trade-based approach to foreign policy. KISSINGER ASSOCIATES AND THE GENERAL MOTORS-VOLVO TRUCK PLANT IN IRAQ The following is an interesting story involving General Motors and Volvo and their link to Mr. Eagleburger and Mr. Scowcroft and BNL, and illustrates the odd triangle linking foreign policy toward Iraq, and BNL’s role in financing itnot to mention the role of Kissinger Associates. Volvo was a client of Kissinger Associates and the chairman of Volvo, Pehr Gyllenhammar, was on the Kissinger Associates board of directors with Mr. Eagleburger and Mr. Scowcroft. Mr. Scowcroft owned stock in General Motors until at least October 4, 1990. Mr. Scowcroft’s and Mr. Eagleburger’s jobs placed them in a position of considerable influence over United States-Iraq trade. Both were responsi THE TEXAS OBSERVER 11