- The Washington Times - Thursday, March 6, 2003

LONDON, March 6 (UPI) — Britain secretly - behind America's back — helped Iraq develop a chemical plant that Washington says is a key component in the Arab nation's chemical weapons program, the Guardian newspaper reported Thursday.

Top British politicians knew the nearly $22.5 million plan — Falluja 2 - was likely to be used to make mustard and nerve gas, the Guardian cited documents as saying.

The go-ahead for the plan came despite written records by top British officials who noted that Iraqi leader Saddam Hussein was gassing his opponents and that there was "strong possibility" the chlorine plant would be used to make mustard gas. Ministers in the Thatcher government, a key U.S. ally, gave secret financial support through insurance guarantees to Uhde Ltd., the British subsidiary of the German firm involved in the deal.

"Paul Channon, then trade minister, concealed the existence of the chlorine plant contract from the U.S. administration, which was pressing for controls on such exports," the Guardian said. "He also instructed the export credit guarantee department to keep details of the deal secret from the public."

It said Channon's decision came despite strong pleas from a Foreign Office minister and the country Ministry of Defense.

"A ban (on the project) would do our other trade prospects in Iraq no good," Channon said.

Uhde's parent company in Dortmund, Germany, confirmed to the newspaper its British subsidiary had built the plant for the State Enterprise for Pesticide Production, Iraq's chemical weapons procurement agency.

"This was a normal plant for the production of chlorine and caustic soda," a spokesman said. "It could not produce other products."

Channon issued a statement through his secretary, who said: "He can't object to the story. So he's got no comment."

The Falluja 2 chlorine plant, 50 miles outside Baghdad, was pinpointed to the U.N. Security Council in U.S. Secretary of State Colin Powell's list of reasons why force was needed to disarm Iraq. The CIA has said the plant is a chemical weapons site.

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