TIME: Almanac 1993/TIME Almanac 1993.iso/time/121090/1210202.000

Text File | 1992-08-28 | 5.8 KB | 126 lines

                                                                                BUSINESS, Page 71

Of Cluster Bombs and Kiwis


Meet one of Saddam's favorite arms dealers: Carlos Cardoen

By MICHAEL S. SERRILL -- Reported by Raul Sohr/Santiago


    When war broke out between Iraq and Iran in 1980, Carlos
Cardoen, a small-scale Chilean arms manufacturer, was quick off
the mark: he flew to Baghdad in search of a deal. Because he
had no contacts in the Iraqi government, "nobody would even see
me," he recalls. "So I just left my brochures and went home."

    The brochures apparently made the sale for him. Sometime
later, Cardoen was contacted by Iraqi army officers, who were
interested in one of the weapons listed in his sales kit: the
cluster bomb, a destructive antipersonnel device that scatters
tiny bomblets over a wide area. The weapon was ideal for Iraq's
relatively unskilled air force, especially after Iran began
attacking Iraqi positions with human waves of fanatical young
fighters.

    Since the early 1980s, Cardoen has sold Iraq thousands of
cluster bombs and other explosives, as well as such
weapons-related technology as computer-operated metal lathes.
Iraq in turn has helped make Cardoen, 48, one of the richest
men in Chile; his firm, Cardoen Industries, has grossed $400
million from the cluster bombs alone. No wonder that until
recently, Cardoen kept President Saddam Hussein's portrait
hanging in a place of honor in his Santiago factory.

    Cardoen makes no apologies for helping arm Iraqi soldiers,
even though the cluster-bomb factory he built on the outskirts
of Baghdad is no doubt spitting out weapons that might be used
against the multinational alliance arrayed against Saddam in
the Persian Gulf. Cardoen rationalizes his position by
explaining that he began selling Saddam arms "when Iraq was
considered a friend of the West who was fighting the Ayatullah


    Because of Iraq's invasion of Kuwait, Cardoen stands to lose
millions. Since Chile is honoring the embargo against Baghdad,
he was forced to cut off his lucrative contracts, the latest
of which was for a $60 million plant in Iraq designed to
produce fuses for bombs, artillery shells and rockets. The 31
Cardoen engineers who were working on the project have returned
to Chile; it is not clear when, if ever, Cardoen will be paid.
Cardoen also suffered a blow when U.S. officials refused to
certify as airworthy his military adaptation of the Bell 206
helicopter, a move he attributes to "political reasons."

    No one who knows the shrewd and innovative Chilean
entrepreneur, however, expects the loss of the Iraqi account
to set him back for long. With a Ph.D. in metallurgical
engineering from the University of Utah, Cardoen first worked
in the U.S. and Chile as a mining engineer. He founded the
company that bears his name in 1977, after Chile's former
President, General Augusto Pinochet, whose repressive government
was the object of an international arms-sales boycott, asked
local companies to fill the gap. Though arms manufacture has
been Cardoen's main business ever since, he also deals in
industrial explosives, real estate, cattle, rental cars and
aircraft. He owns a small publishing house and a large
kiwifruit orchard. He is nothing if not flexible in his
dealings: Saddam paid for some of his weapons with oil, which
Cardoen sold on the spot market.

    Having built his business by catering to the needs of
renegade regimes like Chile's and Iraq's, Cardoen has no qualms
about dealing with other pariahs. He has helped South African
arms companies circumvent a global embargo by putting MADE IN
CHILE labels on some of their weapons as part of co-production
deals. His most recent customer for cluster bombs has been the
repressive regime of Mengistu Haile Mariam in Ethiopia. In
September 1989 Cardoen received his government's permission to
sell Ethiopia up to 1,658 of the devices, at $7,000 apiece; the
bombs have reportedly been used against civilians in separatist
Eritrea.

    The Ethiopian deal was arranged, Cardoen says, through
"third parties," whom he does not name but who have been
identified by one of his employees as Israelis. Rumors have
been circulating for months in Washington and the Middle East
that Israel provided cluster bombs and other military aid to
Mengistu in exchange for exit visas for Ethiopian Jews.
Jerusalem, however, vehemently denies any involvement in
Cardoen's Ethiopian deal.

    The Chilean's latest venture has alarmed his country's
neighbors. He admits that he is experimenting with fuel-air
explosive bombs, which release and then detonate a vapor cloud
of fuel. The F.A.E. has been called the "poor man's atom bomb"
because of the powerful explosion it generates. After it became
known that Cardoen had helped arrange an F.A.E. test in the
Atacama Desert in northern Chile three months ago, protesters
in Bolivia, Peru and Argentina charged that Chile's production
of such a terrifying weapon could set off a regional arms race.

    The F.A.E. controversy raised new calls by critics in Chile
for a government crackdown on Cardoen's operations. The Defense
Ministry has stopped the sale of weaponry to Ethiopia but has
taken no other action. "Our arms-control law is designed to
cover domestic weapons use," says Defense Minister Patricio
Rojas. "It doesn't cover Chilean arms exports." The fact is
that Cardoen and the post-Pinochet government are quite
comfortable with each other. Cardoen contributed $1 million to
President Patricio Aylwin's election campaign last year and
large sums to several important congressional candidates.

    Whatever the criticism, Cardoen takes a hard-nosed view of
his business dealings. "I don't know of any good weapons," he
once told an interviewer. "The weapons shouldn't exist. The
problem is the human beings who use them."