AMY GOODMAN: . We’re going to turn now to Alan Friedman, global economics correspondent to The International Herald Tribune and author of the book–The Spider’s Web, the secret history of how the White House illegally armed Iraq. We played this interview last November where he talked about the U.S. arming Iraq. We thought it would be instructive to look at that again. This is Alan Friedman.

ALAN FRIEDMAN: We need to go back to the beginning of the 1980’s to understand how the United States created the monster that Saddam Hussein is today. In the early 1980’s, remember the United States was violently against the Islamic fundamentalists of Iran, of Ayatollah Khomieni. At the time the United States, using the power of the White House with particular interest by Vice President George Herbert Walker Bush, using the intelligence services and the Pentagon, was embarked upon a tilt to Iraq. Nobody really liked Saddam Hussein. Everybody knew that he was a dictator who had gassed his own people but the United States made the decision to back Iraq in order to use Saddam Hussein as a–you know, as a cynical balance of power against Iran. The tragic result, of course, was that as the United States armed Iraq in the early 1980’s, a war continued throughout the 1980’s between Iran and Iraq, that cost the lives of more than 1 million people. What really happened then is as the 1980’s progressed, and as George Herbert Walker Bush moved from the vice presidency in the Reagan administration to the White House himself, the war in Iraq — the war between Iraq and Iran ended, and, of course, what had been created was a kind of auto pilot, if you will.

My book and my research and the work that I did at the time with people like Ted Koppel of ABC’s Nightline where we did a joint investigation and the work done at the time by William Safire in The New York Times and my own work in breaking the Iraq gate scandal showed essentially how the netherworld, the dark world of intelligence agents, arms dealers, crooked financiers that had been used in the 1980’s to get military equipment from the United States and Europe to Saddam Hussein when it was considered a good thing to do, because he was being used as a bulwark against Iran continued to function after the Iran-Iraq war ended. So, essentially, a machinery of global dimension was put in place.

Now, I discovered this at the end of the 1980’s when I was reporting for The Financial Times of London and we uncovered the scandal of more than $5 billion of American taxpayer backed credits that had been funneled by the Atlanta, Georgia branch of an Italian bank to Saddam Hussein with the full knowledge of the C.I.A. and later on of the White House, under the Bush administration. That’s because that bank, it later transpired, an Italian bank called B & L, its Atlanta, Georgia branch was being used to surreptitiously finance Saddam Hussein’s purchase of both agricultural goods and weaponry. And the very frightening part of it is that this group of intelligence agents outside the government, but working with the blessing of the government as it later turned out with the blessing of people like James Baker and George Herbert Walker Bush, this organization of arms dealers and transshipment specialists continued to sell a whole variety of equipment to Saddam Hussein, including U.S. military rocket cluster bombs that were transshipped from Pennsylvania through Chile to Iraq, nuclear and chemical weapons technology, and missile technology and the United States didn’t really do anything to stop this shipment because at the time the argument used by the C.I.A. and the White House was that if you allowed a limited amount of military weapons and technology to flow to Iraq, even though it was completely illegal against U.S. law, against international treaties, if you allowed this to happen, as an intelligence operation, the rationalization in the Bush administration went, then you could keep better track of what kind of weaponry Saddam was developing.

What really happened, of course, is that there were people along the way who were greedy, who were making money off of it, and there were people in governments in Italy and Britain and in the Thatcher government and in the Andriotti government in Italy who were working with their American counterparts and they continued the flow of equipment. Some of this is very sophisticated stuff and one of the scandals — the way the scandal was developed was I first uncovered financial documents for a British company called Matrix Churchill based in Coventry in England that was sending what seemed to be innocent machine tool equipment to Saddam Hussein. But it wasn’t. It was dual use technology that the C.I.A. and the British intelligence knew was going into Saddam’s missile program and his nuclear program, but they allowed it to happen. So, the real problem is that we had a Frankenstein monster that got out of control, a Bush administration between 1988 and “Operation Desert Storm” in 1990 1991, that essentially turned a blind eye to this continuing shipment to Iraq, and then, of course, when we had the invasion of Kuwait, and the United States under Colin Powell and Schwarzkopf went in and then President Bush decided not to finish the job, but to leave Saddam alone, unfortunately, then it became time to cover up the tilt to Iraq, to cover up the way the United States has helped to shape and build Iraq’s military strength and then ensued a traditional cover up which nobody cared about when I brought it out with Ted come in 1991, 1992, and the book, Spider’s Web, 1993, because people in America thought it was more interesting to look at Whitewater.

AMY GOODMAN: Alan Friedman speaking to us by videophone from Rome last November. Alan Friedman, global economics correspondent for The International Herald Tribune. The book is Spider’s Web, the secret history of how the White House illegally armed Iraq. You can go to our website at democracynow.org to hear the full hour interview. You can either listen to it, audio streaming or watch it video streaming at democracynow.org.