Of Cluster Bombs and Kiwis

By Michael S. Serrill

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 ((Khomeini))."

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."

With reporting by Raul Sohr/Santiago