Carlos Cardoen

Carlos Cardoen is a Chilean businessman and arms producer, owner of Cardoen Industries. He comes from an upper-class Chilean family of Italian descent. After attending university in the U.S. and receiving a degree as a mining engineer, he returned to Santiago, Chile, after General Augusto Pinochet's 1973 coup d'état to work for the government-owned Chilean Mining Corporation. His job involved procuring explosives for mining, which became a lucrative business for him personally due to kickbacks.¹

Cardoen later resigned and became a private contractor, securing a deal to supply all blasting equipment to the Chilean Mining Corporation. He then ventured into arms brokering, though initially without success. In 1979, he applied to SIBAT, the Foreign Defense Sales Office of the Israeli Ministry of Defense, for a license to sell Israeli arms in South America. His request was denied due to his lack of experience and established political connections.¹

After being rejected by Israel, Cardoen obtained a brokering license from the ARMSCOR (South Africa's government weapons manufacturer) with the help of the Chilean ambassador to South Africa. He then secured loans from Chilean banks and began operating as an arms producer and broker.¹

By 1985, Cardoen was selling arms to Iraq, with the help of ARMSCOR and support from individuals connected to the CIA, such as Alan Sanders of ITICO. He received blueprints for cluster bombs from Sanders and, despite a United Nations arms embargo against Chile, produced these bombs with a covert U.S. license. Israel was interested in acquiring these bombs.¹

In 1985, Ari Ben-Menashe approached Alan Sanders to purchase cluster bombs for Israel, and was informed that Cardoen would sell to anyone who paid him. A few weeks later, Israel received cluster bombs from Santiago via diplomatic crate.¹

Robert Gates, then CIA deputy director for intelligence, was approached by Nachum Admoni (Mossad director) regarding U.S. support for Cardoen. Admoni expressed Israeli concerns about the support for Iraq, especially through Chile and South Africa. By this time, Cardoen owned two chemical weapons plants in Santiago, a cluster bomb factory in cooperation with Chile's military, and a third chemical weapons plant in Paraguay. He was also building a chemical weapons plant outside Baghdad.¹

Cardoen's Santiago-produced chemical weapons and those from Paraguay used artillery cups from West Germany, procured by Ihsan Barbouti. These materials were shipped to Baghdad by Iraqi Airways cargo planes. Cardoen used U.S. banks, such as the Valley National Bank of Arizona, to finance his sales and obtained raw materials for chemical manufacturing from a factory in Boca Raton, Florida. The Gamma Corporation, a CIA cut-out, sold fuses for the cluster bombs to Cardoen.¹

In late 1986, Israel expressed concern about arms shipments to Iraq, with Yitzhak Shamir threatening to go to Congress. Robert Gates called a meeting in Santiago to calm the Israelis. Attendees included Cardoen, Gates, Senator John Tower, Gen. Pieter Van Der Westhuizen (South African Military Intelligence), and Gen. Rodolfo Stange (Chilean Carabineros). At this meeting, U.S. officials made it clear they intended to maintain the arms channel to Iraq to bring Iraq into their sphere of influence, assuring Israel it would not be harmed. Cardoen continued to supply chemical weapons and cluster bombs to Iraq despite Israeli concerns.¹

In September 1988, Ari Ben-Menashe was sent to Chile to confront Cardoen. Ben-Menashe offered Cardoen a deal: Israel would license him to produce Uzis, Galil assault rifles, artillery shells, and mortars, and exclusively sell these materials throughout South America, in exchange for stopping his chemical trade with Iraq. Cardoen was given two weeks to consider the offer. During this visit, Cardoen introduced Ben-Menashe to Mark Thatcher, implying Thatcher was involved in his business.¹

Cardoen was furious about Ben-Menashe's visit to his plant in Paraguay and his attempts to stop the trade. He claimed to have the backing of the Americans and the Chilean government, and threatened Israel if they interfered. He also revealed that Gates's office provided technology directly from the CIA, and that Ihsan Barbouti was a key link in his operations. He mentioned Alan Bond and British investors as backers.¹

In February 1989, Cardoen's plant in Paraguay was not closed down, thanks to President Andres Rodriguez, who continued to rule the country with U.S. blessing. Charges were filed against Cardoen in Miami in April 1992 by the U.S. Customs Service following newspaper exposés of his involvement with Iraq.¹

Iquique and Baghdad

Cardoen's plant at Iquique turned out about a thousand cluster bombs a month with labor paid the equivalent of ninety dollars a month, and he priced them at about 7,000 dollars each, some 19,000 dollars below his European competitors. "I'll have to build Jimmy Carter a statue," he said. "If it hadn't been for the U.S. embargo we would never have invested in arms production here." His agent for Iraq, Nasser Beydoun, who later sued him for 30 million dollars in commissions, carried his offer to Baghdad: "We can provide you with our cluster bombs at the lowest possible price." The first shipment, worth 21 million dollars, reached Iraq early in 1984, and Iraq came to supply about three quarters of his arms exports of 100 million dollars a year. Two American munitions plants were classified by American officials as scrap metal so that they could be exported to Chile. His Washington representative, Lieutenant Colonel Carlos Rickertson, said: "It should have been quite evident to them that this was U.S. equipment because the placards on the bomb-making presses identified them."²

A former contractor for the CIA described Cardoen as "an all-purpose asset, designed to be one of those offshore stockpilers of military equipment who could be used by the CIA to ship arms to the Afghan rebels, to the boys in Angola, or anywhere the U.S. needed some help." Howard Teicher of the National Security Council staff said of Robert Gates: "He was tight with Casey and with the White House. He was one of those who helped get things done." An associate of Cardoen, Robert Johnson, said he saw Gates arrive at Cardoen's house near Miami in the summer of 1986: "He and Cardoen had a series of meetings in 1986 and 1987. We needed an offshore supplier, and the Chileans were very cooperative." The White House said in July 1991: "The whole story is unfounded. There never were any sales, overt or covert, to Iraq or Iran through a third country. Mr. Gates never met with Carlos Cardoen." A subcontractor of his bought 330,000 power supplies from ISC and sent them on to a proximity fuse factory near Baghdad. The British journalist Jonathan Moyle, who was inquiring into Cardoen's helicopter project, was found dead in a Santiago hotel on March 31, 1990.²