TI Machine Tools

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TI Machine Tools was a British company at the centre of the Arms-to-Iraq affair. After being covertly purchased by agents of the Iraqi regime of Saddam Hussein, TI Machine Tools changed its name to Matrix Churchill. Matrix spent billions of dollars to assist Saddam's efforts in the late 1980's and early 1990's to develop chemical, biological, and nuclear weapons.

Among other things, TMG was the parent company of Matrix Churchill, a front company for Saddam Hussein's government that was at the center of efforts in the late 1980's and early 1990's to obtain material and equipment for its covert nuclear, chemical, and biological weapons programs.

"On October 23, 1987 TMG Engineering Ltd. acquired TI Machine Tools of Coventry, Britain (soon afterwards renamed Matrix Churchill Ltd.). Matrix Churchill was a leading British tool-maker, which in turn controlled several divisions and subsidiaries. TDG owned 89 percent of the shares of TMG Engineering. Four Matrix Churchill Directors, including the managing director of Matrix Churchill Ltd. Paul Henderson, controlled 11 percent of the shares under the name Echosabre. In early 1988, Admincheck, controlled by Anees Wadi and Roy Ricks, bought a small fraction of these shares. Iraq's procurement leader, Safa al Habobi was the chairman of TDG, TMG Engineering, and Matrix Churchill Ltd.

TMG also bought Matrix Churchill Corporation in the United States which had been a distribution agent for Matrix Churchill in the United States, and Newcast Foundries Ltd. in Britain which made castings for Matrix Churchill.

The Iraqi members of the boards of directors of companies in the group were in firm control of the companies' day-to-day activities and sometimes authoritarian in their actions. Both Habobi and Fadel Jawad Khadhum, a board member of several of these companies, worked for Iraqi establishments and sometimes dictated to their British and U.S. employees Iraqi desires.

Because two of Matrix Churchill's senior officials provided information to British intelligence about Iraqi activities, the British government had considerable knowledge about Iraq's secret military procurement activities.1 However, the British government decided to allow most of Matrix Churchill's sales to Iraq. As a result, a scandal erupted after the Persian Gulf War about the role of the British government in arming Iraq. This scandal reached a crisis when the government's case against Matrix Churchill officials collapsed in November 1992. The government prosecutors developed convincing evidence that Matrix Churchill officials had deliberately deceived export control officials about the true purpose of the items exported to Iraq. However, the case collapsed because the defense was able to show that the government had known the true purpose of the exports at the time and had encouraged the exports.

"In September of 1990, Customs Service agents padlocked the doors of an Iraqi front company in a Cleveland suburb and, in response to a presidential order, froze its $2 million in assets. Customs Commissioner Carol Hallett said the action against Matrix Churchill Corp. came after agents learned that Iraq, which had invaded Kuwait one month earlier, had bought the firm "for the specific purpose of illegally acquiring critical weapons technology."

"But, unknown to Customs officials, government intelligence agencies had been aware of Matrix Churchill's role in Baghdad's arms procurement network for more than a year and had warned Bush Administration policy-makers, according to newly obtained documents and sources interviewed by The Times.

"The Administration, however, allowed Matrix Churchill to continue operations, in keeping with President Bush's decision to try to influence Iraqi President Saddam Hussein through favorable policy on high-tech exports and economic incentives. Administration officials maintain that any military assistance to Iraq was an inadvertent consequence of the attempt to moderate Iraqi actions. They said that they were unaware of the extent of the network's operations in this country and that top officials were distracted by other foreign policy concerns.

"But Rep. Henry B. Gonzalez (D-Tex.), whose House Banking, Finance and Urban Affairs Committee has been investigating Matrix Churchill and the Administration's policies toward Iraq, said: "The Administration knew a great deal about Saddam Hussein's military procurement program and made a conscious decision to tolerate it, and in many cases facilitated the effort."

"As early as June, 1989, a top-secret U.S. intelligence report had identified Matrix Churchill's British parent company as a key component of the Iraqi network, according to a newly disclosed document. And two months later, Defense Department analysts discovered that the Cleveland operation had funneled tens of millions of dollars worth of U.S. technology to Iraq's nuclear weapons and ballistic missile programs, according to sources. Recently declassified State Department documents show that after Iraq's invasion of Kuwait, Administration officials calculated that the Iraqi regime spent $10 billion to $20 billion acquiring nuclear weapons and missile technology in the 1980s. Most of the buying took place through a series of front companies and shadowy agents operating in Europe, but some occurred in the United States...

"In the spring of 1989, a CIA officer approached the president of a small engineering firm in Alabama and quizzed him about a carbide-tool manufacturing facility the company was building at an Iraqi government installation southwest of Baghdad. In the fall of that year, a Customs Service agent and an Agriculture Department criminal investigator visited the firm, XYZ Options Inc. in Tuscaloosa, and posed a similar set of questions to its president, William H. Muscarella.

"In both instances, I told the government what we were doing," said Muscarella. "I gave them blueprints and told them everything about the plant. They knew everything." By the fall of 1989, U.S. authorities suspected that Iraq intended to use the plant as part of its ambitious weapons program, according to newly obtained records. Yet, while the government blocked the export of a key piece of machinery, it apparently did nothing to discourage construction of the $14-million plant by withholding export licenses for other components, which were shipped to Iraq.

"When Iraq invaded Kuwait in August, 1990, the plant was virtually complete and capable of turning out military goods as well as consumer products, according to Muscarella. "After the Gulf War, the military use was confirmed. U.N. inspectors hunting for Iraqi weapons facilities discovered the carbide factory was part of Iraq's main nuclear-weapons complex. After determining that the factory had been used in the effort to develop a bomb, the inspectors blew up the plant, U.N. documents show...

"The Times reported previously that U.S. intelligence agencies warned high-level Administration officials as early as June, 1989, that a company outside Cleveland named Matrix Churchill was a front in Iraq's worldwide arms-procurement network. However, the Administration rejected efforts to restrict sales of U.S. technology to Baghdad as late as May, 1990. The XYZ Options deal is a clear example of how the Iraqi network operated. Described as a commercial transaction, the arrangement was set up by Matrix Churchill and financed by the Atlanta branch of Italy's Banca Nazionale del Lavoro.

"ABC News Nightline opened last June 9 with words to make the heart stop. "It is becoming increasingly clear," said a grave Ted Koppel, "that George Bush, operating largely behind the scenes throughout the 1980s, initiated and supported much of the financing, intelligence, and military help that built Saddam's Iraq into the aggressive power that the United States ultimately had to destroy.

"Is this accurate? Just about every reporter following the story thinks so. Most say that the so-called Iraqgate scandal is far more significant then either Watergate or Iran-contra, both in its scope and its consequences. And all believe that, with investigations continuing, it is bound to get bigger.

"Why, then, have some of our top papers provided so little coverage? Certainly, if you watched Nightline or read the London Financial Times or the Los Angeles Times, you saw this monster grow. But if you studied the news columns of The Washington Post or, especially, The New York Times, you practically missed the whole thing. Those two papers were very slow to come to the story and, when they finally did get to it, their pieces all too frequently were boring, complicated,and short of the analysis readers required to fathom just what was going on. More to the point, they often ignored revelations by competitors.

All from [1] (ISIS)

Matrix Churchill (company number 00563431) went into liquidation in 1992.(from Companies House). Paul Henderson is now involved in Matrix Laser Group.

Name changes:

  • T I HERBERT-CHURCHILL LIMITED to
  • TI MACHINE TOOLS LIMITED to
  • MATRIX CHURCHILL LIMITED to
  • M C REALISATIONS (BIRMINGHAM) LIMITED
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