Mid-June, 1984: Bush Pressures Export-Import Bank to Fund Iraqi Oil Pipeline

On June 12, Charles Hill, the executive secretary to Secretary of State George Shultz, sends a confidential memo to Vice President George Bush. The memo suggests that Bush telephone William Draper, the chairman of the US Export-Import Bank, and press for the bank to agree to finance the construction of an oil pipeline from Iraq into Aqaba, Jordan (see January 14, 1984). The bank had previously refused to extend any credit to Iraq for the pipeline, holding that the war-ravaged nation could not meet the bank’s legal requirement of providing a “reasonable assurance of repayment.” Bush went to Yale with Draper; that and his position in the White House makes him an ideal person to influence Draper. Bush is to use the “talking point” prepared for him, that the loan affects the US’s vital interests, and the US’s primary goal in the Iran-Iraq War is “to bring the war to a negotiated end in which neither belligerent is dominant.” The pipeline is key to accomplishing a negotiated peace, Bush is told to argue: “At present time, Iran is the intransigent party, unwilling to negotiate in part because it believes it can win in a war of attrition. We must therefore seek a means to bolster Iraq’s ability and resolve to withstand Iranian attacks as well as to convince Iran that continuing hostilities are useless.” Bush makes the call, and Draper immediately reverses his position on financing the pipeline. Because of an inability to obtain insurance, the pipeline will never be built, but Bush’s pressuring of Draper may be his first active role in the covert US policy of supporting Iraq. [New Yorker, 11/2/1992]