The Central Intelligence Agency has been secretly supplying Iraq with detailed intelligence, including data from sensitive U.S. satellite reconnaissance photography, to assist Iraqi bombing raids on Iran's oil terminals and power plants in the war between the two nations, according to informed sources.
The information has been flowing to Iraq for nearly two years. During the same period, the Reagan administration was secretly selling arms to Iran in an effort to free the American hostages in Lebanon and gain influence with factions in the Iranian government.
In August, the CIA stepped up the initiative with Iraq by establishing a direct, top-secret Washington-Baghdad link to provide the Iraqis with better and more timely satellite information. One source with firsthand knowledge said the Iraqis receive the information from satellite photos "several hours" after a bombing raid in order to assess damage and plan the next attack. This source said the intelligence information is "vital" to Iraq's conduct of the war.
CIA Director William J. Casey met twice this fall -- once in October and again in November -- with senior Iraqi officials to make sure the new channel was functioning and to encourage more attacks on Iranian installations, the sources said.
Iraq has mounted a series of precision air attacks against Iran in recent months, concentrating on oil terminals, oil pumping stations and power plants -- all with the intent of destroying Iran's economy and its ability to continue the war, which entered its seventh year this fall.
The revelation that the administration has been sharing intelligence data with the Iraqis at the same time that it was shipping arms to the Iranians raises new questions about the administration's policy on the Persian Gulf war.
One well-placed U.S. government official said that the administration policy of arms for Iran and satellite intelligence for Iraq was "a cynical attempt to engineer a stalemate" in the war.
An administration official said yesterday that any intelligence assistance to Iraq was for "defensive" purposes, designed to keep either side from winning or losing the war.
White House spokesman Daniel Howard said yesterday there would be no comment on this report. "We don't comment on intelligence matters," he said.
On Nov. 13, in his first detailed public statement on the Iranian affair, President Reagan said one of the key goals of his Iranian initiative was "to bring an honorable end to the bloody six-year war between Iran and Iraq." Denying a "tilt" in U.S. policy, Reagan said his administration did not favor or support "one side over the other."
Since the secret U.S.-Iranian arms deal was disclosed in early November, Iraq has stepped up its attacks. On Nov. 25, Iraqi warplanes bombed Iranian oil tankers at Larak Island, which is about 750 miles south of Iraq and in the Strait of Hormuz. This was apparently the greatest distance flown by Iraqi planes in any raid during the war. On Dec. 5 the warplanes bombed Iran's Neka power station, which is located close to Iran's Soviet border.
On Saturday, Iraqi radio reported that its warplanes attacked Tehran for the first time in seven months, striking an antiaircraft defense system and a power plant, and in a separate raid hit troop concentrations and ammunition depots in northwestern Iran.
Intelligence estimates show that Iraq overall has at least a 4-to-1 advantage in the major types of military equipment including tanks, missiles, and combat aircraft. Iraq also has about 1 million regular ground troops compared with 250,000 regulars for Iran.
Nonetheless, Iran's population is roughly three times Iraq's. The Iranians have used "human waves" of young, irregular soldiers in the war, which has claimed about 1 million dead, wounded or captured.
An administration official said that Iraq had been discouraged from any attempt to destroy Iran's economy. The officials said, for example, that the United States had tried last year to apply diplomatic pressure on Iraq not to wipe out Iran's Kharg Island oil terminal.
Several years ago, the terminal handled 90 percent of Iran's oil; now it moves less than 50 percent.
In his Nov. 13 speech, Reagan said the administration opposed the violence of the Iran-Iraq conflict. "The slaughter on both sides has been enormous, and the adverse economic and political consequences for that vital region of the world have been growing," Reagan said. "We sought to establish communications with both sides in that senseless struggle, so that we could assist in bringing about a cease-fire and, eventually, a settlement. We have sought to be evenhanded by working with both sides . . . . We have consistently condemned the violence on both sides."
Sources said that as far back as 1984, when some people feared that Iran might overrun Iraq, the United States began supplying Iraq with some intelligence assistance. Iraq reportedly used the intelligence to calibrate attacks with mustard gas on Iranian ground troops, distressing U.S. officials, who condemn chemical warfare.
But the sources said the information from U.S. satellites was not supplied regularly until sometime in early 1985. For the next 18 months the information was supplied through Washington channels as needed by the Iraqis, particularly after an Iraqi bombing raid.
It could not be established yesterday in what form the Iraqis initially received the intelligence data. Officials said it could have been actual intelligence satellite photos, or simply selected portions, artists' drawings done from the photos or detailed verbal descriptions. The direct Washington-Baghdad link, established in August, was accomplished by way of a special intelligence unit in the U.S. Embassy in Baghdad, one source said. Two sources said that the Iraqis now receive selected portions of the actual photos that are taken by U.S. reconnaissance satellites and on some occasions, U.S. reconnaissance aircraft.
In mid-August, just after the direct channel was installed, Iraq executed a surprise bombing raid against the Iranian oil terminal at Sirri Island that Iran supposedly thought was safe from attack. The direct link with Baghdad apparently was set up shortly after the release of the Rev. Lawrence Martin Jenco from Lebanon and the third U.S. shipment of arms to Iran.
Sources said that in early October, Casey requested a meeting with Iraqi Foreign Minister Tariq Aziz, who was at the United Nations in New York. A few days later, the sources said, Casey's request was granted and he met Aziz and Iraq's ambassador to the United States, Nizar Hamdoon. Casey, who was aware of the still-secret Iranian arms dealings, told the two Iraqis he wanted to make sure that they were happy with the flow of intelligence, and he also encouraged more attacks on economic targets, the sources said.
Later in October, the United States sent a fourth shipment of arms to Iran, and on Nov. 2, hostage David P. Jacobsen was released. The next day, a pro-Syrian Lebanese magazine disclosed the secret U.S.-Iran initiative.
After the disclosure, Ambassador Hamdoon requested and received another meeting with Casey. The two met in Washington about two weeks ago, the sources said, and Casey had no apology to offer for the Iran initiative but pledged that the secret channel for satellite data would remain open to Iraq.
Staff researcher Barbara Feinman contributed to this report.