The U.S. Customs Service has seized the assets of an Ohio machine tool company that the agency charged yesterday had been bought by Iraqi officials to acquire sensitive high-technology equipment in the United States.
Customs Commissioner Carol Hallett disclosed the action yesterday against Matrix Churchill Inc., a high-tech concern with about a dozen employes in Solon, Ohio. Hallett said "Iraqi interests" had bought the firm "for the specific purpose of illegally acquiring critical weapons technology."
The action was the latest in a series of cases that Customs officials say has revealed extensive Iraqi efforts to obtain military technology and weapons in this country. Hallett also announced that Customs agents were seeking the arrest of two persons charged with illegally exporting missile system guidance components to South Africa -- a destination that agents suspect may have been used as a transfer route on the way to Iraq.
But in issuing "blocking orders" against Matrix Churchill on Monday, Customs agents did not charge the firm with export law violations. Instead, the agents were acting solely under President Bush's directive ordering the freezing of Iraqi assets in the United States, said Stephen Hartkop, assistant agent in charge of Customs' Cleveland office.
Agents sealed the company's doors and seized over $2 million in bank accounts, Hartkop said. He said the firm was a "wholly owned subsidary" of Matrix Churchill Ltd. of London, which according to press accounts is owned by another London firm, Technology and Development Group Ltd., which is an arm of Baghdad-based Al Arabi Trading.
Hartkop described the firm as a sales representative and repair facility for machine tool lathes and other equipment made by its corporate parent in London. "The main thrust of their business was to secure contracts for manufacturing equipment in Iraq."
The Cleveland Plain Dealer yesterday reported that the firm's president is Safa Habobi, a director of TDG who has been identified in the British press as a top official of Nasr State Enterprise for Mechanical Industries, a key defense firm controlled by Hussein Kemal, son-in-law of Iraqi President Saddam Hussein.
The newspaper also reported that Matrix Churchill was seeking to obtain export licenses for equipment that could be used for a fiberglass plant in Iraq. Customs officials would not disclose any details yesterday, saying some of the information was covered by a grand jury investigation.