Top officials of the Reagan administration, including then-Vice President George Bush, repeatedly intervened with the Export-Import Bank to initiate and continue credit programs with Iraq, even though the bank deemed Iraq not creditworthy, House Banking Committee Chairman Henry B. Gonzalez (D-Tex.) said yesterday.

At the time of Iraq's invasion of Kuwait in August 1990, Banking Committee sources said, Iraq owed at least $52 million on loans contracted through the bank. Iraq has defaulted on these loans and on $2 billion in credits granted by the Agriculture Department to buy U.S. farm commodities.

Gonzalez, whose committee has been investigating aspects of the Iraqi credit history for a year, named Bush, former Secretary of State George P. Shultz, current Deputy Secretary of State Lawrence S. Eagleburger and others as having several times interceded on Iraq's behalf when the Export-Import Bank dragged its feet in granting credit to the government of President Saddam Hussein.

"The policy toward Iraq is by far the most tragic foreign policy episode of the the Bush and Reagan administrations," Gonzalez said in a floor speech. ". . . It is a policy that ended in war and the loss of many precious lives -- and with no long-term goal achieved."

The U.S.-Iraq relationship began to warm in 1982, when the United States removed Iraq from its list of nations supporting terrorism, and the Saddam government became eligible for U.S. agricultural credit guarantees and other sympathetic trade treatment. Iraq at the time was two years into what became a deadly, eight-year-long war of attrition against Iran.

Gonzalez described how the Export-Import Bank, an independent government agency which encourages U.S. exports by guaranteeing loans to foreign purchasers, opened a line of credit guarantees to Iraq in 1984 after repeated urgings from Eagleburger and a phone call from Bush to Export-Import Bank board chairman William Draper.

"Ex-Im Bank could play a crucial role in our efforts in the region," said a State Department memo prepared for Bush prior to the phone call and obtained by the Banking Committee. "Early and favorable action on applications would be clear and very welcome evidence of U.S. committment to these objectives." Shortly thereafter, the Export-Import Bank opened a credit line to Iraq, Gonzalez said.

Gonzalez's remarks formed the latest in a series of recent reports on Reagan and Bush administration efforts to woo the Saddam government right up to the eve of the Persian Gulf crisis. Both administrations worked under the supposition that Iraq was a force for stability in the Middle East and a counterweight to the Islamic fundamentalist government of Iran.

During the 1980s, the United States shipped billions of dollars worth of agricultural and industrial goods to Iraq, including "dual-use" technology critical to Saddam's massive arms buildup. The Los Angeles Times reported last Sunday that the Bush administration as late as spring 1990 insisted that the Saddam government be allowed to buy dual-use equipment.

Gonzalez said the Export-Import Bank credit line enabled Iraq to buy a range of U.S. industrial products, including 250 armored ambulances, portable communications equipment, pesticides, small motors for air conditioners, medical supplies, oil equipment and heavy machinery. All of these, Gonzalez said, were "relatively small" transactions except for a $484 million credit guarantee for Bechtel Corp. equipment destined for the Aqaba oil pipeline project.

The Aqaba deal was never completed, Gonzalez noted, but he said Shultz, Eagleburger, former national security adviser Robert C. McFarlane, former attorney general Edwin Meese III and former CIA director William J. Casey at some point "contacted the Ex-Im Bank to obtain financing for the Aqaba pipeline project."

Gonzalez noted that Shultz was a Bechtel executive before joining the Reagan administration. He also said Eagleburger as a private citizen had helped the Yugoslavian LBS Bank get established in the United States. The bank had links to the Atlanta branch of Banca Nacionale de Lavoro (BNL), Iraq's principal source for agricultural credits, Gonzalez said.

In addition, Gonzalez said, Eagleburger and BNL were "instrumental" in helping facilitate imports of Yugoslavian Yugo automobiles. Gonzalez also said national security adviser Brent Scowcroft -- while working in the private sector in the 1980s -- had briefed BNL officials "for a fee."

"There is also no doubt that Mr. Eagleburger and Scowcroft continued to work on the U.S. policy toward Iraq despite their past ties to BNL," Gonzalez said.

In 1986, Gonzalez said, the Export-Import Bank suspended Iraq from its loan guarantee programs because of difficulties in collecting debts. The suspension lasted until July 1987 and was based on the bank's assessment that Iraq was slowly being strangled as a result of its war with Iran and would be unable to meet its payments schedule in the foreseeable future. "Our balance of payments projections . . . indicate that Iraq will be unable to service scheduled debt repayments over the next five years . . . ," the bank said.

Even so, Gonzalez said, the Reagan administration pressed the bank to reopen the Iraqi portfolio. In an undated 1987 memo prepared for Bush before he again telephoned the bank, the State Department suggested the vice president make the point that "although in the near term Iraq will continue to face financial stress because of the war {with Iran}, Iraq's prospects for the medium- to long-term are good . . . . Now is the time to begin building a solid trading relationship with Iraq for the future."

Export-Import Bank credit guarantees resumed in July 1987 and continued up to the Iraqi invasion of Kuwait. Banking Committee officials acknowledged, however, that the bank's exposure to Iraq at any one time could not exceed $200 million because the bank required that the "revolving" debt be paid down before additional guarantees could be provided. As a result, the bank ended up with a relatively small outstanding balance when the gulf war began.

Documents supplied by the committee also show that the bank never lost its disdain for the Iraqi credit arrangements. An undated bank memo from the 1987-88 period describes 10 "myths" about Iraq as its war with Iran wound down. Peace, the memo said, would not make Iraq a better creditor, because Baghdad "will not drastically cut military spending" or make appreciable amounts of new money from oil exports.

"Moreover, Iraq has an attitude problem regarding foreign debt," the memo said. "Iraq only fully repays creditors who offer large new loans. If creditors don't offer new loans, Iraq simply fails to pay."