A Matter of Honor

By John Greenwald

Nothing in Marianne Gasior's quiet life prepared her for the ordeal she has undergone in the past three years. The petite former attorney for Kennametal Inc., a Pennsylvania machine-tool maker, says she has been harassed, followed and even run off the road since she accused the company of illegally shipping metal-working equipment with military uses to Iraq. But Gasior has persisted in her whistle-blowing ways. She has now amassed evidence that, she says, threatens to expose the misdeeds of American companies as well as a vast Bush Administration cover-up of how scores of firms, some using U.S.-backed loans, helped build Saddam Hussein's war machine and even sold him materials he desperately needed to make a nuclear bomb.

After years of lonely spadework, Gasior is finally getting some respect. Two powerful Democratic Congressmen, Jack Brooks of Texas and Charlie Rose of North Carolina, took her findings to the White House and Attorney General Janet Reno last month. Their goal: to press for a re-examination of U.S. business ties to Iraq and the role of the Justice Department in a possible cover-up. Last week at a Washington reception, the Cavallo Foundation honored Gasior with a $10,000 award for her "moral courage" and for her efforts to ! expose wrongdoing. Said Rose at the ceremony: "She is remarkable and courageous, and without her, much of what we know could not have been learned."

Gasior's evidence, which she claims shows a concerted government effort to suppress information about just how much U.S.-made war materiel ended up illegally in Saddam Hussein's hands, could help crack the murky scandal known as Iraqgate that dogged George Bush's final months in office. Questions still swirl around the role that Washington and a number of U.S. companies played in supplying Saddam's $100 billion worldwide military shopping spree that led up to his invasion of Kuwait.

At the heart of the scandal stands the outfit that financed a large portion of it: the Atlanta branch of Italy's Banca Nazionale del Lavoro, which extended $5.5 billion in loans to finance Saddam's military procurement network in the U.S. Critics charge that the Bush Administration, which was eager to support Iraq as a counterweight to Iran, and was even more eager to assure itself access to oil at cheap prices, turned a blind eye to BNL's activities and allowed missile and nuclear technology that helped Iraq's missile and nuclear development to slip out of the country.

Gasior, 31, stumbled into the hothouse world of Iraqi trade after joining Kennametal, a Fortune 500 company, at its Latrobe, Pennsylvania, headquarters near Pittsburgh in 1989. Gasior became alarmed when she discovered that a shipment of carbide metal-working tools to Baghdad -- tools that could be used to cut uranium -- might be illegal. She also learned of Kennametal sales to Matrix Churchill, Iraq's main U.S. purchasing agent, which was gathering materiel for projects like the infamous Supergun. She says she warned company officers that Kennametal was not following export regulations, and questioned other company practices. Within nine months of being hired, she was asked by her superiors to resign for being "uncooperative." Unable to find a new job, Gasior moved back into her parents' suburban Pittsburgh home.

By the time Iraq stunned the world with its invasion of Kuwait, Gasior was about ready to blow the whistle on her former employer. She had read about the BNL scandal and remembered a transaction at Kennametal that involved carbide tools and a BNL letter of credit. Appalled at the thought that U.S. companies had helped provide Saddam with the equipment to wage war, Gasior and another Kennametal employee took their suspicions to Justice officials in Philadelphia % in December 1990. "They listened carefully until we got to the part about the BNL letter of credit," Gasior says. "Then they stood up, thanked us for coming in, said they would look into it, and ushered us out the door. They didn't even look at the documents we brought."

While the authorities seemingly ignored Gasior, she was not forgotten. She says a few days after her Justice Department interview, cars mysteriously started following her. One night a car that had been shadowing her forced her off the road. The same vehicle pursued her in a wheel-screeching, hilltop chase until she got away by shutting off her lights. Then there were the constant phone calls to her home from someone who only breathed over the line, and a false newspaper report that an arrest warrant had been issued in her name. She began to fear for her life. "It was as if we were living in the Soviet Union," she recalls. "My parents couldn't believe this was happening."

At the height of her distress, Gasior found a sympathetic ear in Congress. Struck by her story, Rose, who had been tracking BNL, asked her to testify before his subcommittee. "Marianne is a very brave lady," Rose says, "who had far too large a conscience to work in corporate America and too much conscience, for sure, to work for Kennametal."

While Gasior's testimony in August 1991 received wide media coverage, there still was little follow-up. She was, however, invited to testify before an Atlanta grand jury. From Gasior's point of view, her second experience with the Justice Department was a disaster. She insists that the prosecutor was aggressively hostile and refused to listen to her story. Soon after her appearance, the U.S. Attorney's office in Atlanta sent a letter to Kennametal stating that the grand jury found the company blameless.

Gasior returned home determined to expose not just Kennametal but everyone connected with the military supply of Iraq. For the next year and a half, operating from her dining-room table, she collected documents and evidence. Those documents include internal memorandums from the Justice Department that could prove one of the key allegations of the Iraqgate scandal: that Justice tried to bottle up the investigation. "The issues go beyond Iraqgate," she insists. "Top people in the Justice Department and the Department of Agriculture obstructed justice in this case for political reasons, and they are still there."

Kennametal, meanwhile, has sued Gasior for violating her severance agreement by accusing the company of harassment. The case is scheduled for trial in Latrobe next month. Kennametal continues to insist that its letter from Justice clears the company of all wrongdoing in connection with exports to Iraq, and denies any role in harassing Gasior.

Gasior, however, has finally managed to bring her evidence to the attention of the highest authorities. Rose was so impressed with her "smoking gun" document that he enlisted Brooks, who chairs the House Judiciary Committee, to help set up a meeting with Attorney General Reno. Though Rose and Brooks presented allegations of a Justice Department cover-up, Reno listened impassively -- and it is not clear precisely what, if anything, she may do about it. "I know she's giving it serious consideration," says Rose, who realizes, just as Reno does, that a full-scale investigation could send shock waves through Washington and corporate suites. That hasn't deterred Jack Brooks, who has already introduced a bill -- his first of the new Administration -- to renew the office of special counsel. If Reno doesn't move, its first task may be to investigate the Justice Department's handling of the BNL case. "This affair is not over; there is much more to learn," Rose said in introducing Gasior last week. "I hope the ultimate truth will be put on the table, but as of today, it is not."

With reporting by Jonathan Beaty/Washington and John F. Dickerson/New York