Mr. JENKINS. And you didn't want to get any superior in trouble, I assume?

Ms. HINKLEMAN. No. And I honestly didn't know. When you don't know, you don't accuse or make statements that aren't really-you don't know. I don't-I really honestly did not want to get fired, no, because I had been with the company for a very long time and thought I was going to be there forever to be quite honest with you.

Mr. JENKINS. Well, at some point didn't you talk with Mr. Jones or some superior and say, look at all of these things Tanaka and all these people are trying to purchase?

MS. HINKLEMAN. Yes.

Mr. JENKINS. Did you?

MS. HINKLEMAN. Yes, I did.

Mr. JENKINS. And those list of chemicals were on the danger list, were they not?

Ms. HINKLEMAN. Yes, they were.

Mr. JENKINS. What did Mr. Jones say to you?

MS. HINKLEMAN. That he never saw it and that I

Mr. JENKINS. That what?

Ms. HINKLEMAN. That he never saw it and that I should get rid of it. I did. I think I took it back and just threw it in the trash can. I don't know what the chemicals were. I know that he didn't like the sound of them or the look of them. But I don't know what they

were.

Mr. JENKINS. So what he was saying to you is I didn't see that list; is that right?

MS. HINKLEMAN. Right.

Mr. JENKINS. Don't tell me what is on that list or what this company wants to buy because I don't want to know anything about it? MS. HINKLEMAN. Right.

Mr. JENKINS. Is that what he was saying to you?
MS. HINKLEMAN. Basically, yes. That's how I took it.

Mr. JENKINS. Did you ever tell Mr. Bass or Customs about that? Ms. HINKLEMAN. No, I did not. I was very careful honestly in what I said and I tried not to incriminate people from Alcolac because I did not know what they knew and so I wasn't going to say, yeah, they knew, yeah, they should have known, yeah, they knew everything, and I did not do that. So, I basically said what I knew and how I dealt with it, but I really didn't drag other people into it. Mr. JENKINS. Ms. Hinkleman, if you had had any idea that this chemical was going to be used for mustard gas somewhere in Iran, would you have participated in the sale of such a commodity?

Ms. HINKLEMAN. No, I most certainly would not have. If they had told the company didn't even tell all the employees. So, I mean, every employee in the company did not know what this product could be used for. I think that if companies know that it can be misused or can be used for mustard gas, they should tell everybody. Why not tell the whole company? Tell everybody in shipping, everybody in receiving, everybody in purchasing.

I mean, that way those people will know if they see an order come through for this for 3,000 tons or something they're going to suspect it. They might say, well, this looks pretty strange, you know. But when the company doesn't bother to tell the employees

what is going on, then how are the employees supposed to know or how are they supposed to flag it?

Mr. JENKINS. So the company gave no information to its employees?

Ms. HINKLEMAN. No, they did not. Of course, toward the end when they were having so many problems they, of course, did. But there are a lot of people that work for a chemical company who are not chemists and they don't know. I am sure that the chemists knew. I am sure that the people in the chemical department knew. Mr. JENKINS. But they didn't say anything to the people down on the

Ms. HINKLEMAN. They didn't tell the secretaries.

Mr. JENKINS [continuing]. Export? They didn't tell the export manager?

Ms. HINKLEMAN. Not until it was a little bit too late, I think.
Mr. JENKINS. Not until after the fact?

Ms. HINKLEMAN. Well, I did they did tell me before because in 1985, I think, when they were first contacted by the Department of Commerce, then they did bring it to our attention. They did mention it. I mean, there was never any big memo go out, but they did say the product can be used in mustard gas and we should be careful.

Mr. JENKINS. What basically did they say, look, this could be used for mustard gas and might be—we may have customers from the Middle East trying to buy this from us, be careful and don't sell this to potential customers from the Middle East?

Ms. HINKLEMAN. Basically. Yes, basically, they did say something like that.

Mr. JENKINS. After they said that, did you sell any? Did any of these transactions occur after that?

Ms. HINKLEMAN. Yes. Of course, they did. I mean, I don't know if all of them were legitimate or not legitimate. I don't know.

Mr. JENKINS. After all, you were making all these sales and the company made a million dollars or so from these sales apparently from what I heard. Did anyone tell you that you were doing a great job?

Ms. HINKLEMAN. Yes.

Mr. JENKINS. Did they?

Ms. HINKLEMAN. Yes, they did.

Mr. JENKINS. Who was telling you that?

Ms. HINKLEMAN. Paul Jones.

Mr. JENKINS. Mr. Jones.

Ms. HINKLEMAN. And David Phillips. He was the president. I mean, I was told I did a very good job. They were very pleased.

Mr. JENKINS. You didn't go out and solicit any orders, you just received them; is that right?

Ms. HINKLEMAN. Right. No, I did not solicit.

Mr. JENKINS. Did anyone have any supervisory duties to look over the orders that you were receiving?

Ms. HINKLEMAN. Yes, I think that the director of finance looked over every order that I put through.

Mr. JENKINS. Who was that?

Ms. HINKLEMAN. Roger Nielson.
Mr. JENKINS. Roger Nielson.

Ms. HINKLEMAN. Yes.

Mr. JENKINS. Did he ever raise any question about any of this? Ms. HINKLEMAN. Only once that I can remember. It was one of the shipments going to Germany. It was net 60 days or some kind of thing where he thought he wasn't going to get his money and he was quite upset that I had done it that way. He wanted a letter of credit for all future orders after that.

Mr. JENKINS. It appears to me, and my conclusion may be wrong, that you feel that all of your superiors had more knowledge of this than you did.

MS. HINKLEMAN. I believe so.

Mr. JENKINS. You believe so.

Ms. HINKLEMAN. I can honestly say they did not know about the telex that I had destroyed, but they did basically know just about everything else, I would think.

Mr. JENKINS. If your superiors are telling you, "Don't show me that, I don't want to look at it," does that raise a red flag to you? Ms. HINKLEMAN. Yes, kind of.

Mr. JENKINS. So, basically, your statement is that companies are dealing in this type of commodities, if we want to know what is going on, then they ought to be required to at least inform their employees that this can be used for mustard gas or whatever?

Ms. HINKLEMAN. I should think so, yes, and I think that on the forms going to the Department of Commerce, they should also put that on there. and I think it should be in the literature that they send out to the customers. I mean it does not make sense, if it can be used for that, why do they not put it on there.

Mr. JENKINS. Mr. Bunning wanted to

Mr. BUNNING. I just have got a couple of other questions. Does Customs continue monitoring companies that violate this law that you prosecuted under? In other words, are you presently or have you in the past continued to monitor those companies? Mr. BASS. Yes, sir. In fact, chemicals are very big priority.

Mr. BUNNING. I am talking specifics now. I am talking about those who have violated the law.

Mr. BASS. Yes.

Mr. BUNNING. Do you have any knowledge or does anyone at your desk there have any knowledge about the IRS being involved in checking on the amount of profit and those profits that this corporation made in direct relationship to these illegal shipments?

Mr. BASS. I do not know of any IRS knowledge or investigation into this, no.

Mr. BUNNING. I asked you about the list of all the chemicals that can be made into mustard gas, and I have it before me. I would like to ask Ms. Hinkleman, did the corporation that you worked for ever publish a list like this-there may be 20 names on it—or put it on your bulletin board or notify you that these are the chemicals that could be used for illegal gases or whatever they might be? MS. HINKLEMAN. No, not that I recall.

Mr. BUNNING. They did not?

MS. HINKLEMAN. No.

Mr. BUNNING. That is all the questions I have, Mr. Chairman. Chairman PICKLE. The Chair would like to proceed now to the next panel, but the Chair makes the observation that the Customs

laws are not being carried out or they are being circumvented, when an employee of the company can change the labeling on the product, in this particular case thiodiglycol, and just automatically call it Kromfax, that is questionable, if not a violation of the law, when an employee can just simply order special kinds of containers, that ought to be questionable, particularly when a shipment of this kind of a good is used for mustard gas.

When an employee of the company can actually put on that chemical the label on it, they leave blank the country of ultimate destination, not even show it, that should raise a flag, and that is a weakness of our law. And certainly if an employee of a company can actually put on the outside of the document that transshipment is allowed, no ultimate company, but just send it on, thus it would not be inspected at any one port.

If those kinds of things can be carried out and is being carried out and was carried out in this case, then it is obvious to me that our Customs laws and export laws are embarrassingly loose, and in this particular case dangerous.

On the other hand, if a company can be set up to make these purchases and transshipment of a product that is obviously dangerous to the world, and there is no control by that company as to where the goods go or they are not being sent, then it seems to me obvious that the company officials knew what was going on. The company officials have not been indicted in this case in any regard, simply because Customs says they cannot make a case.

This committee does not want to prejudge it, but this committee is going to ask the House Counsel to see if suit can still be brought against company officials, by name and by individuals. And when they appear before our committee, that is, the Commerce and State Department later, we will ask that question, why that cannot be done, and perhaps they will either deny or confirm that a suit can still be brought.

There are obvious weaknesses in the carrying out of our Customs laws. Changes must be made, particularly when these kinds of products are so dangerous to the world and came that close to causing great damage to our people. And when we now find that we are going to fine the company, but we want to also get a guilty plea from one employee, who may or may not have known a lot more than she has indicated, we have to say that justice has not been carried out.

So, therefore, I am asking the House Counsel to confer with our Justice Department and we will see if suit can still be brought. It seems to me like there is a weakness there.

Now, the Chair will have other questions, but we must go on to the other panels. I appreciate your testimony very much.

Do any other members have any other questions at this point? Mr. Moody, do you have any questions about this suit?

The next panel will be Frank Deliberti, National Director for the Office of Export Enforcement, Bureau of Export Administration, accompanied by Leonard Patak, Special Agent in Charge, Office of Export Enforcement, out of Dallas.

Mr. Deliberti, are you in Washington?
Mr. DELIBERTI. Now I am, sir.

Chairman PICKLE. Where were you?

Mr. DELIBERTI. Prior to that, from 1985 to about February of this year, I was the Special Agent in Charge of the San Jose field office, which covered the nine Northwestern States of the country.

Chairman PICKLE. Now, do you have a statement, or does Mr. Patak have a statement, also?

Mr. DELIBERTI. I have a statement and Mr. Patak will answer some of the questions that you may have with me.

Chairman PICKLE. Will you proceed, sir.

STATEMENT OF FRANK W. DELIBERTI, DIRECTOR, OFFICE OF EXPORT ENFORCEMENT, BUREAU OF EXPORT ADMINISTRATION, U.S. DEPARTMENT OF COMMERCE, ACCOMPANIED BY LEONARD S. PATAK, SPECIAL AGENT IN CHARGE, OFFICE OF EXPORT ENFORCEMENT, DALLAS, TEX.

Mr. DELIBERTI. Mr. Chairman and members of the subcommittee, I am pleased to appear before your subcommittee today to discuss export enforcement. I will summarize and ask that my entire written statement be submitted for the record.

Chairman PICKLE. Without objection, it is so ordered.

Mr. DELIBERTI. As you have requested, I will now discuss the Global Helicopter case. Let me begin by saying that there are limitations on the testimony I can give. Consequently, I will be able to discuss only our initial investigation and Commerce's action on revoking a general license. I understand from your staff that this is acceptable to the subcommittee.

On July 24, 1990, we learned that, in early 1988, Global Helicopter Technology, Inc., of Hurst, Texas, was contacted by Cardoen Industries of Santiago, Chile. According to the information, Cardoen had modified a Bell Long Ranger Helicopter, changing the twoperson crew station to a single-crew station. Cardoen returned the helicopter to the United States, telling Global that it wanted to market it in the United States, and that Global should obtain the necessary FAA certification. We also learned that the helicopter might be a prototype for the manufacture of attack helicopters by Cardoen for resale to Iraq.

We immediately checked our licensing data base, which revealed no export identification number for Global, but listed Cardoen. We determined that Cardoen was a large company in Chile that manufactured a variety of goods, ranging from agricultural products to armaments.

According to our information, Cardoen was the largest arms manufacturer in Chile, and the majority of its armament sales were to Iraq. Our special agents immediately contacted the FAA in Fort Worth, Texas, in order to obtain the serial number of the helicopter.

The FAA gave us the serial number and referred us to an article in the London Sunday Times about a Cardoen modified helicopter. The British journalist asserted that the Cardoen helicopter was being marketed as an attack aircraft, and that Iraq had placed an order with Cardoen for 50 of them.