The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1997, Landmark Communications, Inc.

DATE: Wednesday, February 12, 1997          TAG: 9702120475
SECTION: FRONT                   PAGE: A1   EDITION: FINAL 
SOURCE: BY CHARLES J. HANLEY, ASSOCIATED PRESS 
DATELINE: MANAMA, BAHRAIN                   LENGTH:   95 lines

TONS OF DIESEL FUEL SMUGGLED FROM IRAQ, NAVY SAYS EMBARGO RUNNERS, IRANIANS HAVE HAD FACEOFFS WITH NAVY.

Skirting the shoals of Iran's Persian Gulf coast, tankers are smuggling tens of thousands of tons of diesel fuel out of Iraq in violation of United Nations sanctions, a Navy admiral said Tuesday.

The embargo busters and their Iranian protectors have had two confrontations with the Navy in the past two weeks. In one unpublicized showdown, an unidentified tugboat rammed a San Diego-based frigate.

In another, an armed patrol boat menaced the Norfolk-based destroyer Nicholson and a Pacific Fleet ship.

``Our indications are that this is a rather sophisticated effort, centrally controlled within Iran,'' Vice Adm. Thomas B. Fargo, commander of the U.S. 5th Fleet, told The Associated Press at his Bahrain headquarters.

The ``Iran connection'' is one visible sign of cooperation between the two former enemies in trying to foil American efforts to enforce U.N. trade sanctions on Iraq.

But the main motive is money. Iraq, desperate to circumvent the embargo, will sell the oil cheap, and a 2,000-ton shipment of diesel fuel can net $150,000, Fargo estimated.

Crews of intercepted vessels tell investigators that Iranian authorities are taking a cut of the profits.

``A protection fee is paid to the Iranians that guarantees them safe passage through territorial waters,'' Fargo said.

He said an Iranian Revolutionary Guard maritime station at the mouth of the Shatt al-Arab waterway that separates Iran and Iraq appeared to be the ``gatekeeper'' for the illicit shipments.

Even businessmen in one U.S.-allied nation profit from the smuggling. Fargo said some smuggled diesel fuel eventually is offloaded in the United Arab Emirates in the southern Persian Gulf.

He said U.S. officials are ``working very closely with the UAE government'' to ensure enforcement in UAE waters. The Emirates says it does not have the capability to monitor its entire lengthy coast for smugglers.

THE U.N. SANCTIONS were imposed in 1990 to punish Iraq for its invasion of Kuwait, and have been maintained because of Iraq's apparently continuing efforts to develop weapons of mass destruction.

Since mid-December, however, an exception has been made for the sale of limited amounts of Iraqi petroleum, under U.N. supervision, to buy needed food and medicine.

As legitimate shipments have begun to leave Iraqi ports, the diesel smugglers have stepped up their work as well.

``Through our reconnaissance capabilities'' - satellites and U.S. aircraft - ``we can image these guys as they're loading up,'' Fargo said.

The diesel smuggling ``has increased to 60,000 metric tons per month, due to the fact that there's a significant profit to be made,'' he said.

After picking up the fuel at ports on the Shatt, the ships - not only small tankers, but other vessels that flood their ballast tanks and compartments with the cargo - hug the Iranian coast as they steam southward.

Fargo said 30 vessels have been identified on the ``Iran connection'' run, one having traversed the route at least nine times.

BOTH INTERNATIONAL LAW and treacherous coastal shoals keep deep-hulled Navy destroyers on sanctions patrol out of Iran's 12-mile-wide territorial waters.

A watch officer aboard the destroyer Cushing, steaming in the northern Gulf, said crew members can detect the boats but cannot go after them.

On Feb. 4, Iran's interest in the trade became clear to destroyer crews when the Nicholson - part of the Middle East Deployment Force since leaving Norfolk Dec. 9 - cut off and boarded a diesel smuggler in international waters, and an Iranian patrol boat sped to the scene.

When the Cushing arrived to back up the Nicholson, the Iranian craft, armed with anti-ship missiles, began circling the U.S. warships. Their crews took up defensive positions on deck.

The incident ended peacefully and the destroyers impounded the smuggler vessel after the Iranian boat left.

A week earlier, on Jan. 26, the guided missile frigate Reid was not so lucky.

The San Diego-based frigate, in international waters, intercepted a tug towing a barge laden with illicit fuel out of Iraq. The tug cut the barge loose, rammed the warship twice and then raced to an Iranian safe haven.

No one was injured aboard the Reid, but the ship sustained a 20-inch crack on its starboard bow, above the water line, and required repairs. The barge was impounded. MEMO: Virginian Pilot staff writer Earl Swift contributed to this

report. ILLUSTRATION: Color photo

ASSOCIATED PRESS

U.S. sailors return to the Pearl Harbor-based destroyer Cushing

after searching a Maltese-registered cargo ship for contraband in

the Persian Gulf Monday.

ASSOCIATED PRESS

Petty Officer 2nd Class Jeffrey Wallace of Oklahoma City, Okla.,

monitors the movements of surface and air vessels in the Persian

Gulf from the combat center on the destroyer Cushing Monday. The

warship is searching the gulf for ships smuggling fuel out of Iraq.


by CNB