1 A New Jersey munitions maker has agreed to close after admitting in court Wednesday that it schemed to illegally ship 300,000 artillery parts to Iraq prior to the Kuwait invasion.
2 Rexon Technology Corp. of Wayne tried to send the components through Jordan, although executives had 'collective knowledge' that the devices, used to detonate a powerful howitzer shell, were destined for Iraq, a lawyer for the company told a federal judge.
3 The deal was never completed after the first shipment was intercepted in Britain, officials said.
4 The conspiracy allegedly also involved a Belgian company linked to a planned Iraqi 'supergun,' a long-range cannon designed to fire nuclear weapons.
5 As part of its plea bargain, Rexon will close within six months of sentencing, scheduled for Feb. 22 before U.S. District Judge Maryanne Trump Barry, and charges will be dropped against three of its officers and a consultant.
6 The three officers have substantial ownership in Rexon and are essentially 'wiped out' by the 'corporate death penalty,' said U.S. Attorney Faith S. Hochberg.
7 'They are not individually barred from getting other defense contracts,' Hochberg said. 'But we believe they are so financially hurt they will be unable to start another company.'
8 'They can become an employee, if anyone would hire them,' she said.
9 Meanwhile, the government is 'vigorously pursuing' its case against a British company, Ordnance Technologies Ltd. (Ordtec) and two of its principals that are accused of bringing Rexon into the scheme, Hochberg said.
10 Four Ordtec executives, including the two charged in the scheme, were convicted in February 1992 in England of illegally supplying an assembly line for artillery fuzes to Iraq. Their appeal has not yet been heard.
11 Rexon, Ordtec, officials at both companies and the consultant were indicted here in December 1993, charged with lying to the U.S. government about where the components were going.
12 The companies were accused of conspiring in 1988-90 to ship 300,000 sets of fuze components to Iraq for 155mm howitzer shells, in violation of the Arms Export Control Act. A fuze is a device for detonating bombs, projectiles or explosive charges.
13 Rexon pleaded guilty Wednesday to a single charge of violating the act by attempting to ship the fuzes to Al Fao State Organization. As early as the mid-80s, Al Fao was known to be an Iraqi weapons producer, a congressional investigator familiar with the issue said Wednesday.
14 At the time of its indictment, Rexon denied the charges, contending it had a valid State Department license to ship the components to the Jordanian Armed Forces.
15 Rexon believed the components were to be assembled at a munitions factory being built near Amman, Jordan, the company had said.
16 The alleged conspiracy took place during the Iraqi military buildup prior to the invasion of Kuwait in August 1990, which led to the Gulf War.
17 U.S. policy at the time did not allow sales or third-party transfers of military goods to Iraq, a State Department spokesman said.
18 Democrat Rep. Henry B. Gonzalez, then-chairman of the House Banking Committee, and his aides investigated for two years U.S. aid to Iraqi leader Saddam Hussein before the Gulf War. Gonzalez contends that the Reagan and Bush administrations secretly armed Iraq against Iran in their 1980-88 war.
19 Gonzalez has alleged that the Bush administration helped the Iraqis build a 'supergun' by approving export licenses in 1989 for related technology. One license went to Space Research Corp. of Maryland and Brussels, Belgium, even though the company had been identified as a key player in Iraq's military procurement network, Gonzalez told a Senate hearing in October 1992.
20 The alleged designer of the gun, Canadian Gerald Bull, was found slain outside his Brussels apartment in 1990, shortly before British customs officers seized large steel tubes destined for Iraq which they said could be used to construct a giant gun barrel.
21 The federal indictments returned in 1993 offered this scenario: --Brussels-based Space Research, which no longer exists, contracted with Al Fao in March 1988 to provide plans, manufacturing equipment and components so that Iraq could make its own artillery fuzes. --Space Research subcontracted with Ordtec in September 1988 to provide assembly line gear and fuze components. --Ordtec subcontracted with Rexon in December 1988 to supply the fuze components for dlrs 3.7 million. --Space Research provided phony certificates to Ordtec and Rexon that identified the Jordanian Armed Forces as the final destination of all the munitions.
22 Only 15,000 sets of components were sent, and that shipment was intercepted in Britain in March 1990, shortly after Bull was killed, officials said. It was returned to Rexon, which eventually sold it to the U.S. Army.
23 Rexon was a small company with 200 workers that did 95 percent of its business with the U.S. Army, federal prosecutors have said.
24 The company's lawyer, James A. Plaisted, said its government contracts were terminated in December and he was uncertain how much it could pay in fines. It could be fined up to dlrs 1 million.
25 The three Rexon officers charged in the indictment were among a group of six who bought the company in 1989, said Assistant U.S. Attorney Donald S. Davidson, who prosecuted the case.
26 Charges are to be dropped against Gary D. Kauf, 51, of Rockaway, president and chief executive officer of Rexon; Jerome S. Shafir, 59, of Morris Plains, a Rexon vice president; James A. Bittel, 49, of Riverdale, also a Rexon vice president; and Ronald L. Laib, 63, of Lanoka Harbor, described as an international marketing consultant employed by Rexon.
27 A message left Wednesday at Rexon for the executives was not immediately returned.
28 The U.S. attorney's effort to extradite John Paul Grecian, 39, of London, England, Ordtec managing director, and Bryan Mason, 49, of Marlow, England, an Ordtec engineer, may be complicated by Britain's Home Office practice.
29 Although Britain has never refused a U.S. request for extradition, the policy excludes sending people overseas on charges they have faced in Britain, according to a report on the case in The Guardian newspaper of London.

Rexon Technology Corp . of Wayne tried to send the components through Jordan , although executives had " collective knowledge " that the devices , used to detonate a powerful howitzer shell , were destined for Iraq , a lawyer for the company told a federal judge .
" collective knowledge "
How did they have this collective knowledge? 