Spain asked CIA about barring Libyan chemicals deal

The Spanish government used information it requested from the CIA in deciding against giving the go-ahead to a firm to build a plant in Libya that was to be used to develop nitrate-based explosives for the mining industry.

In the latest round of WikiLeaks releases of US Embassy dispatches, cables show that Spain feared the Libyan government would use the nitrate for Scud missile fuel. Técnicas Reunidas, the firm whose subsidiary, Espindesa, signed the Libyan contract in 1999, is suing the Spanish government over the matter. The case is still pending before the courts.

Técnicas Reunidas, an Ibex-35 firm and leader in the construction of industrial and energy plants, was to receive 6.5 million euros. Like a huge jigsaw puzzle, the plant parts were ready to be shipped to the North African country on September 23, 2001. But because of the World Trade Center attack days before, the dissembled plant was stored away at warehouse in Valencia.

The government agreed to bar the sale for three years, but Spain's Disarmament Affairs Ambassador Tomás Rodríguez-Pantoja told US officials that it was under pressure by the Libyan government and Espindesa, which had filed a lawsuit.

In October 2005, Rodríguez-Pantoja told US officials that if Washington supported Madrid's prohibition, it would lend support to blocking the sale for three more years. The United States had already told Spain to block the sale in May and again in September 2001.

Rodriguez-Pantoja said that neither the Foreign Ministry nor the National Intelligence Center (CNI) believed the sale should go through. "Both argue that while the current Libyan Government may have changed its spots, a coup could happen any day and a less friendly/responsible Libyan regime could emerge," the cable written by then-Ambassador Eduardo Aguirre states. "Rodriguez-Pantoja stressed that Libya retains 400 medium-range SCUDs with the ability to strike Israel and that this explosives plant could easily be converted from producing mining explosives into producing Scud missile fuel."

Espindesa had asked the Foreign Ministry to make an "informal and discreet" inquiry at the US Embassy to determine where the US government stood on the matter.

"Espindesa does not want to trigger US sanctions or otherwise draw the US' ire by continuing with the project," reads another cable dated May 19, 2005.

Sources at Técnicas Reunidas say that the Libyan project was put off because of the difficulties in carrying it out. Materials that had been stored in Valencia were either sold or used for other plants, although the lawsuit continues before the courts.