The Bechtel Group Inc. offered in 1985 to sell oil to Israel at a discount of at least $650 million for 10 years if it promised not to bomb a proposed Iraqi pipeline, a Foreign Ministry official said Wednesday. But then-Prime Minister Shimon Peres said the offer from Bruce Rappaport, a partner in the San Francisco-based construction and engineering company, was ``unimportant,'' the senior official told The Associated Press. Peres, now foreign minister, never discussed the offer with other government ministers, said the official, who spoke on condition of anonymity. The comments marked the first time Israel has acknowledged any offer was made for assurances not to bomb the planned $1 billion pipeline, which was to have run near Israel's border with Jordan. The pipeline was never built. In San Francisco, Tom Flynn, vice president for public relations for the Bechtel Group, said the company did not make any offer to Peres but that Rappaport, a Swiss financier, made it without Bechtel's knowledge or consent. Another Bechtel spokesman, Al Donner, said Bechtel ``at no point'' in development of the pipeline project had anything to do with the handling of the oil. He said proposals submitted by the company ``did not include any specific arrangements for the handling of the oil or for the disposal of the oil once it reached the terminal.'' Asked about Bechtel's disclaimers after they were made in San Francisco, the Israeli Foreign Ministry official said Peres believed Rappaport made the offer for the company. ``Rappaport came to Peres as a representative of Bechtel and said he was speaking on behalf of Bechtel,'' the official said. ``If he was not, he misrepresented himself.'' The Jerusalem Post on Wednesday quoted sources close to Peres as saying that according to Rappaport, Bechtel had said the oil sales would have to be conducted through a third party to keep the sales secret from Iraq and Jordan. The Foreign Ministry official said Peres did not take the offer seriously. ``This is a man who sees 10 people every day,'' he said. ``Thirty percent of them come with crazy ideas. He just says, `Yes, yes. We'll think about it.' That's how things work in Israel.'' The offer appeared to be the one mentioned in a September 1985 memo to Attorney General Edwin Meese III. The memo referred to an arrangement between Peres and Rappaport ``to the effect that Israel will receive somewhere between $65 million and $70 million a year for 10 years.'' The memo from Meese friend E. Robert Wallach, Rappaport's attorney, also states, ``What was also indicated to me, and which would be denied everywhere, is that a portion of those funds will go directly to Labor,'' a reference to the political party Peres leads. The Wallach memo has become the focus of an investigation into whether Meese knew of a possibly improper payment. Peres has denied any wrongdoing and has denounced the memo as ``complete nonsense.'' The Israeli official said Rappaport, a native of Israel and a close friend of Peres, relayed the offer to Peres earlier in September. ``Peres thought the offer was unimportant. For him, the most important thing was to have an Iraqi oil port near Israel's border,'' the official said. ``The thinking was that this would put Iraq in a position where it would not be able to wage war with Israel, out of concern for its pipeline.'' A person answering the telephone at Rappaport's Swiss residence said he was out of town and could not be reached for comment.
