http://www.fas.org/irp/gulf/cia/970409/cia_wp.html
The US Intelligence Community (IC)
(1) has assessed that Iraq did not use chemical weapons during the Gulf war. However, based on a comprehensive review of intelligence information and relevant information made available by the United Nations Special Commission (UNSCOM), we conclude that chemical warfare (CW) agent was released as a result of US postwar demolition of rockets with chemical warheads in a bunker (called Bunker 73 by Iraq) and a pit in an area known as Khamisiyah.
Iraq's Chemical Warfare Program
Before the Persian Gulf war, the IC assessed that Iraq had a significant chemical weapons capability, including chemically armed Scuds. The IC also assessed that Iraq had used chemical weapons on numerous occasions against Iran and its own citizens. At the time of the US deployments to the Persian Gulf, the IC had reached consensus that Iraq had chemical weapons in its arsenal, had likely forward-deployed these weapons, and was prepared to use them against Coalition forces.
When Desert Shield began, our concerns about the Iraqi use of weapons of mass destruction became the focus of our chemical weapons analytic and collection efforts. IC analysts sought to identify possible Iraqi CW facilities for targeting purposes. Sites throughout Iraq were identified, albeit on incomplete information.
Several CIA chemical and biological warfare analysts maintained internal 24-hour coverage during the start of the air war and later through the ground campaign to provide support to senior CIA officials and key policymakers. Although there were many reports of chemical weapons use, analysis of all-source information indicated that these were false alarms and that chemical weapons were not used. CIA later published an assessment concluding that Iraq had never deployed chemical weapons to its frontline units, subsequently decided to move them out of the theater prior to war, and never used them against Coalition forces.