this is from a senate hearing.....Like most foreign-policy insiders, Rumsfeld was aware that
Saddam was a murderous thug who supported terrorists and was
trying to build a nuclear weapon. (The Israelis had already
bombed Iraq's nuclear reactor at Osirak.) But at the time,
America's big worry was Iran, not Iraq. The Reagan
administration feared that the Iranian revolutionaries who
had overthrown the shah (and taken hostage American diplomats
for 444 days in 1979-81) would overrun the Middle East and
its vital oilfields. On the--theory that the enemy of my
enemy is my friend, the Reaganites were seeking to support
Iraq in a long and bloody war against Iran. The meeting
between Rumsfeld and Saddam was consequential: for the next
five years, until Iran finally capitulated, the United States
backed Saddam's armies with military intelligence, economic
aid and covert supplies of munitions.
http://www.fas.org/irp/congress/2002_cr/s092002.html