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Either Saddam was bluffing or there was a complicated bluff of Saddam by his own guys. If a dude is whacking people like Tony Soprano, you might just tell him what he wants to know, rather than the truth.
If you're Saddam's top nuke guy, you might not even tell anyone that the program is a fake -- and so they may all believe it's real, and all that belief may be picked up by intelligence. You may even have a payroll of guys whose job it is to carry test tubes from point A to point B.
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