Is this true? How did they get it? This is the first I've heard of any state other than Russia and the U.S. having the live virus.
I have serious doubts that Saddam or anyone else has smallpox.
I don't think they know -- according to a story in today's WSJ (posted somewhere on FR, I think "In Strictest Security, Scientists Are Giving Smallpox to Monkeys"), governments are afraid that some of the preserved virus may have been stolen -- similar to fears that old Soviet nuclear materials have not been accounted for. Of course, the WSJ article notes that CDC scientists are deliberately (and horribly) infecting monkeys to try to discover a treatment, which does not currently exist. What if someone at the CDC can be bribed (what? a government employee take a bribe?); what if they've been infiltrated, as seems possible with the FBI (lots of terror indicators went untranslated)?
I don't know. But when the anthrax scare started, articles on likely forms of bioterrorism always mentioned the possibility of smallpox. Whether someone knows more than I do (highly likely), or they're making it up, I couldn't say.