Ex-French minister is probed over oil-for-food (Pasqua)

Charles Pasqua, a former French minister of interior, has emerged as one of the highest-ranking targets of the widening investigations into the Iraq oil-for-food scandal.

United Nations, US and French investigators are examining Iraqi documents that show officials in Baghdad were instructed to transfer his lucrative oil allocations to an offshore company, to shield him from criticism.

Mr Pasqua's alleged role has emerged as inquiries turn to the role of foreign governments in the corruption within the humanitarian aid programme. France and Russia, which opposed the 2003 invasion, have long been accused in the US of being too close to Saddam Hussein's regime.

Early on Tuesday, Bernard Guillet, Mr Pasqua's diplomatic adviser, was arrested at home in Paris in connection with the oil-for-food inquiry, on the orders of Philippe Courroye, a French investigative judge. Mr Guillet was yesterday in police custody.

The Iraqi documents indicate that Mr Pasqua's oil allocations were personally approved by Mr Hussein.

Last October, a list of alleged beneficiaries of Iraqi oil allocations that included politicians, journalists and business people from all over the world was published by the US administration. Mr Pasqua and Mr Guillet were said to have received 10.8m and 2m barrels respectively.

At the time Mr Guillet was reported as saying: "My role was only to say to Tariq Aziz [deputy prime minister] or others, 'Look, there are some companies that are willing to work and they're having difficulties.' That's it."

However, a handwritten note from Saddam Hassan, Somo's managing director, suggests Mr Guillet asked Iraqi officials not to give his boss's allocations to any French company.

Mr Pasqua could not be reached for comment. He has previously denied any wrongdoing.

http://news.ft.com/cms/s/b70a4a62-b74a-11d9-9f22-00000e2511c8.html

Charles Pasqua has been a central figure in French politics for three decades. Once described as the man who knows all the secrets, he served twice as minister of interior, first in the late 1980s when Jacques Chirac was prime minister and again in the left-right co-habitation of the Mitterrand presidency of the early 1990s. ADVERTISEMENT

For years French magistrates have been investigating his financial records, probing allegations that he received bribes and illicit funds generated by influence-trafficking and other activities, including arms sales to Angola.

Mr Pasqua has never been convicted of any wrongdoing. Indeed last September he won a seat in the French Senate - a position which confers immunity against prosecution.

But the Financial Times and the Italian business daily Il Sole 24 Ore can reveal that he is about to face a fresh set of allegations which focus on his contacts with Iraq under the regime of Saddam Hussein.

Documents obtained by Philippe Courroye, a French magistrate, during a visit to New York to meet investigators from the United Nations' committee of special inquiry suggest that the former minister and Bernard Guillet, his diplomatic adviser, received and traded lucrative oil allocations through amiddleman.

On Wednesday Mr Pasqua could not be reached for comment. Last year, when his name was first linked to the oil-for-food inquiry, he said: "All this is ridiculous. I categorically deny any involvement."

Mr Guillet was in police custody having been arrested on Tuesday in connection with the oil-for-food inquiry.

Under the programme Iraq was permitted to sell oil for funds to alleviate shortages of medicines and other supplies created by international sanctions. The flaw in the arrangement was that the regime was able to sell allocations at below market prices to people of its own choosing.

The documents show that middlemen - including a little-known Christian Lebanese lawyer and commentator named Elias Firzli - received and traded a total of about 13m barrels. The documents also suggest that Mr Firzli paid more than $1m in oil-related kickbacks to Baghdad, payments that would have been in violation of French law and UN sanctions.

Mr Pasqua's alleged role has come to light as separate oil-for-food investigations - one by a UN committee led by Paul Volcker, the other by the US Congress - shift their attention from corruption within the UN to the commercial relations between Baghdad and members of the Security Council.

At the centre of their inquiries are Russia and France. Mr Pasqua is top of the list of French figures under scrutiny.

Mr Pasqua has had a long history of friendly relations with Iraq as well as contacts with Iraqi intelligence. Only last year he was involved in an aborted attempt to free a journalist working for Liberation, the French daily newspaper, who was held by Iraqi insurgents.

Like many other members of the French political establishment, which saw Baghdad as an ally, he had contacts with officials of Mr Hussein's regime.

In October 1993, when deputy-prime minister Tariq Aziz was allowed to visit Paris to be treated for a heart ailment, the then interior minister had a private meeting with him.

A year later Mr Guillet declared that he hoped that a French interest section could be opened in Baghdad "as soon as possible". A spokesman for Mr Pasqua, meanwhile, said France "made a mistake" when it joined the coalition against Mr Hussein in the first Gulf war three years earlier and that "the time has come to return to Iraq, our natural ally in the Gulf".

After the UN's oil-for-food programme re-opened the Iraqi market in 1996, Mr Guillet was one of the most frequent French visitors to Baghdad.

"I remember meeting him in Baghdad. He was there many times," said an Iraqi oil allocation holder. "I suppose he wasn't there for the beauty of the Tigris or to see Babylon, since he was getting oil allocations despite the fact that he wasn't an oil trader."

Although one of the four allocations was listed under Mr Guillet's name, Iraqi State Oil Marketing Organisation (Somo) records indicate that he was negotiating as an emissary of Mr Pasqua.

A handwritten letter by Sami Sa'doum, Mr Aziz's chief of staff, reads: "Please note that Mr Bernard Guillet is the diplomatic and political adviser to Mr Charles Pasqua, the French politician and the former minister of interior. And he represents him in collecting the quota of oil that is allocated to Mr Pasqua."

The Iraqi documents show that Mr Guillet and Mr Pasqua were careful to distance themselves from Somo's oil, by transferring three of their allocations to Genmar Resources, a Swiss company.

Mr Sa'doum's note adds: "When we explained the importance of selecting a French company [to receive a contract] since the amount is assigned to a French personality, Bernard Guillet responded by saying that this was not possible for political reasons.

"We asked Mr Bernard Guillet for a letter where Mr Charles Pasqua would authorise the company Genmar to lift the oil but he refused, explaining that they are unable to do that because they are afraid of political scandals."

Genmar was incorporated in Switzerland and in the British Virgin Islands in 1997. It was run from Dublin by John Carr, an Irishman. Mr Carr declined to comment.

The FT and Il Sole have established that Mr Carr received 2 cents per barrel for allowing his company to be named on the contracts for the three allocations given to Mr Pasqua. He did not finance the purchase of oil.

There was an additional buffer between the Iraqi oil contracts and Mr Pasqua and Mr Guillet: Elias Firzli.

Now in his sixties, Mr Firzli is known as a committed Ba'athist and a friend of Mr Aziz since the 1960s. At the time, Mr Aziz was in exile in Lebanon.

Mr Firzli received his own oil allocations as a reward for his support for the Iraqi regime, but he also managed allocations for others.

A letter to the head of Somo on March 28 2000 from Na'na Hamidia, a Syrian journalist and allocation holder, suggests that Mr Firzli acted as a middleman between allocation holders and the companies that would obtain the formal contracts for their oil.

The letter says: "I was informed by Mr Elias Firzli, who was planning to give my allocation to the Swiss company Genmar, that this company is not going to lift my allocation.

"I have no explanation as to the company's reasons and Firzli can inform you of this."

Between autumn 1999 and autumn 2000 - the period in which Mr Pasqua received three oil allocations - Mr Firzli made payments of approximately $300,000 to a bank account in the name of Guillet.

UN investigators also found records that suggest both Genmar and Mr Firzli paid kickbacks, as demanded by the regime from 2000. According to Somo's records, between December 2001 and February 2002 Mr Firzli paid more than $1.1m in so-called "surcharges" for both his own and Mr Guillet's allocation.

Reached by telephone in Lebanon's Beka'a Valley, where he now lives, Mr Firzli said: "[It is] my conclusion that I should not talk." Claudio Gatti is a New York-based investigative reporter for Il Sole 24 Ore

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