Posted on 03/27/2004 5:39:29 PM PST by saquin
AN INVESTIGATION into the United Nations oil-for-food programme in Iraq is to name more than 200 people, including British and European politicians, businessmen and senior UN officials who may have profited from Saddam Hussein’s regime.
The probe is being conducted by the accountants KPMG and the law firm Freshfields Bruckhaus Deringer on behalf of the Iraqi Governing Council (IGC). The KPMG team previously traced assets seized by the Nazis during the Holocaust.
Investigators fear that tens of billions of dollars may have been distributed improperly under the auspices of the aid programme. The publication of the report, probably in May, is likely to embarrass the UN. It stands accused of failing to police the oil-for-food scheme while senior officials allegedly took kickbacks.
The scheme, set up in 1995, allowed the Iraqi regime to sell oil worth more than $47 billion in return for food and other essential humanitarian supplies. However, Iraqi documents scrutinised by the investigators suggest that millions of barrels of oil were given as bribes for supporting Saddam and his regime.
KPMG is also investigating allegations that bribes were paid to UN staff and that food unfit for human consumption was traded for oil.
The report will identify for the first time everybody who was allegedly allocated oil and others who may have acted improperly under the scheme. Further investigation will establish how many were profiting illegally from the arrangement. Some were legitimate traders.
Those who are expected to be named include the head of the UN’s oil-for-food programme, the Russian Communist party, the PLO and a French businessman with close links to President Jacques Chirac.
The investigation into the scandal is being overseen by Claude Hankes-Drielsma, a former chairman of the management committee of Price Waterhouse who is now advising the IGC. Last December Hankes-Drielsma, now chairman of Roland Berger Strategy Consultants, a management firm, wrote to Kofi Annan, the UN secretary-general, urging him to set up an independent inquiry into the programme.
In a subsequent letter sent earlier this month to Annan, seen by The Sunday Times, Hankes- Drielsma said: “The UN failed in its responsibility to the Iraqi people and the international community at large . . . It will not come as a surprise if the oil-for-food programme turns out to be one of the world’s most disgraceful scams and an example of inadequate control, responsibility and transparency, providing an opportune vehicle for Saddam Hussein to operate under the UN aegis to continue his reign of terror and oppression.”
The KPMG team is trawling through documents held in several Iraqi government departments, including the oil ministry in Baghdad. The documentation is said to have been meticulously kept, countersigned and often copied to several departments. Investigators are interviewing the Iraqi civil servants who apparently signed and compiled the documents to verify their authenticity.
It is understood that KPMG, and the IGC, are confident that the documentation is authentic and reliable. They are determined to name the people who were allegedly allocated oil. The British government is believed to have put pressure on the IGC not to reveal names at this stage but this has been rebuffed.
After the report’s publication a second phase of the investigation will trace what happened to the allocated oil, where and if it was sold, how much money was made and by whom.
Freshfields, a leading international law firm, has been employed by the IGC to find ways to recover any profits improperly made from the oil sales. Although it is already giving advice, most of its work will take place when KPMG has traced what happened to the oil and who made a profit.
“I don’t think we should make the assumption that payment is necessarily improper,” said Hankes-Drielsma this weekend. “Ethically it may have been improper and they (those named in the report) might have violated UN sanctions, but these are the things detailed exhaustive investigations will prove.
“Many on the list may be absolute bona fide oil traders. But there are people on the list who have been allocated oil and you have to ask: ‘Why?’” Documents indicate that Benon Sevan, director of the UN’s humanitarian programme in Iraq, was allocated 14.2m barrels of oil, of which 7.291m were disbursed. It is understood that the oil was sold through a Panama-based company run by distant relatives of Boutros Boutros-Ghali, a former UN secretary-general. There is no suggestion Boutros-Ghali has done anything wrong. Sevan denies any improper conduct.
The report may also be embarrassing for several countries that opposed last year’s Iraq war. Patrick Maugein, a French businessman from Chirac’s home region of Correze who is said to be close to the president, is expected to be named as someone who was allocated oil. He denies any impropriety. Maugein owns a share in an Italian refinery that legally bought some cargoes of Iraqi oil.
Charles Pasqua, a former French minister, may also be on the list but denies receiving any oil. The Russian Communist party and the Russian Orthodox church, an Asian president, many Middle East politicians, the Indian Congress party and several Turkish firms may also feature in the report. The process of recovering assets obtained improperly could last for years and the UN has already ordered its own investigation as the scandal threatens to blacken its reputation.
Last week the US General Accounting Office, a congressional investigatory body, estimated that Saddam and his regime acquired $10.1 billion (nearly £5.6 billion) in illegal revenues from oil which was used to fund many of the kickbacks. Much of this was earned under the auspices of the UN programme.
Hankes-Drielsma said: “The UN received a percentage fee of well over $1 billion to administer the scheme, handing out $47 billion, and they totally failed. Therefore, sadly, given that their credibility is in doubt, any future such role for the UN is in question.”
Yes it's sarcasm.
If my math is correct, that says that the UN disbursed .5% and retained 99.5%.
Nice business! Wish I could get me one of those!
Good.
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