Posted on 04/22/2004 4:13:35 PM PDT by saquin
SIMULTANEOUS investigations of the now-defunct United Nations Oil-for-Food programme aim to expose how Saddam Hussein used Iraqs vast oil wealth to buy political influence around the world.
The Iraqi Governing Council, the US Congress and an independent panel established by the UN have started to investigate allegations that Saddams regime used oil to bribe politicians, political parties, journalists and a leading UN official.
The inquiries are also examining Saddams system of kickbacks, which he used to break sanctions, fund his military and sustain his regime.
The scale of the alleged corruption is staggering. The investigative arm of the US Congress estimates that Saddam earned $4.4 billion (£2.59 billion) in illegal surcharges and after sale service fees on contracts overseen by the UN. Individual bribes allegedly ran into millions of dollars.
The scandal has created an atmosphere of dread at the UN, which ran the Oil-for- Food scheme, just as the world organisation prepares to play a larger role in the political transition in Iraq. But the allegations have also sent shockwaves around the world because hundreds of prominent figures in two dozen countries stand accused.
The fall of Saddam has made available a treasure trove of documents that contain some of Iraqs most closely guarded secrets. Few have been made public, but coalition officials have taken steps to secure the evidence.
The UN Oil-for-Food scheme was the largest UN humanitarian programme in the organisations history, handling a total of $64 billion worth of Iraqi crude from December 1996 until it was wound up last year.
The programme was established after the first Gulf War to mitigate the effects of the UN economic embargo imposed after the 1990 invasion of Kuwait.
Britain and the United States played a leading role in its creation because governments did not want to be accused of starving the Iraqi people. At times, both powers had to bend to pressure from other countries to turn a blind eye to corruption and mismanagement so that Iraq continued to co-operate with the scheme.
The UN exercised oversight through its control of Iraqi oil revenues. Money generated from approved Iraqi oil sales was deposited in a UN escrow account. The UN then released funds to pay for approved imports of food, medicine and other humanitarian supplies.
The oil price was set by a panel of UN oil overseers and all contracts approved by the UN Security Councils 15-member sanctions sub-committee, operating by consensus so that any single member could block a decision. But Iraq found ways to circumvent the UN monitoring, enabling it to demand billions of dollars in kickbacks.
The first weakness of the UN system was the mechanism to set the oil price. Although there were originally three oil overseers, retirements and resignations reduced this number to one a relatively young former Russian insurance executive. For more than a year, Russia blocked the appointment of new overseers to replace those who had left.
Until late 2000, the UNs price for Iraqi oil was set at the start of each month. That allowed Iraq to time its sales to exploit the ups and downs of the world oil market.
A higher world price meant a higher margin over the price set by the UN, allowing it a greater profit, which Iraq could then demand be kicked back to Baghdad.
Congressional investigators estimate that Iraq levied an illegal surcharge of between 10 cents and 35 cents a barrel on crude shipped under the Oil- for-Food programme.
Iraq also made money by demanding kickbacks on contracts to supply it with humanitarian goods under the UN scheme. US officials say that the customary kickback was 10 per cent. A vendor selling Iraq $100 (£56) of goods would notify the UN that the shipment was worth $110 and give the $10 to Iraq.
The money generated was deposited in front companies, bank accounts or Iraqi embassies abroad and transported back to Iraq as cash. But some was also used to rebuild Iraqs military and buy prohibited equipment abroad.
Charles Duelfer, the former UN inspector who is leading the CIA search for weapons of mass destruction in Iraq, told Congress last month that Iraq funnelled Oil-for-Food money to the Military Industrialisation Commission (MIC), which worked with the Iraqi intelligence service to set up front companies overseas to procure arms. The MIC budget increased nearly a hundred-fold from 1996 to 2003, totalling $500 million last year alone.
Iraqs demands for kickbacks were long known to British and US officials, who tried to fix the UN system to counter them. Eventually, Russia allowed the replacement of the departed oil overseers and the sanctions subcommittee changed to retroactive pricing to cut Iraqs possible margin on oil sales.
But what has really ignited the scandal was the publication by the Iraqi al-Mada newspaper in January of a list of 270 politicians, journalists, businessmen and even a UN official who were allegedly given vouchers to buy Iraq oil.
There are some doubts about the veracity of the list, but it nevertheless includes powerful figures in key UN powers, such as Russia and France, as well as a range of Middle Eastern countries. Among the alleged recipients are the Russian Peace and Unity Party of President Putin, as well as the Russian Communist Party and companies linked to the party of Vladimir Zhirinovsky, a Russian nationalist. Charles Pasqua, the former French Interior Minister, and a former French ambassador to the UN are also on the al-Mada list. Also named was President Megawati of Indonesia, who is said to have received one million barrels as the daughter of President Sukarno, and one million barrels as Megawati.
Recipients of oil vouchers did not have to trade the oil themselves. They could merely sell the vouchers to oil traders for 10 to 30 cents a barrel.
A good example of how the system was used to peddle influence is the case of Shakir Khafaji, one of two Iraqi-American businessmen on the list. Mr Khafaji admitted to the Financial Times last week that he had been awarded oil allocations by the Saddam regime, and sold them to an Italian firm on his familys behalf. It was Mr Khafaji who provided $400,000 to fund an anti-sanctions documentary by Scott Ritter, the former UN weapons inspector.
The UNs own investigation, led by Paul Volcker, the former Federal Reserve chairman, is focusing initially on allegations against Benon Sevan, the Cypriot Armenian UN official who ran the Oil-for-Food programme.
A Mr Sevan who appeared on the al-Mada list was allegedly allocated 14.3 million barrels of crude, of which 7.291 million were actually lifted.
But Mr Sevan, who has been asked to postpone his retirement while the investigation is conducted, has denied the charge. I should like to state that there is absolutely no substance to the allegations made in a local Iraqi newspaper . . . that I had received oil or oil moneys from the former Iraqi regime, he said.
The ABC television network reported this week, citing US and European intelligence services, that three unnamed UN officials had taken bribes from Saddam.
The UN Oil-for-Food programme provided Saddam Hussein and his corrupt and evil regime with a convenient vehicle through which he bought support internationally by bribing political parties, companies, journalists and other individuals of influence, Claude Hankes-Drielsma, a British consultant for the Iraqi Governing Council, told Congress this week.
This secured the co-operation and support of countries that included members of the Security Council of the UN.
KEY PLAYERS
KOFI ANNAN: UN Secretary-General since January 1997, a month after the first Iraqi oil was exported under the Oil-for-Food programme.
PAUL VOLCKER: Former chairman of the US Federal Reserve and influential architect of American economic policy. Appointed to head UN investigation.
CLAUDE HANKES-DRIELSMA: British businessman co-ordinating the Iraq Governing Councils investigation into the Oil-for-Food scandal.
BENON SEVAN: Director of the Oil-for-Food programme from October 1997. Denies accusation of taking bribes from Saddam.
CHARLES PASQUA: Former French Cabinet minister, denies accusation in an Iraqi newspaper that he received oil bribes.
No more UN for US-list
If people want on or off this list, please let me know.
Perhaps so, but not in the halls of our own elite news organizations. Have any news organizations other than Fox and a handful of newspaper reports paid the slightest attention to this critical story? Heck no! They are too busy covering such important matters as Michael Jackson, Kobe Bryant, Scott Peterson, Richard Clarke, that has-been Bob Woodward, and such, in between demanding that our President apologize for something anything.
How is it that Dan Rather managed to get interviews with Saddam? And remember the news that came out awhile ago about how CNN knew the truth about what was going on in Iraq but looked away so they could keep their news bureau there?
At least in the UK, and across the political board there.
Here in the US I've noticed something. No broad coverage and a reticence from many "liberal" media to touch the story.
And someone is feeding the Dem politicians contrary talking points. I've noticed some trying to frame the issue as a "Chalabi" matter - casting doubts on the Al Mada story by stating that paper is controlled by Ahmad Chalabi - and who is supported by "neocons" and therefore must be lying and such. (Drielsma responded by noting in the Scotsman that the owner of Al Mada is actually hostile to Chalabi)
I think its a lame attempt. Nevertheless I think it indicates strong French influence on dem foreign policy talking points. Another example - Kerry's odd sttements about the UN. Not just generic statements he wants them involved in Iraq as many others aver, but specific statements that "reconstruction" should be turned over it. In other words, the French requirement not to wield its veto on UN involvement. I think Kerry is being fed these lines rather than conjuring them up himself. Who's feeding him on his staff?
"SEVAN UPDATE: Jeffrey Goldberg, the New Yorker writer, recalls an interview he had with Benon Sevan, the oil-for-food U.N. administrator now under scrutiny for allegedly skimming vast amounts of money in bribes from Saddam's regime. It was in a piece for the New Yorker in March 2002. I quote: .... "Nobody's innocent," he said. "Please don't talk about morals with me.'"
Good question. Here's an article that might help identify some potential suspects:
Kerry is shaping his foreign policy: His network of experts spans a range of opinions 4/11/04
[SNIP]
Early speculation about who might serve as Kerry's secretary of State centers mostly on candidates who fit that description: Richard Holbrooke and Sandy Berger, former top officials in the Clinton administration; Sen. Joseph R. Biden Jr., D-Del., the ranking Democrat on the Foreign Relations Committee; and more distantly, Sen. Chuck Hagel, R-Neb., whose commitment to traditional alliances now place him much closer to the center of thinking in the Democratic than the Republican Party.
[SNIP]
The roster of senior national security advisers his campaign touts names such as Madeleine Albright and William Perry, secretary of State and Defense, respectively, under Clinton strikes many Democratic experts as largely generic. Some insiders say many names in the group have had little role in the campaign. Only a few, such as former Sen. Gary Hart, D-Colo., have long-standing ties to Kerry himself. Adding to the uncertainty over his direction, the campaign has effectively delegated the process of defining foreign policy alternatives on many issues to the Alliance for American Leadership, a Democratic group that organizes task forces of party thinkers on world affairs. Kerry, after serving on the Senate Foreign Relations Committee for 19 years, has placed much less emphasis on identifying a formal team of foreign policy gurus than candidates Bill Clinton in 1992 or George W. Bush in 2000.
[SNIP]
Probably the closest analogue to Bush's Vulcans have been a group of Kerry advisers who hold a weekly conference call directed by Rand Beers, the campaign's "national security and homeland security coordinator." That group has included Lee Feinstein, the former deputy director of policy planning at the State Department, and Joe Wilson, the former diplomat whose report to the CIA challenged Bush's claim that Iraq was seeking uranium in Africa.
Well, former Ambassador Wilson is on Kerry's staff and he is a francophile... has connections to the French bureaucracy via his former wife. Whenever he bleated to the press in the past, his appearance was associated with a cloudburst of anonymous intelligence sources both here and abroad- usually in the UK- setting the stage for him.
Perhaps the feeding tube goes through him.
No doubt there are other francophiles and baathophiles within the Kerry administration who could also be conduits.
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