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 Iraq’s 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 Saddam’s regime used oil to bribe politicians, political parties, journalists and a leading UN official.
The inquiries are also examining Saddam’s 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 Iraq’s 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 organisation’s 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 Council’s 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 UN’s 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 Iraq’s 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.
Iraq’s 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 Iraq’s 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 family’s behalf. It was Mr Khafaji who provided $400,000 to fund an anti-sanctions documentary by Scott Ritter, the former UN weapons inspector.
The UN’s 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 Council’s 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.
Pretty much every power-hungry douchebag the world has to offer has an interest in getting Bush out of office, and by extension, an interest in helping Kerry legally and illegally as required.
As the most important records are being held by a French bank
it is not too likely Volcker will have access to them.
You want me to volunteer Joseph C. Wilson IV's name, don't you?
Alright. I will. Ex-Amb. Joseph C. Wilson IV is the most likely conduit of French foreign policy "suggestions" to the Kerry campaign. He is a.) known to be a Francophile ("wears a beret when it rains") and b.) his former wife, Jacqueline, was a French foreign service bureaucrat (unless Cultural Attache = Intelligence).
The French have infiltrated their very own taupe into the Kerry campaign. Actually, though, they're probably getting a twofer -- Wilson also has a set of control wires leading to the Saudi embassy.
The point is, you can bet Wilson isn't feeding Kerry lines that are in America's best interest.
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