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Most Iraqis and the few foreign visitors to Iraq only get to see the outer walls of Saddam's monuments to his glory. This report provides satellite images that allow Iraqis and the rest of the world to see better how Saddam Hussein spends some of the money that he is able to steal from the national wealth of the Iraqi people.

Palace Construction

Photographic evidence confirms that Saddam Hussein and his regime have sustained a non-stop program of palace building since 1991. Saddam has been spending billions of dollars on the man-made lakes, waterfalls, marble, and other luxuries that make up his palaces and those of his supporters. At the same time, Saddam parades well-intentioned foreigners to gawk at the sick and hungry of Iraq, as he pleads that UN sanctions prevent him from buying or importing his people's most basic needs.

• Among the more notable features of these palaces are: extensive security facilities to protect the regime from its own people; elaborate gardens which require large amounts of water, often in drought-stricken areas; and sophisticated waterfalls and other waterworks using pumps and other infrastructure that the regime says sanctions prevent it from importing for the Iraqi people.

• Saddam ruthlessly protects the extent of his luxury. According to Iraqi opposition sources, Saddam recently ordered the execution of one of the Iraqi architects who worked on presidential palaces in Tikrit, Al-Hillah, Al-Azimiyah, and Al-Wafa. His crime was to describe to friends the sumptuousness and lavishness of Saddam's palaces, and the swimming pools, fish aquariums, and deer farms in the vicinity of some of them. A circular was then sent around to workers in the engineering department of the Presidential Office warning them that the harshest punishment will be inflicted on anyone who talks about the presidential sites, even to family members. Our knowledge of the inside of Saddam's palaces comes from first-hand information from international observers who have traveled to Iraq and visited the palaces.

Palaces and Oil Smuggling
Since the end of the Gulf War, Saddam Hussein has directed and sustained a multi-billion dollar palace construction program while pleading that the UN sanctions keep him too poor to feed and provide health care for his people. While he keeps Iraq's hospital shelves bare and shows them to journalists, Saddam restricts access to the new and ornate palaces to himself and his chosen admirers of any given moment. Moreover, Saddam fits out these monuments with the finest foreign materials -- from golden plumbing to the finest European marble and crystal chandeliers -- smuggled in despite the embargo that Baghdad propaganda falsely claims blocks the import of food and medicine.

Saddam Hussein pays for these palaces with that part of the Iraqi national wealth that he has managed to keep under his control and out of the UN's mandatory oil-for-food program. Through that program, the UN controls how Iraqi oil revenues are spent and compels the regime to invest Iraq's oil wealth for the benefit of its people. But every day that he remains in power, Saddam lets his favored supporters steal hundreds of thousands of barrels of oil from the Iraqi people to enrich themselves, in direct violation of UN resolutions.

Most Iraqis and the few foreign visitors to Iraq only get to see the outer walls of Saddam's monuments to his glory. This report provides satellite images that allow Iraqis and the rest of the world to see better how Saddam Hussein spends some of the money that he is able to steal from the national wealth of the Iraqi people.

Palace Construction

Photographic evidence confirms that Saddam Hussein and his regime have sustained a non-stop program of palace building since 1991. Saddam has been spending billions of dollars on the man-made lakes, waterfalls, marble, and other luxuries that make up his palaces and those of his supporters. At the same time, Saddam parades well-intentioned foreigners to gawk at the sick and hungry of Iraq, as he pleads that UN sanctions prevent him from buying or importing his people's most basic needs.

• Among the more notable features of these palaces are: extensive security facilities to protect the regime from its own people; elaborate gardens which require large amounts of water, often in drought-stricken areas; and sophisticated waterfalls and other waterworks using pumps and other infrastructure that the regime says sanctions prevent it from importing for the Iraqi people.

• Saddam ruthlessly protects the extent of his luxury. According to Iraqi opposition sources, Saddam recently ordered the execution of one of the Iraqi architects who worked on presidential palaces in Tikrit, Al-Hillah, Al-Azimiyah, and Al-Wafa. His crime was to describe to friends the sumptuousness and lavishness of Saddam's palaces, and the swimming pools, fish aquariums, and deer farms in the vicinity of some of them. A circular was then sent around to workers in the engineering department of the Presidential Office warning them that the harshest punishment will be inflicted on anyone who talks about the presidential sites, even to family members. Our knowledge of the inside of Saddam's palaces comes from first-hand information from international observers who have traveled to Iraq and visited the palaces.

Oil Smuggling

Where does Saddam get the billions of dollars needed to build these palaces? Part of it comes from funds he controls directly. Part of it comes from oil produced and exported in violation of UN Security Council resolutions. These resolutions compel Saddam to spend revenues from the sale of Iraq's oil solely for the benefit of the Iraqi people. In order to fund his palace construction and other illicit expenditures, Saddam is smuggling substantial quantities of it abroad.

• The Basrah refinery was put out of operation in Operation Desert Fox in 1998. Iraq has rebuilt it however, and the refinery is operating at near capacity, which is approximately 140,000 barrels per day.

• Under UN Security Council Resolutions and the oil-for-food program, Iraq is permitted to export oil only through the approved facilities in Mina al Baqr in the northern Persian Gulf and via the oil pipeline through Turkey through the port of Ceyhan. The production and export of gasoil from the Basrah refinery is outside the oil-for-food program and a violation of UN sanctions.

• The Iraqi government claims that sanctions prevent it from getting spare parts needed to repair its oil industry and that this is to blame for low production levels. The activities of the Basrah refinery prove that such claims are false. Clearly, Iraq has no problem getting spare parts for its oil industry. The problem is that the regime of Saddam Hussein prefers to produce and export oil illegally, outside the oil-for-food program so that he can control the revenues and use them for his own personal aggrandizement.

•Since repairing the Basrah refinery, Iraq has steadily increased the amount of oil illegally exported via the Persian Gulf. Illicit oil exports averaged about 50,000 b/d for much of 1998, until they ended with the attack on the Basrah refinery in December of 1998. Iraq resumed exports in August of 1999. Smuggling reached 70,000 b/d in December and averaged about 100,000 b/d in January 2000. We estimate that Baghdad has earned more than $25 million in January alone. There is no evidence that any of this money has been spent to improve the humanitarian situation of the Iraqi people.

Support for the Mujahedin-e-Khalq (MEK)

The Oil-for-Food program keeps revenues out of the hands of Saddam Hussein and ensures that they are spent on the needs of the Iraqi people. In an earlier section, this report provided photos of how Saddam is using revenues from smuggled oil to build palaces for himself and his regime cronies at a cost of billions of dollars. This section shows another way that Saddam Hussein spends money that he controls: on state-sponsored terrorism.

The satellite photograph shows a new headquarters complex that Saddam Hussein has built for the Mujahedin-e-Khalq. The complex is located in Falluja, approximately 40 kilometers west of Baghdad. Construction was begun in late 1998 and is still going on. The site covers approximately 6.2 square kilometers and includes lakes, farms, barracks, administrative buildings and other facilities. The facility can accommodate between 3,000 and 5,000 MEK members. The inset shows the MEK's headquarters complex, which is used to coordinate the activities of the organization throughout Iraq and to plan attacks against targets in Iran and elsewhere.

Saddam Hussein spends millions in funds that he controls to support terrorism and threaten his neighbors. Not to help the people of Iraq.

Finally, there is also a terrible irony in all this. The revenues Saddam Hussein used to pay for this new headquarters complex for the Mujahedin-e-Khalq come in part from gasoil smuggling through Iranian waters. As part of this smuggling activity, corrupt Iranian officials are lured by the promise of easy profits to allow ships to transit Iranian territorial waters en route to markets for the smuggled gasoil. Without this cooperation, Saddam could not smuggle gasoil, the profits from which are used to support terrorist attacks against Iranian soil.

This new headquarters for a terrorist organization suggests what is in store for Iraq's neighbors if Saddam gets his hands on more Iraqi oil revenues. With regard to Iraqi oil sold under the Oil-for-Food program, the net proceeds of Iraqi oil sales are going to meet the needs of the Iraqi people, not the needs of terrorists.

Fact Sheet on the Mujahedin-e-Khalq

• Formed 1960s by college-educated children of Iranian merchants. Sought to counter what it perceived as excessive Western influence in the Shah's regime. Has developed into the largest and most active armed Iranian opposition to the present government. History studded with anti-Western activity, and attacks on the interests of the clerical regime in Iran and abroad.

• During the 1970s staged terrorist attacks inside Iran and killed several US military personnel and civilians working on defense projects in Tehran. Supported the takeover in 1979 of the US Embassy in Tehran.

• In 1987, MEK driven from HQ in France. Moved base of operations to Iraq. In return for financial, logistical and material support from Saddam, MEK forces have assisted Saddam in the repression of Kurds and other minorities in northern Iraq. MEK in Iraq estimated to possess approximately a division's worth of heavy equipment (tanks, armored personnel carriers and artillery) Continually conduct raids, bombings and mortar attacks in Iran.

• In April 1992 conducted attacks on Iranian embassies in 13 different countries. Conducted numerous attacks in Iran, including three explosions in Tehran in June 1998 that killed three persons, and the assassination of Asadollah Lajevardi, the former director of the Evin Prison.

• In April 1999, the MEK assassinated Chief of the Iranian Armed Forces General Staff, General Shirazi.

• According to press reports, MEK has spent the last few weeks stepping up its attacks on Iran and Iranians. On Monday, March 13, launched a mortar attack against a residential neighborhood in north Tehran, near the headquarters of the Iranian Revolutionary Guards. Four people injured. MEK admitted responsibility. In January, Iran claimed the Mujahedin-e-Khalq killed 3 villagers and wounded 5 in an attack on the village of Chalsarab in Ilam province. In February, the MEK admitted launching 12 attacks in Iran, one of which we know killed 1 and injured 6 in Tehran near the presidential palace.