UNITED NATIONS (Reuters) – The independent panel investigating the U.N. oil-for-food program for Iraq has issued a report that prosecutors in 66 countries can use against 2,200 companies accused of diverting $1.8 billion (1 billion pounds) to Saddam Hussein’s government.
The 623-page survey on Thursday exposed how more than half the companies doing business with Iraq wittingly or unwittingly fed Saddam’s need for cash through straight bribes or surcharges on oil sales.
“The (U.N.) secretariat, the Security Council and U.N. contractors failed most grievously in their responsibilities,” said Paul Volcker, the former U.S. Federal Reserve chairman, who headed the probe, which issued the last of five reports.
The list included firms from Vietnam to the United States as well as European giants DaimlerChrysler , three subsidiaries of Siemens and Volvo. All companies and traders contacted by the panel denied the allegations except for one oil firm and 26 suppliers of goods, the report said.
And the document castigated French bank BNP-Paribas, which managed funds for the $64 billion program, for a host of irregularities, from its fees to its failure to expose wrongdoing. The bank denied any wrongdoing.
The humanitarian program, which began in 1996 and ended in 2003, was designed to ease the impact on ordinary Iraqis of U.N. sanctions, imposed when Baghdad’s troops invaded Kuwait in 1990. Iraq was allowed to sell oil in order to buy food, medicine and many other goods.
South African Judge Richard Goldstone, another commissioner of the U.N.-established Independent Inquiry Committee, said archives would be turned over to the United Nations but also shared with law enforcement authorities.
“Anything that we are able legally and morally to share with a prosecutor or authority of any country, we will be more than willing to do that,” Goldstone told Reuters.
Some nations, including the United States, Britain, France and Switzerland have initiated prosecutions. Texas oil tycoon Oscar Wyatt, former chairman of founder of Coastal Corp., pleaded not guilty Thursday in New York to charges that he conspired to pay several million dollars in kickbacks.
But Peter Eigen of the Berlin-based Transparency International, which traces corruption around the world, was sceptical whether many prosecutions would follow.
He said it was “sheer hypocrisy” for rich countries to demand stringent accountability from poor nations “without holding their companies to those same standards.”
Russia’s Role
While $1.8 billion was skimmed from the U.N. program, the report said Saddam made nearly $11 billion in smuggled oil sales outside of the program, often with the knowledge of the U.N. Security Council, which had a supervisory role.
Russia, which opposed sanctions, was the preferred customer and got $19 billion in oil deals. The government took an active role in helping to pay the fees through the Iraqi Embassy in Moscow and in nine other countries, the report said.
Among the individuals said to have received commissions from Iraq from oil allocations were Jean-Bernard Merimee, France’s former U.N. ambassador, now under investigation. The report said he had acknowledged involvement.
But all other “political beneficiaries” denied wrongdoing, including MP George Galloway; Roberto Formigoni, president of the Lombardi region in Italy; and the Rev. Jean-Marie Benjamin, a priest who was once an assistant to the Vatican’s secretary of state.
Also on the list were Vladimir Zhirinovsky, leader of Russia’s ultranationalist Liberal Democratic Party; Alexander Voloshin, a former chief of staff in the Kremlin, and Charles Pasqua, a former French interior minister.
BNP-Paribas was accused of a conflict of interest in representing many traders doing business with Iraq and disguising clients and shell companies to the United Nations.
One such case was a company founded by Marc Rich, the fugitive billionaire oil trader. The firm, Marc Rich & Co., was also accused of paying illegal surcharges, which it denied.
“Although there is no evidence that BNP new or approved the use of its own facilities to pay illegal surcharges, BNP was uniquely position to probe such payments — and failed to do so,” the report said. BNP disputed the findings.
The bulk of the illicit oil contract payments began when Iraq started levelling surcharges. A group of four trading companies financed and lifted more than 60 percent of Iraqi crude oil in the market from December 2000 to mid-2001, when the United States and Britain took measures to stop them.
Those trading companies were Bayoil, based in Texas and the Bahamas, and three Swiss companies: Taurus, Vitol, and Glencore, the report said.
Other oil companies accused of paying hefty illegal fees to Iraq included Russian oil giant Gazprom, and Lukoil Asia Pacific, a subsidiary of the Russian company Lukoil.
Source: Reuters
