Saddam got $1.8B in UN scandal
October 27, 2005
Saddam got $1.8B in UN scandal
UNITED NATIONS (CP) - Investigators of the UN oil-for-food program issued a final report Thursday that accused more than 2,200 companies, and some politicians, of colluding with Saddam Hussein's regime to bilk the operation of $1.8 billion US.
The 623-page document was a scathing indictment that exposed the global scope of a scam that allegedly involved such name-brand companies as DaimlerChrysler and Siemens AG, as well as a former French UN ambassador, a firebrand British politician and the president of Italy's Lombardi region.
The report meticulously detailed how the $64 billion program became a cash cow for Saddam and more than half the companies participating in oil-for-food. It blamed shoddy UN management and the world's most powerful countries for allowing it to go on for years.
"The corruption of the program by Saddam would not nearly have been so pervasive if there had been diligent management by the United Nations and its agencies," said Paul Volcker, a former U.S. Federal Reserve chairman who led the investigation.
Volcker and many countries said the report underscored the urgent need to reform the United Nations. His earlier reports have already led to criminal inquiries and indictments in the United States, France, and Switzerland.
The investigators found that companies and individuals from 66 countries paid illegal kickbacks using a variety of methods, and those paying illegal oil surcharges were from 40 countries.
Canadian firms appeared to have played a minor role: a handful were mentioned but actual amounts cited totalled about $130,000.
Most of the contracts went to Russian and French companies and individuals, who were rewarded for their governments' outspoken opposition to the sanctions.
The oil-for-food program, which ran from 1996-2003, allowed Iraq to sell oil provided most of the money went to buy humanitarian goods. It was launched to help the Iraqi people cope with UN sanctions imposed after Saddam's 1990 invasion of Kuwait.
But Saddam, who could choose the buyers of Iraqi oil and the sellers of humanitarian goods, corrupted the program by awarding contracts to - and getting kickbacks from - favoured buyers.
Volcker's $38 million investigation had earlier faulted UN Secretary General Kofi Annan, his Canadian deputy Louise Frechette, and the Security Council for tolerating corruption and doing little to stop Saddam's manipulations.
The final report says there were two main ways they did it: through kickbacks paid for humanitarian contracts for spare parts, trucks, medical equipment and other supplies; and surcharges for oil contracts. Most of the illicit income - more than $1.5 billion - came from the humanitarian contracts.
The contracts of two Calgary-based companies were listed as having involved "after-sales service fees" - kickbacks - to Iraq.
The report said $15,272 in such fees was paid in a contract with Kvaerner Process Systems, which supplied electrical and oil equipment and spare parts; and $115,786 was paid in a deal involving Maloney Industries Inc., a supplier of well-potential testing skids.
Simmons Drilling (Overseas) Ltd., was listed as having faced a requirement to pay so-called "inland transportation fees" but no specific information was available on any payment.
The report said there was no response from Kvaerner when queried. Maloney and Simmons denied making payments to Iraq in violation of the program, the report said.
A call to Kvaerner Thursday was not returned immediately. Maloney Industries was purchased by Hanover Compressor Company in 2000.
Hanover complied fully with requests for information during the investigation, said Rick Goins, a Hanover spokesman in Houston. "The conclusion is the available evidence does not reflect that Maloney financed a kickback payment or Maloney's officers or employees were aware of or agreed to a kickback payment," he said.
The report emphasized the identification of a company's contract as having been the subject of an illicit payment "does not necessarily mean that such company - as opposed to an agent or secondary purchaser with an interest in the transaction - made, authorized, or knew about an illicit payment."
Several other Canadian companies were mentioned as having had contracts with Iraq, but there was no indication they paid any kickbacks or surcharges.
Among other companies that paid surcharges were South Korea's Daewoo International and three subsidiaries of Siemens AG of Germany, as well as the Brussels, Belgium-based Volvo Construction Equipment.
On the oil side, contractors listed included Texas-based Bayoil and Coastal Corp., Russian oil giant Gazprom, and Lukoil Asia Pacific, a subsidiary of the Russian company Lukoil.
The founder and former chairman of Coastal, Texas oil tycoon Oscar Wyatt, pleaded not guilty Thursday in New York to charges that he conspired to pay several million dollars in illegal kickbacks to Saddam's regime to win contracts through the program.
Volcker's report referred to Wyatt as a "longtime and loyal oil customer of Iraq," the lone exception to an Iraqi ban on selling oil to American companies.
Among individuals, investigators found that Jean-Bernard Merrimee, France's former UN ambassador, received $165,725 in commissions from oil allocations awarded to him by the Iraqi regime. He is now under investigation in France but has denied wrongdoing.
Other so-called "political beneficiaries" included British legislator George Galloway; Roberto Formigoni, the president of the Lombardi region in Italy; and Rev. Jean-Marie Benjamin, a priest who once worked as an assistant to the Vatican secretary of state and became an activist for lifting Iraqi sanctions.
Formigoni, in a statement, said he received "neither a drop of oil, nor a single cent." Galloway also denied the allegations, saying "I've never had a penny through oil deals and no one has produced a shred of evidence that I have."
Vladimir Zhirinovsky, who heads Russia's Liberal Democratic party, and Alexander Voloshin, who at the time was chief of staff in the administration of Russia's president, were also named. Both have denied wrongdoing.
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On the Net: http://www.iic-offp.org/
Saddam got $1.8B in UN scandal
UNITED NATIONS (CP) - Investigators of the UN oil-for-food program issued a final report Thursday that accused more than 2,200 companies, and some politicians, of colluding with Saddam Hussein's regime to bilk the operation of $1.8 billion US.
The 623-page document was a scathing indictment that exposed the global scope of a scam that allegedly involved such name-brand companies as DaimlerChrysler and Siemens AG, as well as a former French UN ambassador, a firebrand British politician and the president of Italy's Lombardi region.
The report meticulously detailed how the $64 billion program became a cash cow for Saddam and more than half the companies participating in oil-for-food. It blamed shoddy UN management and the world's most powerful countries for allowing it to go on for years.
"The corruption of the program by Saddam would not nearly have been so pervasive if there had been diligent management by the United Nations and its agencies," said Paul Volcker, a former U.S. Federal Reserve chairman who led the investigation.
Volcker and many countries said the report underscored the urgent need to reform the United Nations. His earlier reports have already led to criminal inquiries and indictments in the United States, France, and Switzerland.
The investigators found that companies and individuals from 66 countries paid illegal kickbacks using a variety of methods, and those paying illegal oil surcharges were from 40 countries.
Canadian firms appeared to have played a minor role: a handful were mentioned but actual amounts cited totalled about $130,000.
Most of the contracts went to Russian and French companies and individuals, who were rewarded for their governments' outspoken opposition to the sanctions.
The oil-for-food program, which ran from 1996-2003, allowed Iraq to sell oil provided most of the money went to buy humanitarian goods. It was launched to help the Iraqi people cope with UN sanctions imposed after Saddam's 1990 invasion of Kuwait.
But Saddam, who could choose the buyers of Iraqi oil and the sellers of humanitarian goods, corrupted the program by awarding contracts to - and getting kickbacks from - favoured buyers.
Volcker's $38 million investigation had earlier faulted UN Secretary General Kofi Annan, his Canadian deputy Louise Frechette, and the Security Council for tolerating corruption and doing little to stop Saddam's manipulations.
The final report says there were two main ways they did it: through kickbacks paid for humanitarian contracts for spare parts, trucks, medical equipment and other supplies; and surcharges for oil contracts. Most of the illicit income - more than $1.5 billion - came from the humanitarian contracts.
The contracts of two Calgary-based companies were listed as having involved "after-sales service fees" - kickbacks - to Iraq.
The report said $15,272 in such fees was paid in a contract with Kvaerner Process Systems, which supplied electrical and oil equipment and spare parts; and $115,786 was paid in a deal involving Maloney Industries Inc., a supplier of well-potential testing skids.
Simmons Drilling (Overseas) Ltd., was listed as having faced a requirement to pay so-called "inland transportation fees" but no specific information was available on any payment.
The report said there was no response from Kvaerner when queried. Maloney and Simmons denied making payments to Iraq in violation of the program, the report said.
A call to Kvaerner Thursday was not returned immediately. Maloney Industries was purchased by Hanover Compressor Company in 2000.
Hanover complied fully with requests for information during the investigation, said Rick Goins, a Hanover spokesman in Houston. "The conclusion is the available evidence does not reflect that Maloney financed a kickback payment or Maloney's officers or employees were aware of or agreed to a kickback payment," he said.
The report emphasized the identification of a company's contract as having been the subject of an illicit payment "does not necessarily mean that such company - as opposed to an agent or secondary purchaser with an interest in the transaction - made, authorized, or knew about an illicit payment."
Several other Canadian companies were mentioned as having had contracts with Iraq, but there was no indication they paid any kickbacks or surcharges.
Among other companies that paid surcharges were South Korea's Daewoo International and three subsidiaries of Siemens AG of Germany, as well as the Brussels, Belgium-based Volvo Construction Equipment.
On the oil side, contractors listed included Texas-based Bayoil and Coastal Corp., Russian oil giant Gazprom, and Lukoil Asia Pacific, a subsidiary of the Russian company Lukoil.
The founder and former chairman of Coastal, Texas oil tycoon Oscar Wyatt, pleaded not guilty Thursday in New York to charges that he conspired to pay several million dollars in illegal kickbacks to Saddam's regime to win contracts through the program.
Volcker's report referred to Wyatt as a "longtime and loyal oil customer of Iraq," the lone exception to an Iraqi ban on selling oil to American companies.
Among individuals, investigators found that Jean-Bernard Merrimee, France's former UN ambassador, received $165,725 in commissions from oil allocations awarded to him by the Iraqi regime. He is now under investigation in France but has denied wrongdoing.
Other so-called "political beneficiaries" included British legislator George Galloway; Roberto Formigoni, the president of the Lombardi region in Italy; and Rev. Jean-Marie Benjamin, a priest who once worked as an assistant to the Vatican secretary of state and became an activist for lifting Iraqi sanctions.
Formigoni, in a statement, said he received "neither a drop of oil, nor a single cent." Galloway also denied the allegations, saying "I've never had a penny through oil deals and no one has produced a shred of evidence that I have."
Vladimir Zhirinovsky, who heads Russia's Liberal Democratic party, and Alexander Voloshin, who at the time was chief of staff in the administration of Russia's president, were also named. Both have denied wrongdoing.
-
On the Net: http://www.iic-offp.org/
posted by Gerry Surtees at Saturday, October 29, 2005
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