IRAQ: Corruption Probe Names Thousands Engaged in Iraq Oil-for-Food Program

Hopes are the list will provide governments and investigators the needed data to pursue their own evaluations of the controversial program.
Publisher Name: 
The Washington Post

UNITED NATIONS, Oct. 22 -- A U.N.-appointed investigator probing corruption in the world body's oil-for-food program in Iraq published today a list of all 4,734 companies that traded with Saddam Hussein's government through the arrangement. The 300-page list provides the most comprehensive public account to date of Iraq's business dealings under the former program, under which Iraq was allowed to sell oil to purchase humanitarian supplies.

Paul A. Volcker, the former U.S. Federal Reserve chairman who heads the investigation, said he hoped the list would provide governments and investigators the data required to pursue their own evaluations of the program. He also noted that it was legal for the companies listed to trade with Iraq through the program.

Volcker also said his team is preparing to begin discussions with former U.S. weapons inspector Charles A. Duelfer, whose recent report on Iraqi weapons of mass destruction detailed Iraq used the oil-for-food program to take in more than $1.7 billion in kickbacks from companies. Duelfer alleged that Iraq demanded that firms exporting Iraqi oil after September 2000 were required to deposit kickbacks in Iraqi bank accounts in Jordan and Lebanon.

Volcker said his investigators had made "substantial progress" in tracking down and "assessing the allegations of maladministration and corruption" in the program, but he declined to provide any details. He would not produce a substantial report until the fall of 2005, he said.

U.N. Secretary General Kofi Annan said revelations of misconduct in the program had damaged the United Nations. "That's why we want to get to the bottom of it and clear it as quickly as possible," he said.

Volcker said the French bank BNP, which handled most of the U.N. oil-for-food business, has not cooperated adequately with his investigators, but he said he expected that the dispute will be resolved. He also said the accounting firm of Ernst & Young, which is conducting its own probe for the Iraqi Board of Supreme Audit, had withheld vital information.

Robert S. Bennett, who is acting as BNP's lead counsel, said the French bank was "fully cooperating" with Volcker's panel. "I really think there must be this disconnect, because we have from time to time had difficulty clearly understanding what they want," he said. Charles Perkins, a spokesman for Ernst & Young, said, "All parties involved are in continuing discussions to work out the sharing of documents."

The latest data provide the most authoritative account to date of Iraq's business dealings. Firms based in Russia, France, Switzerland, Britain and Turkey purchased about $32 billion of Iraqi crude through the U.N. oil-for-food deal, about half of all oil sold by Hussein's government under the U.N. program, according to the list. Four U.S. companies are listed as having purchased $482 million worth of Iraqi crude.

Russian oil traders captured nearly one-third of Iraq's oil export market. Three Russian companies, Zarubezhneft and J.S.C. Alfa Eco and an unnamed company, bought more than $7.3 billion in oil. Two French firms, Total International Ltd. and SOCAP International Ltd., bought more than $3 billion. And a London-based Chinese firm, Sinochem International Oil London Co., bought $2.2 billion in crude.

The list includes direct sales to Texaco, which bought $28.3 million in oil, and Mobil Export Corp., which paid $152 million. Purchases by Chevron Products Co. and Phoenix came to $140.2 million and $162.25 million, respectively. The overall U.S. stake in Iraq's oil market was far greater. But U.S. oil companies, who consumed more than 40 percent of Iraq's exported oil, were forced to purchase through foreign traders.

AMP Section Name:War & Disaster Profiteering