US: Senate Democrats Fault U.S. in Iraq Oil Scandal

The United States did not do enough to curb corruption by American companies involved in the United Nations' oil-for-food program in Iraq, say Democrats on a Senate committee investigating abuses in the program.

A report by the Democrats released late Monday said the State Department and the United States Treasury's Office of Foreign Assets Control had taken "virtually no steps" to ensure that American companies enforced sanctions against Iraq.

"We have to look in the mirror at ourselves as well as pointing fingers at others," said Senator Carl Levin of Michigan, the ranking Democrat on the Senate's Permanent Subcommittee on Investigations.

The committee is to hold a hearing on Tuesday at which a member of the British Parliament, George Galloway, is to respond to allegations that Saddam Hussein gave him the rights to export 20 million barrels of oil under the oil-for-food program. Mr. Galloway has called the allegations "absurd."

The report presented Monday indicates that American imports of Iraqi oil helped finance about 52 percent of clandestine deals carried out illegally under the oil-for-food program at the time when Iraq was under United Nations sanctions.

The report looked at kickback allegations against a Texas company, Bayoil USA, which was indicted in the investigation of the $67 billion oil-for-food program. The program allowed Iraq to sell oil to buy civilian goods for its people living under United Nations sanctions.

Bayoil executives pleaded not guilty last month to charges the company was part of a scheme to pay millions of dollars in kickbacks to Mr. Hussein in exchange for oil deals.

Records kept by the Iraqi Oil Ministry's State Oil Marketing Organization showed that Iraq collected about $228 million in surcharges from September 2000 to September 2002, the report said.

It contends that Bayoil "facilitated" about $37 million in illegal surcharges to Mr. Hussein and then engaged in lobbying efforts to influence the price of Iraqi oil and to oppose American efforts to stop the surcharges.

"Bayoil engaged in this misconduct for nearly two years, from 2000 to 2002, without attracting meaningful oversight from any U.S. agency," the report said.

The report said questions raised by United Nations oil observers about Bayoil's oil-for-food activities produced no American response. Asked about the report, the State Department said it could not comment on a report it had not seen.

The company's lawyer said she would respond later to allegations made against Bayoil in the Democrats' report.

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