How the UN, France, and Russia bribed Saddam

[Rudey]

Well look at the French took in that blood money...yay.

http://www.nytimes.com/2004/10/13/op...13safi.html?hp

Duelfer to France: J'accuse!
By WILLIAM SAFIRE

Published: October 13, 2004

Powerful officials and their profiteering friends in France had a reason to try to stop the U.S. from overthrowing Saddam Hussein: they were pocketing billions in payoffs through a United Nations oil-for-food front.

That's the import of the Duelfer report. This nonpartisan investigation team found not only documents "giving economic favors to key French diplomats or individuals that have access to key French leaders," but also got Saddam's mouthpiece, Tariq Aziz, to sing about their purpose: "According to Aziz, both parties understood that resale of the oil was to be reciprocated through efforts to lift U.N. sanctions, or through opposition to American initiatives within the Security Council."

Charles Duelfer's group put on the public record the name of Charles Pasqua, France's former interior minister and now a senator. Pasqua denied all to the BBC and fingered ex-associates: "maybe other former ministers are involved."

The former French ambassador to the U.N., Jean-Bernard Mérimée, is listed as receiving vouchers for 11 million barrels of oil from Saddam, the proceeds from which would beat a diplomat's pay. Another of President Jacques Chirac's friends receiving Saddam's U.N. largesse is Patrick Maugein, "whom the Iraqis considered a conduit to Chirac," according to the report.

Maugein, 58, whose association with Chirac has occasionally been chronicled by the French journalist Karl Laske, is chairman of Soco, an oil company active in Vietnam. He's down for 13 million barrels. French oil companies Total and Socap got about 200 million barrels.

A name that keeps coming up in my poking around is Marc Rich, the American billionaire who was for many years a fugitive, until blessed with one of Bill Clinton's midnight pardons. Rich's company Trafigura, spun off from the Swiss-based Glencore, and its possible dealings with outfits like Jean-Paul Cayre's Ibex have excited the interest of many of the sleuths I've spoken to.

France's diplomats here are apoplectic, calling the unconfirmed Duelfer reports "unacceptable." They note in high dudgeon that U.S. firms involved in the U.N.'s corrupt caper are not named by the U.S. team and deride our excuse about "privacy laws."

However, within 24 hours of the damning report's issuance, Judith Miller and her colleagues had the names of the U.S. companies involved - Chevron, Mobil, Texaco, Bay Oil and one Oscar Wyatt Jr. of Houston, who may have profited by $23 million - on the front page of The New York Times. (Will our runaway anti-press prosecutor try to clap Judy in jail for protecting her confidential government sources on this one, too?)

The Senate's Permanent Subcommittee on Investigations has issued seven subpoenas and a dozen hard-to-ignore chairman's letters from Senator Norm Coleman to companies in the U.S., as well as to multinationals doing business here. I hear the committee has met no legal resistance so far. Ben Pollner, head of Taurus Oil, active in Iraq all through the oil-for-food fiasco, stiffed Manhattan D.A. Robert Morgenthau's men. (Pollner tells me his dealings were legal, but he clammed up to investigators because he remembers Martha Stewart.)

What also miffs the French is that Russian officials and oligarchs were able to rip off even more than France's predators. Vladimir Zhirinovsky made out like a bandit when his party had some power; so did "the office of the Russian president" and the Peace and Unity Party, both headed by the unmentionable Putin.

As the hares zoom by, Paul Volcker, the U.N. investigative tortoise, tells his people to forget the French and Russians and to concentrate on Kofi Annan's right-hand man, Benon Sevan, and Kofi Annan's son's relationship with Cotecna, the U.N.'s see-no-evil "monitor," The White House is wringing its hands because it needs the U.N.'s blessing on the Iraqi election, and John Kerry must be praying not to be asked about this in tonight's debate.

If I were a French reporter and wanted to lose my job at Chirac's Le Figaro in a hurry, I would drop in at 24 Boulevard Princess Charlotte in Monaco and ask if Patrick Maugein, Rui de Souza or Mario Contini has dropped by to see if Toro Energy and the African Middle East Petroleum company are still there? If that's a blind alley, try the casino.

-Rudey

[Rudey]

http://www.nytimes.com/2004/11/15/op...?oref=login&hp

The New York Times

November 15, 2004

U.N. Obstructs Justice
By WILLIAM SAFIRE

Washington — "I'm angry that we find the U.N. proactively interfering with our investigation," Senator Norm Coleman, chairman of the Senate Permanent Subcommittee on Investigations, informed Lou Dobbs on CNN, "by telling certain folks not to cooperate with us." He repeated for emphasis his sharp response to Secretary General Kofi Annan's "interfering with our ability to get information we need" about the oil-for-food scandal.

Judith Miller of The Times had revealed that the Minnesota Republican, joined by ranking Democrat Carl Levin, sent a letter noting Annan's four-month foot-dragging and that "the U.N. is hindering our efforts to obtain relevant documents."

If legislative investigators were prosecutors, the name of the game Annan and his enablers are playing would be called "obstruction of justice."

The principal investigating body of the Senate is not helpless. Today witnesses from Treasury and C.I.A., as well as its own investigators, will present evidence that the huge rip-off engineered by Saddam Hussein - with the connivance of corrupt U.N. officials and companies protected by Security Council members like Russia and France - was even greater than the $10 billion figure estimated by our G.A.O. Going back to 1991 and including the predecessor to oil-for-food, an outside source tells me that the U.N.-maladministered profiteering reached $23 billion. Such heavy spending affects U.N. votes.

The Senate, as it returns to lame-duck work this week, will subpoena evidence through the U. S. connections of companies like Lloyd's Register Inspection Ltd., which Annan's consultant, Paul Volcker, has so far "proactively" kept from cooperating. And there is the budget option: if the U.N. persists in obstruction, the U.S. can re-examine its contribution to an unaccountable organization.

But the Congress is not dependent on one Senate committee alone. In the House, Henry Hyde's International Relations Committee is holding hearings Wednesday. Though there will be overlap - Charles Duelfer will be busy explicating the oil-for-food section of his C.I.A. report this week - its emphasis has been on following the illicit money through the banking system.

BNP Paribas, the European bank eager to expand in the U.S., has cooperated with "friendly subpoenas" that Annan's aides could not stop through their "gag letters"; its present and past officials will testify about its thousands of letters of credit. But what about "know your customer" rules? What did our Federal Reserve officials know about sloppy banking procedures, and how long did it take for those regulators to put suspect banks under supervising action? The Fed's Herbert Biern may have some explaining to do about the failure of financial and diplomatic oversight.

If the U.N. stonewalling continues this week, Chairman Hyde's patience could at last wear thin; as former chairman of Judiciary, he knows something about criminal referrals. Such an action directed at recalcitrant bankers, brokers or U.N. inspection contractors would at last get high-level attention at the Justice Department, where U.S. attorneys have been tediously poking around U.S. oil companies for leads on kickbacks.

Kofi Annan's longtime right-hand man, Benon Sevan, headed the U.N.'s Office of the Iraq Program; he has been retired but has been vociferously denying wrongdoing ever since his name appeared on a list of beneficiaries of Saddam's largesse in the form of vouchers for oil deals.

Annan's obstruction of outside investigations has strong support within the U.N. members whose citizens are most likely to be embarrassed by revelations of payoffs: Russia, France and China lead all the rest. He has dutifully continued to align himself with their interests by declaring the overthrow of Saddam "illegal" and recently denouncing our attack on the insurgents in Falluja. Perhaps he thinks that this confluence of national interest in cover-up - along with the unwillingness of most media to dig into a complicated story - will let his stonewalling succeed. He reckons not with an insulted Congress.

Sad to see is the secretary general's manipulative abuse of Paul Volcker. Here is a former central banker so confident of his hard-earned reputation for integrity that he cannot see how it is being shredded by a web of sticky-fingered officials and see-no-evil bureaucrats desperate to protect the man on top who hired him to substitute for - and thereby to abort - prompt and truly independent investigation.

-Rudey

[Rudey]

So the question is did Chirac, Putin, and Annan bathe together in Iraqi blood or did they do it separately?


The New York Times

http://www.nytimes.com/2004/11/16/politics/16food.html

THE OIL-FOR-FOOD PROGRAM
Panel Pegs Illicit Iraq Earnings at $21.3 Billion

By JUDITH MILLER

Published: November 16, 2004


WASHINGTON, Nov. 15 - A Senate committee investigating the United Nations oil-for-food program for Iraq estimates that during 13 years of international sanctions, Saddam Hussein's government made at least $21.3 billion illicitly - more than double previous government estimates.

Senator Norm Coleman, the Minnesota Republican who is chairman of the Senate's Permanent Subcommittee on Investigations, said at a subcommittee hearing on Monday that he doubted that fraud and abuse on this scale could have gone undetected by senior United Nations officials or their American counterparts. Because it was unknown where the illicit money ended up, he said, he was worried that it may be helping to finance the insurgency in Iraq.

The United Nations aid program for Iraq ran from 1996 to 2003, easing some of the effects of the sanctions by allowing the country to make monitored sales of oil and use the money to purchase aid like food and medicine. Since then, there has been growing evidence that Mr. Hussein's government exploited the program with a campaign of illicit oil sales, illegal surcharges and kickbacks, as well as bribes aimed at lifting sanctions.

Senator Coleman said the huge scale of fraud and theft while United Nations penalties were in effect had created a "dark stain" over the world organization that raised questions about whether it could put in place and monitor any sanctions.

Questions about how much money was siphoned away from the oil-for-food program, and the money's ultimate use, were particularly troubling, he added, because of allegations that Benon V. Sevan, who was in charge of the United Nations program, had benefited from special allocations of oil from Mr. Hussein.

Mr. Sevan has repeatedly denied any wrongdoing.

However, Charles A. Duelfer, the top American weapons investigator in Iraq, who was the Senate panel's first witness, told the committee on Monday that based on Iraqi documents and what Iraqi officials had told him, he believed that Mr. Sevan had been given 13 million barrels of oil in special oil allocations.

The subcommittee's new higher estimates of Iraq's illicit gains are based on evaluations of earlier studies by the Government Accountability Office, the Pentagon, the Congressional Budget Office and Mr. Duelfer's Iraq Survey Group, along with new information and a million pages of documents secured by the Senate panel over its seven-month investigation.

Specifically, the panel estimated that Iraq made $3.9 billion from oil smuggling before the oil-for-food program was created in 1996; $4.4 billion in kickbacks on aid contracts; $241 million in illegal surcharges on the sale of Iraqi oil; $2.1 billion from the sales of substandard goods under the program; $9.7 billion from oil smuggling under the program; $405 million from abuses in aid contracts in the northern, mostly Kurdish, part of Iraq that Mr. Hussein did not directly control; and $403 million from the investment of its illicit income overseas.

The documents, some of which were released Monday, also show how Iraqi officials, foreign companies, politicians and journalists benefited from Mr. Hussein's efforts to undermine support for sanctions and secretly gain money to build palaces and buy weapons.

Senator Carl Levin, Democrat of Michigan, the panel's ranking minority member, said three-quarters of Iraq's illicit income came from trade protocols with Jordan and Turkey that the Clinton and Bush administrations had known about and "winked at" because support from those countries was vital.

But Mr. Duelfer, in testimony before the Senate panel, insisted that although the protocols provided Iraq with illicit income, Mr. Hussein was successfully using illegal proceeds specifically from the oil-for-food program to undermine support for the sanctions that the United Nations imposed after Iraq's 1990 invasion of Kuwait.

Mark L. Greenblatt, a counsel for the Senate panel, said that beginning in 1998, Mr. Hussein had tried to "manipulate the typical oil allocation process in order to gain influence throughout the world." Rather than let traditional oil companies buy oil, he said, Mr. Hussein "gave oil allocations to officials, journalists and even terrorists, who then sold their allocations to the traditional oil companies in return for a sizable commission."

A document released Monday showed such payments to a Syrian journalist, Hamidah Nana, who said in an interview in 2003 that she was working hard to get sanctions against Iraq lifted. When Ms. Nana made the statement, Mr. Greenblatt said, she had already received oil allocations totaling 10 million to 12 million barrels of oil, and had made a profit, according to Iraq's Oil Ministry, of $1.4 million from transfer of the vouchers to a Panama-based company.

Steven Groves, another of the subcommittee's counsels, said documents showed that Mr. Hussein had demanded kickbacks from companies who were supplying Iraq with food and medical aid. His presentation focused on payments by French and United Arab Emirates-based subsidiaries of the Weir Group, of Glasgow, which produces industrial valves for the oil industry.

-Rudey

[PhiPsiRuss]

They make a lovely couple.

[Rudey]

Look how the blood stains their pretty diplomatic hands.



The New York Times

http://www.nytimes.com/2004/11/29/op...?oref=login&hp

'My Son, My Son'
By WILLIAM SAFIRE

Published: November 29, 2004

Washington — Thanks to Claudia Rosett, an enterprising reporter writing in The New York Sun, the world now knows that some information put out by Secretary General Kofi Annan about his son's involvement with a Swiss inspection company at the heart of the U.N. oil-for-food scandal is untrue.

At a luncheon at "21" in New York this summer, Annan came over to me to complain politely that my series suggesting U.N. maladministration was unfair. When I asked about the consultant fee paid to his son Kojo that may have influenced the award of a U.N. contract to Cotecna Inspection, the secretary general said that the allegation (originally reported in The Sunday Telegraph in London) had been "thoroughly investigated" by the U.N. and there was "nothing to it."

He later insisted that ours was a "private conversation" (though no off-the-record restriction was requested or given), but this denial was consistent with Kofi's public statement in April about the contract award: "Neither he nor I had anything to do with the contracts for Cotecna." Note the plural "contracts" - after a low-ball bid, a later contract was much more lucrative - and his clear indication that his son joined him in denial.

The story put out by the U.N. Secretariat at the time was that the son, Kojo, had resigned from Cotecna just weeks before the U.N. switched its fast-growing inspection business to the Swiss firm. Though such a timely termination looked fishy on its face, the absence of post-contract payments to Kofi's son was the basis for the U.N.'s claim that there had been no conflict of interest or nepotism.

Last week the truth was outed. The U.S. attorney's office in New York is in competition with the U.N.'s "independent" investigation, whose Paul Volcker - while stonewalling angry Congressional investigators - has grand jury help from the Manhattan district attorney's office. I suspect a subpoena forced Kojo to hire a lawyer, whom reporter Rosett tracked down and The Sun had its first world beat.

The lawyer confirmed that Kojo received payments of $2,500 per month for four years after he supposedly severed his relationship with Cotecna - up to February of this year, when Iraqis blew the lid off the U.N.-Saddam-French-Russian conspiracy.

When confronted with the falsity of previous U.N. denials, the secretary general's spokesman, Fred Eckhard, pleaded: "There is nothing illegal in this." You see, um, the payments to Annan's son were part of an "open-ended no-compete contract." After all, what could be illegal about getting paid for not joining a competing inspection company, which Cotecna probably took as assurance that nobody else would get the inside track?

"We previously thought they had ceased," Annan's embarrassed aide said of the payments. He stuck grimly to the line that U.N. officials "who gave Cotecna the contract had no idea that Kojo Annan worked for Cotecna," but carefully left himself an out: "and that continues to be our belief."

In the same way, there are still officials of the oil-stained U.N. Secretariat who profess to believe the repeated denials of Benon Sevan, the longtime right-hand man of Kofi Annan put in charge of what became history's largest swindle.

Of course, in a $20 billion ripoff, $125,000 to the boss's son for doing nothing is chump change. But it should lead to questions for the son: what are his associations with families in the oil industry? (Yamani or ya life!) Did he lie to his father about four years of fees from Cotecna, or did Kofi fail to ask him? Did Kojo inform Sevan about the fees, or know about any lucrative oil vouchers given by Saddam to Sevan?

For the father: Will he now share with Congress, which supplies 22 percent of the U.N. budget, his "thorough investigation" of his son's Cotecna connection? Did he learn of the "nothing illegal" fees only last Tuesday, as his aides say? Has he since asked his Absalomic son if the secretary general can stand by his April "nothing to do with" statement about Cotecna?

This marks the end of the beginning of the scandal. Its end will not begin until Kofi Annan, even if personally innocent, resigns - having, through initial ineptitude and final obstructionism, brought dishonor on the Secretariat of the United Nations.

-Rudey

[PhiPsiRuss]

Originally posted by Rudey
This marks the end of the beginning of the scandal. Its end will not begin until Kofi Annan, even if personally innocent, resigns - having, through initial ineptitude and final obstructionism, brought dishonor on the Secretariat of the United Nations.

Its funny how there are no demonstrations for his resignation.

[Rudey]

The New York Times

http://www.nytimes.com/2005/02/04/in...tml?oref=login


U.N. Diplomat Reportedly Sought Iraqi Oil Deals for Egyptian
By SUSAN SACHS

Published: February 4, 2005


Benon V. Sevan, a career United Nations diplomat who headed the oil-for-food program for Iraq, solicited favors from Saddam Hussein's government on behalf of an Egyptian trader who made more than $1.5 million in profits from his privileged access to Iraqi oil contracts, according to an investigative report released yesterday.

The trader, Fakhry Abdelnour, who is based in Geneva, also paid an illegal surcharge of $160,000 to the Iraqis, in violation of the United Nations sanctions against Iraq, while he and Mr. Sevan were lobbying for more business, said the report, which was issued by a United Nations-appointed panel headed by Paul A. Volcker.

In securing the oil contracts for Mr. Abdelnour, Mr. Sevan introduced him into one of the byways of the giant program, one that enriched a small group of traders while pouring money that was meant to buy food and medicine into secret Iraqi slush funds, it said.

Through the intercession of Mr. Sevan, the report said, Mr. Abdelnour was put on a list of individuals who received coupons, or allocations, that gave him the right to buy millions of barrels of Iraqi crude oil, starting in 1998.

The allocations were of little use to people who were not in the oil business and did not have the means, or desire, to lease tankers to ship the oil to refineries and other users. But they were valuable to Mr. Abdelnour, as the profits on his dealings with Iraq demonstrated.

Oil companies were hungry for Iraqi crude oil, especially in the early years of the oil-for-food program when prices for Iraqi oil were below world market prices. But Iraq did not sell oil to just anyone.

Under the guidance of Taha Yassin Ramadan, an Iraqi vice president, and the Revolutionary Command Council, headed by Mr. Hussein, a large portion of the oil allocations were handed out to a select group that included businessmen, politicians, journalists and diplomats who were perceived to be sympathetic to Iraq. According to traders and Iraqi officials, many people who received allocations sold them to an oil company at a premium.

Mr. Abdelnour did the same, the report said, selling his first allocation of 1.8 million barrels in the fall of 1998 to two oil companies for a $300,000 profit and selling another 5.5 million barrels for a $1.2 million profit over the next three years.

His company stopped buying oil in late 2000, the report added, after Iraq started demanding that oil buyers pay under-the-table surcharges on each barrel of oil they received. Many other traders in Mr. Abdelnour's situation have said they also pulled out around the same time because paying the surcharges meant that they could not make as much profit from selling their allocations as they previously had done.

By telling senior Iraqi officials like Mr. Ramadan that he wanted to "help a friend" get into the business of buying their oil, Mr. Sevan, played an important role, the investigators said.

"At that time in the program, it was highly unlikely that Iraq would sell oil to a company such as AMEP unless sponsored by a beneficiary that Iraqi officials wished to favor," the report said, referring to Mr. Abdelnour's oil-trading company, African Middle East Petroleum.

Senior Iraqi officials, the report added, were pleased with the chance to do Mr. Sevan a favor.

"He was a man of influence," the former Iraqi oil minister, Amir Muhammed Rashid, told investigators, and the government hoped, in vain as it turned out, that he had the power to speed up United Nations approval for Iraq to acquire spare parts for its oil industry.

-Rudey

[Rudey]

The New York Times

http://www.nytimes.com/2005/02/04/in...rtner=homepage

Inquiry on Food-for-Oil Plan Cites U.N. Diplomat for Conflict
By JUDITH MILLER and WARREN HOGE

Published: February 4, 2005


An interim report by a commission investigating the United Nations oil-for-food program in Iraq said the former head of the program had violated the United Nations Charter by helping a company owned by a friend to obtain valuable contracts to sell Iraqi oil.

The conduct of Benon V. Sevan, a Cypriot official who ran the program from 1997 until its demise in 2003, was a "grave and continuing conflict of interest" and had "seriously undermined the integrity of the United Nations," the report concludes.

The 219-page report, issued yesterday by the Independent Inquiry Committee, the United Nations-appointed panel headed by Paul A. Volcker, the former Federal Reserve chairman, depicts what was the United Nations' largest relief effort as riddled with political favoritism and mismanagement.

The $64 billion program, under which Iraqi oil revenues were used to buy relief goods for Iraqis, is also being investigated by five Congressional committees and a federal prosecutor in New York.

The report also says officials violated United Nations competitive bidding rules in hiring contractors for the program. It says important parts of the program were not audited, allowing evidence that Saddam Hussein was demanding and receiving kickbacks from companies selling his oil to go undetected.

A senior United Nations official announced yesterday that Secretary General Kofi Annan would try to discipline Mr. Sevan, who retired last year, and another senior official, Joseph Stephanides, who oversaw the selection of the program's major contractors.

The report does not say that Mr. Sevan, or other officials it criticizes, benefited personally from their actions.

But it discloses that Mr. Sevan received $160,000 in cash between 1999 to 2003 from an aunt in Cyprus, a retired government photographer who has since died. Mr. Volcker did not tie that money to his efforts on behalf of his friend's company, but the report says that the aunt's way of life did not suggest that she was wealthy and that the panel was continuing to investigate "the full scope and extent of benefits received by Mr. Sevan."

It also discloses that the Swiss-based company that Mr. Sevan helped, Africa Middle East Petroleum, made a $1.5 million profit by selling the oil allocations that Mr. Sevan had repeatedly solicited on its behalf from senior Iraqi officials. The report accuses the company of paying an illegal surcharge of $160,088 to Iraq in 2001.

In a statement yesterday, Eric L. Lewis, a lawyer for Mr. Sevan, denied his client had acted improperly. He said Mr. Sevan had no interest in any oil company and had never "accepted anything from anyone." The statement said he had always acted "in the best interests" of the oil-for-food program and the United Nations.

Mr. Lewis accused the panel of trying to "scapegoat" Mr. Sevan for "mentioning a company to the Iraqis as part of his role in advancing the process of trading oil for food."

"Mr. Sevan never took a penny," Mr. Lewis said, accusing the commission of succumbing to "massive political pressure."

Describing Mr. Sevan as "proud" of his 40-year service to the United Nations in some of the world's most dangerous places, the statement said that Mr. Sevan had fully disclosed the income he had received from his aunt.

The report accuses Mr. Sevan of not having been "forthcoming" with the committee about his relationship with the oil company, AMEP, or its owner, Fakhry Abdelnour, a distant relative of Boutros Boutros-Ghali, the former United Nations secretary general, whom the report criticizes separately for his role in selecting the program's main banker.

Reached by telephone in Paris, Mr. Boutros-Ghali said he had done nothing improper, calling Mr. Volcker's investigators "ignorant" of the United Nations system and their allegations about his conduct "silly."

Mr. Volcker said yesterday that the panel was continuing to investigate Mr. Sevan and his connections to Mr. Abdelnour, his company and other friends and associates.

Efforts to locate Mr. Abdelnour for comment yesterday were not successful. A call placed to his office in Geneva was not answered yesterday evening.

Mr. Stephanides, who oversaw contractor selection, did not return messages left on his office phone Wednesday night and yesterday morning.

Mark Malloch Brown, Mr. Annan's new chief of staff, said Mr. Stephanides could pay a high price as a result of disciplinary action up to and including dismissal, but he acknowledged that there was little the United Nations could do about Mr. Sevan, since he had retired. He said Mr. Annan would immediately lift the diplomatic immunity of any United Nations official charged with criminal conduct.

Mr. Volcker said, "This is a painful episode for everyone in the U.N."

This interim report defers judgment on fundamental issues of responsibility for corruption in the oil-for-food program, saying its investigations are continuing. Mr. Volcker and the two other commissioners - Richard Goldstone, a South African judge, and Mark Pieth, a Swiss financial expert - specifically deferred comment, for example, on allegations that the secretary general had a conflict of interest because his son Kojo had worked for Cotecna Inspection, a Swiss-based company hired to inspect the aid bought by Iraq.

Mr. Annan, who became secretary general in 1997, has previously said he had no role in selecting contractors.

Mr. Volcker said he hoped to issue his final report this summer.

The interim report, however, criticizes the way in which United Nations officials selected all three of the program's major contractors: Banque Nationale de Paris, a French bank that the panel said was not even on the United Nations' initial "long list" of the most technically qualified banks for the program; Saybolt Eastern Hemisphere BV, a Dutch oil inspection company that Mr. Stephanides was said to have promoted; and Lloyd's Register Inspection Ltd. of Britain, which the report said was chosen partly to balance lucrative contracts geographically among member nations.

The panel's investigators found "convincing and uncontested evidence" that the selection process had been "tainted" by irregularities in the case of all three contractors. The report does not accuse the contractors of acting illegally.

Both the report and Mr. Volcker emphasized that the major source of Mr. Hussein's illicit money was not kickbacks from the oil-for-food program but the estimated $8 billion in illegal oil sales to Jordan, Turkey and Syria that occurred even before the program was created. Mr. Volcker said that those sales were known to Security Council members, including the United States, and that Washington had specifically waived American laws barring such sales.

The report reserves its harshest criticism for Mr. Sevan, whose contacts with Iraqi officials on behalf of Mr. Abdelnour and his company AMEP, it details. The report states that Mr. Sevan first asked senior Iraqi officials for an allocation of oil "to help a friend" who was from Egypt in mid-1998, soon after the Security Council permitted Iraq to use up to $300 million of oil revenues to purchase spare parts for renovations. It was "highly unlikely," the report notes, "that Iraq would sell oil to a company such as AMEP unless sponsored by a beneficiary that Iraqi officials wished to favor."

Citing several Iraqi documents, the report concludes that Iraqi officials gave the allocations to AMEP at Mr. Sevan's requests hoping that this would "ensure a good relationship with him" and would help them obtain Mr. Sevan's assistance in lifting holds on spare part sales that Security Council members had placed on them.

The former Iraqi oil minister, Muhammad Rashid, specifically told the panel's investigators that the Iraqi government had allocated oil to Mr. Sevan "because 'he was a man of influence,' " the report states.

After Mr. Sevan turned out not to be "as helpful as hoped," it continues, the allocations for AMEP were reduced. "Neither Mr. Sevan nor Mr. Abdelnour was pleased with the reduction in the oil allocation," the report says. Mr. Sevan spoke to Mr. Rashid about it at an OPEC conference in Vienna in March 1999.

In the next phase of the program, AMEP's allocation was restored within five days after Mr. Sevan traveled to Iraqi to meet with Mr. Rashid again in the summer of 1999 to "discuss an expansion of the oil spare parts program."

The report says Mr. Sevan "denies that he asked for oil allocations or recommended any company to Iraqi officials for purchasing oil."

"But these claims are contradicted by the firsthand accounts of Iraqi officials involved," as well as by Iraqi oil company documents that list both Mr. Sevan and AMEP as recipients, "often following occasions when Mr. Sevan met with Oil Minister Rashid," the report states.

The report says Mr. Abdelnour said Mr. Sevan did not assist him in obtaining the allocations from Iraq.

It says Mr. Sevan initially told investigators he had met Mr. Abdelnour only briefly at the OPEC Vienna conference in 1999. But in later interviews he "admitted that he had passed at least one inquiry from Mr. Abdelnour to the Iraqi oil minister."

The report says that after being confronted with United Nations telephone records showing calls between himself and Mr. Abdelnour, Mr. Sevan acknowledged that the two men had "developed an acquaintanceship" lasting "over several years." It quotes Mr. Sevan as telling investigators: "I came to like the guy. He is an interesting character you know, he's been around the world."

At the United Nations, Mr. Malloch Brown said the secretary general was shocked at the report's findings about Mr. Sevan in particular.

"The secretary general is shocked by what the report has to say about Mr. Sevan, terribly dismayed that a colleague of so many years' standing is accused of breaching the U.N. code of conduct and staff rules in the ways he did, and he very much doubts that there can be any extenuating circumstances for the behavior which appears proven in the report," Mr. Malloch Brown said.

The mood toward Mr. Sevan, a longtime friend and confidant of Mr. Annan's, appeared unforgiving.

Mr. Malloch Brown said: "Let me be clear that while Benon Sevan is a very dear friend of many of us - I've worked with him for years - when you put together three international investigators, $34 million worth of investigations, 65 investigators, you don't then set yourselves up as a court of appeal over the results of that investigation." Any further investigation, he said, would be in "a judicial process."

Reaction to the report from Congressional investigators was mostly supportive of Mr. Volcker's work.

Representative Henry J. Hyde, the Illinois Republican who is the chairman of the House International Relations Committee, said in a statement that the report painted a picture of "mismanagement, neglect and political manipulation that resulted in significant corruption of the oil-for-food program."

"I am reluctant to conclude that the U.N. is damaged beyond repair," he said, "but these revelations certainly point in this direction."

A similar, but even harsher reaction came from Senator Norm Coleman, a Minnesota Republican and chairman of the Senate Permanent Committee on Investigations, who called on Mr. Annan to lift Mr. Sevan's diplomatic immunity immediately. "The report shows that he repeatedly lied to investigators, has misled the inquiry about the source of $160,000 in cash deposits and unethically steered oil-for-food contracts to close associates and lied about those relationships to authorities," he said.

-Rudey

[PhiPsiRuss]

Originally posted by Rudey
The interim report, however, criticizes the way in which United Nations officials selected all three of the program's major contractors: Banque Nationale de Paris, a French bank that the panel said was not even on the United Nations' initial "long list" of the most technically qualified banks for the program...

Why is this so not surprising?

[Rudey]

http://www.reuters.com/newsArticle.j...toryID=7543983

Iraq Wants Money Back; Annan Promises Action

Iraq Wants Money Back; Annan Promises Action
Fri Feb 4, 2005 02:17 PM ET


By Evelyn Leopold
UNITED NATIONS (Reuters) - Iraq said it wanted its money back from the scandal-tainted U.N. oil-for-food program Friday as Secretary-General Kofi Annan vowed to get to the bottom of wrongdoing by U.N. staff.

"Huge sums of money which should have served the needs of the Iraqi people who were suffering at that time -- a lot of these resources were squandered and misspent," said Iraq's U.N. ambassador, Samir Sumaidaie.

Iraq, he said, should at minimum not have to pay for the independent probe set up by the United Nations from remaining oil-for-food funds. The inquiry panel has spent $30 million so far, with the approval of the Security Council.

A key report by Paul Volcker, the former U.S. Federal Reserve chairman appointed by Annan to probe the $67 billion program, found that the director of the plan, Benon Sevan, helped steer oil contracts to a relative of former U.N. Secretary-General Boutros Boutros-Ghali.

The report does not accuse any U.N. officials of getting bribes. But it says Sevan received $160,000 from an aunt in Cyrus, who has since died and had few resources.

"We are as determined as everyone to get to the bottom of this. We do not want this shadow to hang over the U.N.," Annan said as he arrived at headquarters.

Annan said U.N. officials would be disciplined and that if criminal acts were committed, diplomatic immunity would be lifted. He said he was consulting with lawyers on how to do this, as Sevan, who has denied he received as much as a penny, has retired and is on $1 a year retainer

Among other questionable deals in the report was one in which another U.N. official, Joseph Stephanides, colluded with a former British U.N. ambassador so that Lloyd's Register Inspection Ltd. could get a lucrative contract.

The report showed that if the humanitarian program were audited more thoroughly, it might have uncovered the cheating by Saddam Hussein's government. Most of his skimming, which some estimates put as high as $8 billion, was earned by illegal oil sales outside the program, some of them permitted by the council.

DUBIOUS CHOICES

Investigators questioned Boutros-Ghali for choosing the Banque Nationale de Paris, now known as BNP-Paribas, to handle the program's account. He did so after council members asked him to select a bank but was criticized for asking Iraq its preference.

He was in office in 1996 when the program was negotiated and the Volcker report alleged that Stephanides interfered in the awarding of contracts.

But there are no allegations Boutros-Ghali deliberately undermined the program.

The program began in December 1996 and ended in November 2003, after the United States overthrew Saddam Hussein. Iraq was allowed to sell oil to buyers of its choosing and contract for food, medicine and other necessities to ease hardships caused by U.N. sanctions, imposed in mid-1990.

Volcker said his 240-page report was preliminary and that the final one would be produced in June. He said he may have another interim report to deal with the alleged role of Annan's son, who had worked in West Africa for Cotecna, another Swiss company that replaced Lloyd's in 1998 to inspect goods.

The Iraqi ambassador said the United Nations received $1.14 billion to administer the program and wanted to see how much actually reached its destination or was squandered by outside contractors working for the world body.

"The question arises whether the secretariat is subject to its own political culture, which tends to subvert the will of the Security Council," said Sumaidaie. "This is serious."

But he avoided blaming the Security Council, which had to approve contracts and whose key members were deadlocked in dealing with any improprieties on Iraq.

The U.S. Congress has initiated several investigations as has the U.S. Attorney's office.

Sen. Richard G. Lugar, the Republican chairman of the Foreign Relations Committee, said that "part of the blame for the current imbroglio lies with the U.N." but that one had to recognize that council members, including the United States "must also answer questions as to why they, too, did not pay greater scrutiny to this program."

But U.S. Rep. Henry Hyde, an Illinois Republican, said the Volcker report reinforced evidence of U.N. lapses in overseeing the program and "even the most rudimentary standards of accountability."

-Rudey

[Rudey]

I heard there are massive protests in Europe over their government's role in supporting a dictator who murdered and oppressed. These protestors decided to stop wishing for America to lose, for Iraq to be oppressed, and their countries to profit and now see the error in their ways. Has anyone else heard this?


http://www.nytimes.com/2005/10/27/in...st/27food.html

October 27, 2005
U.N. to Detail Kickbacks Paid for Iraq's Oil
By WARREN HOGE
UNITED NATIONS, Oct. 26 - More than 4,500 companies took part in the United Nations oil-for-food program and more than half of them paid illegal surcharges and kickbacks to Saddam Hussein, according to the independent committee investigating the program.

The country with the most companies involved in the program was Russia, followed by France, the committee says in a report to be released Thursday. The inquiry was led by Paul A. Volcker, former chairman of the Federal Reserve Board.

The findings are in the committee's fifth and final report, a document of more than 500 pages that will detail how outside companies from more than 60 countries were able to evade United Nations controls and make money for themselves as well as for the Hussein government.

Three investigators who described their findings in interviews declined to name the companies, though they said the companies would be identified in the document on Thursday. They refused to speak on the record about the report until it is released.

The new report studies the people outside Iraq who profited illicitly and how they did it. It will identify companies and individuals who took part, both deliberately and inadvertently, and will chronicle in detail the experience of 30 to 40 of them, the investigators said.

In an interview, Mr. Volcker said that while he knew the naming of companies and the exposure of international "machinations" would draw attention, he hoped it would not obscure his committee's purpose in keeping the focus of their work on the need for United Nations reform.

"In my mind," he said, "this part of our investigation, looking at the manipulation of the program outside the U.N., strongly reinforces the case that the U.N. itself carries a large part of this responsibility and needs reform.

"Even though we are looking at it from the outside, it kind of screams out at you, 'Why didn't somebody blow a whistle?' The central point is that it all adds up to the same story. You need some pretty thoroughgoing reforms at the U.N."

Those manipulating the program ranged from established trading companies to front companies set up for the purpose, and included some companies of international reputation as well as many well known in their home countries, the investigators said.

Mr. Hussein received $1.8 billion in illicit income from surcharges and kickbacks on the sales of oil and humanitarian goods during 1996-2003, when the program ran, the committee concluded in its last report in September.

Earlier Volcker committee reports summarizing the year and a half of inquiries have examined the activities of the United Nations, finding the institution's management inept and corrupt, and providing evidence that the program's former director, Benon V. Sevan, received kickbacks himself. He has denied any wrongdoing.

The $64 billion program was set up by the Security Council to help ease the effects of United Nations sanctions on the 27 million Iraqis by supplying food and medicines in exchange for letting the Hussein government export oil.

The investigators said Thursday's report would detail how Mr. Hussein first steered the program to gain political advantage with political allies and countries in a position to ease the United Nations sanctions. Both Russia and France are veto-bearing members of the Security Council.

"Then it got corrupted with a capital C when Saddam figured out how to make money off of it by putting on the surcharges and kickbacks," one investigator said.

At first, he said, companies balked at paying the extra fees, and the oil sales slowed. At that point, "less orthodox companies" came forward and accepted the terms, opening the way for the program's full scale exploitation and allowing legitimate companies to buy oil from illegitimate ones.

Another investigator noted that in the years immediately preceding the program, smuggling of Iraqi oil in much larger amounts had been going on for years to the benefit of the economies of American allies, including Jordan and Turkey. In his last report, Mr. Volcker said this smuggling amounted to $10.99 billion.

This investigator suggested that this had a compromising effect on the Security Council's willingness to step in and stop the practice. "Three years, four years already, letting the oil flow into Jordan and Turkey, so now you're going to be very strict about this smaller volume of oil?" he asked. "Unlikely."

All the companies named have been notified, and many have replied, with some of their responses reflected in the final report, an investigator said.

"The responses range from absolute denial to complete admittance," he said. "Some said, 'We had no knowledge of it' - that's a pretty standard response - and some said, 'If we paid it, we don't know we paid it.' "

Mr. Volcker has noted in the past that his committee is not a law-enforcement body, and expects the information it gathers to be turned over to national prosecutors. The committee is expected to close down at the end of November, and investigators declined to discuss whether it might extend its life beyond then.

The committee said some companies had complained that the evidence against them was gathered in Iraq and was therefore not trustworthy. But a lead investigator said that in those cases where corroborating evidence was available, the Iraqi information turned out to be sound.

"Everybody down the line kept very meticulous records because Saddam told them, 'You get the surcharge from everybody,' " he said. "So they all wanted to document how they got the surcharge."

-Rudey