How Iraq used its oil to buy favours from UN

The Times (London)
October 7, 2004, Thursday

How Iraq used its oil to buy favours from UN

by James Bone in New York

SADDAM HUSSEIN used the UN Oil-for-Food programme to subvert UN
sanctions by buying influence with UN officials and Security Council
members, the US Government alleged last night.

A report by the chief US weapons inspector in Iraq named Benon Sevan,
the head of the UN programme, and key officials in Security Council
member states as having benefited from Iraqi oil sales.

George Galloway, the British MP, also figured on the list shown to
reporters in London. But his name was apparently edited out of the
copy released on the CIA website.

The report was based on 13 secret lists of oil allocations kept by
Iraqi Vice-President Taha Yassin Ramadan and Amir Rashid, the Oil

The lists included alleged allocations to the Russian presidential
office, the Russian Foreign Ministry, the son of Russia’s
then-ambassador to Baghdad as well as members of the Dumas and
several political parties, including the Communists, Russia’s Unity
Party and the country’s Liberal Democratic Party.

France’s former Interior Minister, Charles Pasqua, and a “Jan
Mirami”, believed to be former UN Ambassador, Jean-Bernard Merimee,
were also named, as was the Iraqi-French Friendship Society.

The former Indonesian President Megawati Sukarnoputri , the son of
Lebanese President Emile Lahoud, the Yugoslav Radical Party, the
Spanish Public Party, the People’s Liberation Front of Palestine and
the anti-Iranian Mujahideen Khalq also figured on the list.

“Saddam personally approved and removed all names of voucher
recipients”, the report said. “He made all modifications to the list,
adding or deleting names at will.”

The Oil-for-Food programme has come under intense scrutiny since the
Baghdad newspaper Al-Mada published a list in January of companies
and individuals – including Mr Sevan -who allegedly received vouchers
conferring the right to lift specific amounts of Iraqi crude.

The programme allowed Iraq, which was placed under a comprehensive UN
trade embargo after its 1990 invasion of Kuwait, to sell limited
amounts of oil and to use the proceeds to buy humanitarian supplies

But Saddam was allegedly able to exploit a loophole in the system to
pay off allies and sympathisers around the world.

Because he decided who could buy Iraqi crude, Saddam could award the
right to purchase specific amounts of oil to his friends. Those
companies and individuals could then sell on those rights to oil
traders for a profit. The oil traders would then arrange to pick up,
or “lift”, the oil from Iraq and sell it on the world market.

According to a preliminary copy seen by The Times, the US Government
report describes the Oil-for-Food scheme as a burgeoning source of
real disposable income for Saddam, with ample scope for corruption.
It says lucrative allocations were made to UN officials and to Iraq’s
supporters around the world, including key figures in Security
Council members Russia, France and Syria.

The pay-offs meant that some Security Council members were actually
violating UN sanctions passed by the council itself, the report

Russia and Syria in particular were vocal defenders of Iraq on the UN
sanctions committee at a time when they had a financial stake in
closing loopholes in the system.

A senior US official said Saddam had used his control over the
distribution of Iraqi oil as an “important tool” to seek “leverage”
on the world stage in a bid to win the lifting of sanctions. “Iraq
used that process of allocating the rights to lift oil to suit its
national interests,” he said.

The official added that companies and individuals named on the US
list were an indication of whom Iraq was “seeking to influence, whom
they thought they were influencing”. But he cautioned that those
named should not necessarily be seen as having been “bribed.”

“This is a list of people who Iraq chose to give oil allocation to.
The circumstances of propriety or impropriety of that, well, you’ve
got to look at the recipient,” the official said.

The scandal is now being investigated by at least five US
congressional committees as well as the Iraqi interim Government and
a UN inquiry headed by Paul Volcker, the former chairman of the US
Federal Reserve. Criminal investigations into alleged sanctions
busting are also under way in the United States.

Mr Sevan, a Cypriot of Armenian descent who ran the programme from
1997 until it was closed down, reiterated his innocence yesterday in
the face of renewed allegations that he had profited from the scheme.