[CNN] Oil-food report: $1.8bn diverted to Hussein regime

The good ol' dependable United Nations... more corrupt then even the richest nations. Either way most of you will think it was a stupid idea to get Saddam out of power... ridiculous.
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http://www.cnn.com/2005/WORLD/meast/10/27/oil.food.report/index.html
Oil-food report: $1.8bn diverted to Hussein regime
Thursday, October 27, 2005; Posted: 3:19 p.m. EDT (19:19 GMT)

UNITED NATIONS (CNN) -- Former Iraqi President Saddam Hussein manipulated the United Nations oil-for-food program so that his regime received $1.8 billion in illicit payments, a U.N.-backed independent report said Thursday.

The investigation, led by former Federal Reserve Chairman Paul Volcker, said kickbacks came from some 66 member states and illicit surcharges came from 40 member states.

"Oil surcharges were paid in connection with the contracts of 139 companies and humanitarian kickbacks were paid in connection with the contracts of 2,253 companies," the report said.

The report -- the eighth and final document released about the program since August of last year -- describes "how thousands of contractors, wittingly or unwittingly, facilitated the process," Volcker told reporters in a New York hotel.

It is based, in large part, on data from the former regime itself, supplemented by banking and other records, Volcker said.

He called oil-for-food -- which began in late 1996 and ended in 2003 -- "the mother of all humanitarian programs," noting that thousands of employees were involved in running it.

A critical point came in 2000, when the program was almost three years old, and "the regime began openly to demand illicit payments from its customers," the report said.

"Iraq's largest source of illicit income under the program came from kickbacks paid by companies that had been selected to receive contracts for humanitarian goods under the program," the report said.

It added, "Available evidence indicates that Iraq derived more than $1.5 billion of income from the kickbacks."

Once the kickbacks and payoffs became generalized, "it should have been caught. There were provisions in the program and in its management and oversight that should have permitted it to be caught."

By the time the surcharge program ended two years later, the Iraqi government had received $228.8 million in illicit income, the report said.

Volcker blamed Saddam Hussein's ability to decide how much to charge and to whom to sell for making it easy for him to manipulate the program.
Program had separate goal

In addition to its humanitarian component, oil-for-food had a separate goal, which was to keep Saddam Hussein from getting or maintaining weapons of mass destruction, he said. Though the program appears to have succeeded on both counts, "that success came with a high cost; in my judgment, an intolerably high cost," Volcker said.

The 630-page report said there was plenty of blame to go around. Though the oil overseers expressed concern to the secretariat and to the Security Council about Iraq's demands for payment, "little action was taken," it said.

The report cited Banque Nationale de Paris, which held the escrow account for the $64 billion program and provided the letters of credit needed for the financing, saying it "was in a position to have first-hand knowledge" of what was going on but "did not recognize a particular responsibility to adequately inform the U.N."

In response, BNP said that is operated through subsidiaries and affiliates that could not share customer information with each other, an argument the report described as "unpersuasive."

In addition, the report said countries that "were responsible for approving their national companies to do business with the program took no action."

The report pointed to a number of contracts with Russian companies, which it said accounted for about 30 percent of oil sales.

"By far, the largest portion of surcharge payments went through the Iraqi Embassy in Moscow between March 2001 and December 2002," when more than $52 million in surcharges was paid through the embassy there, the report said.
Companies deny involvement

The companies have denied involvement, despite being confronted with evidence, the report said.

Also cited were subsidiaries for Siemens, one of the world's largest electrical engineering and electronics companies.

The subsidiaries, in France, Turkey and the United Arab Emirates, "paid kickbacks to the Iraqi regime in order to obtain program contracts," the report said.

The company, in a written response published in the report, said its own inquiries "cannot confirm the committee's allegations" and that its management considers the conclusions "premature" and "unjustified."

Volvo of Sweden, which sold $11.8 million in heavy construction equipment to the regime under the oil-for-food program, was also cited for having paid kickbacks of more than $317,000 in April 2002 to Iraq's central bank account in Amman, Jordan.

The company decided not to furnish any contrary evidence, the report said, though its vice president and general counsel said in a letter to the commission, which was published in the report, that the conclusions were not supported by the evidence.

The report also said Marc Rich & Co. financed 4 million barrels of oil under a 9.5-million-barrel contract awarded to the European Oil and Trading Co. (EOTC), a French-based shell company.

"Surcharges were imposed on the oil," the report said, and "Marc Rich & Co. directed BNP Paris not to disclose its identity to BNP NY in connection with its financing of the U.N. contract."

It added, "According to an individual familiar with the companies, EOTC and Marc Rich & Co. agreed that the premium paid to EOTC would cover a commission and a surcharge.

"The premium paid by Marc Rich & Co. of 30-40 cents per barrel was sufficiently high to cover both."

The company responded that it "continues to dispute vigorously" the report's conclusion.

The report also named Daimler Chrysler for having "knowingly made or caused to be made a kickback payment of approximately $7,134 to the government of Iraq outside the program and in violation of the U.N. sanctions against Iraq."

The report said the payment was known to at least one managerial-level person working for the company in Germany.

The company, in a written statement, said it was aware of the report and, "in light of ongoing investigations by the U.S. Securities and Exchange Commission and the U.S. Department of Justice relating to this matter," had no comment.

Volcker cautioned that, just because a company's individual contract is identified as having been the subject of an illicit payment, that "doesn't necessarily mean that company made, authorized or even knew about the illicit payment."

The report also names British Member of Parliament George Galloway for receiving proceeds, either directly or through an associate, from 18 million barrels of oil sold through the program.

Galloway, a critic of the U.S.-led invasion of Iraq, heatedly denied the allegation.

Volcker said he had found no evidence linking former Secretary-General Boutros Boutros-Ghali, who led the world body from 1992 to 1996, to any of the corruption schemes.

Secretary-General Kofi Annan's son was employed by a contractor who got an oil contract, but Volcker said the commission did not fault him.

"We decided that, in the end, while there was a number of occasions that raised questions, raised doubts, in the end we did not have reasonably sufficient evidence to say that we knew that his son was employed by the company at the time, or that he knew that the company was applying for the contract."

Kofi Annan himself authorized an inquiry into his son's dealings, but Volcker was not impressed at the elder Annan's move. "In our view, it was not much of an inquiry," Volcker said. "We have criticized him, I think, about as severely as you can in saying he made a mistake."

Volcker said the commission members would make themselves and their information available to any law enforcement or regulatory agencies that might want to pursue particular cases, but would disband in about a month.

--CNN producer Liz Neisloss contributed to this report

 

That is the most ridiculous thing I have ever heard. For one, when the oil for food program was implemented Clinton was in office, and when it was "most abused" he was still in office... meanwhile Halliburton was too busy in the Balkans after being rewarded a massive military contract under President Clinton's watch. The vast majority of oil for food bribes and overages came from our friends in Europe... Last I checked Halliburton's sister KBR isn't a food or medical supply company, they are a logistical company and would have nothing to do with the oil for food program. Speak of what you know which is obviously very little.

You obviously didn't read the article considering it cites most of the biggest abusers of the system...

 

No, it is just another violation of UN sanctions that gave us the right to do so. Honestly, I love how when something that goes against the drivel that is preached here day in and day out it simply gets ignored or your usual one line quips.

Also, remember that John Kerry and his fellow democrats had the same information that the President did regarding WMD, and VOTED for the invasion... so give this "no WMDs Bush lied" defense a rest.

 

Once again another ignorant post without any facts. Halliburton has been cleared on the vast majority of disputed charges in Iraq... but I guess Dick Cheney is the reason they got the biggest Iraq contract right? Oh, wait... they have also had the biggest military contracts dating back to the early 90s including during Clinton's two terms, so I guess he's in on it to right? If you think the White House has any say in the DoD contracts you are more dense then first suspected.