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Saddam took $1.8 bln from UN oil-for-food pact

Old 10-27-05, 10:51 AM
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Saddam took $1.8 bln from UN oil-for-food pact

http://news.yahoo.com/s/nm/20051027/ts_nm/iraq_probe_dc

59 minutes ago

UNITED NATIONS (Reuters) - More than 2,000 firms that did business with Iraq in the now-defunct U.N. oil-for-food program were involved in bribes and kickbacks to Saddam Hussein's government, a major report on the program said on Thursday.

Saddam diverted some $1.8 billion in kickbacks and surcharges said the report from a U.N.-established Independent Inquiry Committee led by former U.S. Federal Reserve Chairman Paul Volcker.


Created a separate thread since it isn't part of his trial.

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Old 10-27-05, 10:56 AM
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I thought we already knew that figure. Didn't we?
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Old 10-27-05, 11:00 AM
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Originally Posted by X
I thought we already knew that figure. Didn't we?
But this was taken from a 'major' report.

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Old 10-27-05, 11:16 AM
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Old 10-27-05, 11:27 AM
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Don't we also have an 'oil-for-food' thread that's current?
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Old 10-27-05, 11:30 AM
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Originally Posted by wendersfan
Don't we also have an 'oil-for-food' thread that's current?
I don't come into Politics that much, so if that is the case, the mods can merge the 2. But I did do a search under Saddam and didn't see anything current.

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Old 10-27-05, 03:58 PM
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http://news.yahoo.com/s/nm/20051027/ts_nm/iraq_probe_dc

UN names oil companies in Iraq kickback scheme

By Timothy Gardner
13 minutes ago

UNITED NATIONS (Reuters) - Oil companies, including one that employed an Iraq weapons supplier, paid hundreds of millions of dollars in illegal kickbacks to Saddam Hussein during the U.N. oil-for-food program, a U.N. report said on Thursday.

Saddam Hussein's government took in $228.8 million from surcharges in connection with oil contracts, the report said. That was nearly 13 percent of the $1.8 billion in surcharges Iraq received from more than 2,200 foreign companies during the oil-for-food humanitarian program of 1996 to 2003, the report charged.

Intricate webs of companies, individuals, and governments stretching from Europe to Asia took part in paying illicit surcharges to Saddam's government. Russia and France were the countries with the most companies involved in the oil-for-food program.

The bulk of the illicit oil contract payments began when Iraq began leveling surcharges at the end of 2000. The surcharges, which lasted until the end of 2002, caused Iraq's regular customers to balk, the report said.

As a result, a group of four trading companies financed and lifted more than 60 percent of Iraqi crude oil in the market from December 2000 to mid-2001, Phase IX of the oil-for-food program.

Those trading companies were U.S. and Bahamas-based Bayoil, and three Swiss companies: Taurus, Vitol, and Glencore, according to the report.

All of the oil traders, executives and companies have denied knowingly making surcharge payments to Iraq.

Bayoil President David Chalmers and his former business associate, Augusto Giangrandi, used a front company, Italtech, to solicit oil allocations in Iraq, the report said.

Chalmers met Giangrandi, who was involved in selling weapons to Iraq, in the late 1980s. Giangrandi secured cluster bombs for Iraq.

Bayoil eventually paid more than $6 million in surcharges to the Iraqi regime through Al Wasel & Babel General Trading and Al-Hoda International Trading Co.

Jordanian businessman Talal Hussein Abu-Reyaleh, a Glencore agent, paid the surcharges, and Glencore paid him, the report said.

Vitol used Malaysian company Mastek to finance many of its oil deals with Iraq. The report said Iraq's oil marketing company, SOMO, received nearly $10 million of the charges it levied on Mastek in an account at Jordan National Bank in 31 separate payments.

Other companies, Dutch-based Trafigura and French oil services firm Ibex Energy, bribed U.N.-hired inspectors to buy more oil than was authorized under the oil-for-food program, the report from a U.N.-established Independent Inquiry Committee said.

Trafigura on Thursday denied it was knowingly involved in payment of bribes to purchase Iraqi oil.

The oil-for-food program was introduced in 1996 as a way to ease sanctions levied in 1990 against Iraq after it invaded Kuwait. It was designed to allow Baghdad to sell oil to pay for food and medicine for the Iraqi people.

The 500-page report is the final one from the panel, led by former U.S. Federal Reserve Chairman Paul Volcker, which has investigated the now-defunct program for the past 19 months. The report aims to put into context the manipulation of the program by companies around the world as well as individuals, groups and governments.

Also named was U.S.-based Coastal. French bank BNP-Paribas which held the escrow for the program, failed to act against corruption in the program.

"While some elements of the bank's relations to the U.N. remain in dispute, BNP was clearly inhibited from disclosing fully the first-hand knowledge it acquired of the true nature of financial relationships that fostered the payment of illicit surcharges," said the report.

Under the program, Iraq sold a total of $64.2 billion of oil to 248 companies, of which 139 paid illicit surcharges, the report said.


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Old 10-27-05, 08:19 PM
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Russia and France were the countries with the most companies involved in the oil-for-food program.
Gee....... go figure.
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Old 10-27-05, 08:31 PM
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Originally Posted by Mutley Hyde
Gee....... go figure.
Yeah, I thought Germany would have been before Russia.
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Old 10-27-05, 09:24 PM
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When are we gonna see this list of companies? I would like all the listed companies to have thier US government contracts canceled.
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Old 10-27-05, 10:15 PM
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Beauty....... just a few recognizable names so far.
http://tvnz.co.nz/view/page/411415/622893

Name after name

Among those named in the report as receiving oil vouchers that could be sold for a commission were British lawmaker George Galloway, former French UN Ambassador Jean-Bernard Merimee, former French Interior Minister Charles Pasqua and Russian ultranationalist leader Vladimir Zhirinovsky

Merimee, France's UN ambassador until 1995, alone told investigators that Tariq Aziz, Iraq's former deputy prime minister, had offered him the commissions because he was a "fair negotiator." He was at the United Nations until 1995, when the program was first considered and allegedly received $165,725 in 1999. French authorities are investigating him.

Iraq often demanded kickbacks as the cost of doing business. It allowed Saddam to gain hard currency, denied under the sanctions.

The report also found that Marc Rich & Co, a fugitive financier pardoned by former President Bill Clinton, financed the purchase, including the surcharges, of 4 million barrels of oil for the son of a French parliamentarian.

Top European companies like Germany's DaimlerChrysler AG and Siemens, Britain's Weir Group and the Brussels-based branch of Volvo Construction Engineers were among those reported to have paid kickbacks to Iraq.

DaimlerChrysler was said to have paid $7,134 in kickbacks on a contract with Iraq and Volvo paid $535,000. Daimler said it had dealt with the charge in its quarterly report and would not comment further. Volvo and Wier had no immediate reaction.

In addition, the BNP-Paribas bank, which held the escrow account for the program, did not disclose evidence of corruption in its possession, the report said. BNP said it disagreed with the panel's conclusions.

The report also said the Australian Wheat Board (AWB) paid over $221.7 million to a Jordan-based collection agent for the Iraqi government. The AWB and Alia, the collection agent, both denied the board knew of Iraq's partial ownership of Alia.

Under the program, which allowed Iraq to write its own contracts and choose buyers, oil firms including Vitol, Glencore and Bayoil paid out millions in illegal surcharges, the report said.

The largest single kickback came from the Malaysian firm Mastek, the report said.

Iraq's oil marketing company, SOMO, took more than $10 million in illegal surcharges from Mastek in 2001-2002. The report said that the Swiss trading firm Vitol financed 33 million barrels of crude through Mastek during that period.

The investigation has caused havoc at the United Nations, whose officials say the world body was unequipped to handle a program of that size.

"I think there are lessons for all of us to learn," UN Secretary-General Kofi Annan said. "We already have proposals for reforms that will ensure that in future we are better equipped to handle this sort of program."

Annan's son Kojo has figured in several reports, although the secretary-general himself was not accused of wrongdoing.
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Old 10-27-05, 10:18 PM
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Originally Posted by X
Yeah, I thought Germany would have been before Russia.
Indeed Germany, or Schroeder rather, was more adamntly opposed to action against Iraq. As such, I also found it odd that Russia was mentioned before Germany, and that Germany wasn't even mentioned at all.

Maybe Schroeder actually was acting out of altruism rather than business interests. Maybe.

EDIT; oops, looks like I may have spoke too soon - Myster X got his post in before mine and I hadn't seen this yet...

Originally Posted by Myster X
Top European companies like Germany's DaimlerChrysler AG and Siemens, Britain's Weir Group and the Brussels-based branch of Volvo Construction Engineers were among those reported to have paid kickbacks to Iraq.

DaimlerChrysler was said to have paid $7,134 in kickbacks on a contract with Iraq and Volvo paid $535,000. Daimler said it had dealt with the charge in its quarterly report and would not comment further. Volvo and Wier had no immediate reaction.
Ah well.

Last edited by Mutley Hyde; 10-27-05 at 10:22 PM.
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Old 10-28-05, 11:52 AM
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http://news.yahoo.com/s/nm/20051028/ts_nm/iraq_probe_dc

German group disputes Saddam bribery allegations

1 hour, 53 minutes ago

MUNICH, Germany (Reuters) - German industrial giant Siemens on Friday disputed allegations in a U.N. report it paid bribes to Saddam Hussein's government, but Sweden's Volvo said payments to work in Iraq were considered normal at the time.

A U.N.-appointed panel investigating the world body's now discontinued oil-for-food program on Thursday named Siemens and Volvo among 2,200 companies it accused of diverting $1.8 billion to the former Iraqi administration.

"We know of no kick-back payments initiated or tolerated by Siemens to seal contracts related to the oil-for-food program," a spokesman for the Munich-based engineering firm said.

The U.N. survey said more than half the firms doing business with Iraq wittingly or unwittingly fed Saddam's need for cash through straight bribes or surcharges on oil sales.

The companies involved came from 66 nations, including the United States, Russia, France, Germany and Switzerland.

Switzerland, which functioned as a hub for the oil trade with Iraq, said late on Thursday it had started criminal proceedings against four people and frozen bank accounts after the U.N. report.

But Russian Foreign Minister Sergei Lavrov was quoted as saying that some of the documents used in the report -- which implicated senior Russian officials -- were fakes.

Moscow was an ally of Baghdad during Saddam's rule.

"We were in touch several times with the commission and in a number of cases the documents they showed us were fake, in particular the signatures of Russian officials," Itar-Tass news agency quoted Lavrov as saying.

Lavrov did not say, though, if Moscow was disputing the findings, saying only it would study the report carefully.

The oil-for-food program, which began in 1996 and ended in 2003, was aimed at easing the impact of U.N. sanctions imposed in 1990 after Baghdad's troops invaded Kuwait. It allowed Iraq to sell oil to pay for food, medicine and other goods.

ALLEGATIONS DENIED

The U.N. report said all firms and traders contacted by the panel, led by former U.S. Federal Reserve Chairman Paul Volcker, denied the allegations except for one oil firm and 26 suppliers of goods.

It said three Siemens units had paid bribes totaling $1.6 million, but the German company said its own investigation had not confirmed the allegations against Siemens France, Siemens Turkey or Osram Middle East.

Swedish truckmaker Volvo, which was said to have paid $535,000, stressed it did not allow bribes. But the company also said its then agent in Iraq had told the commission that he paid money to the regime.

"One can question why, unfortunately, nobody spotted this and raised the alarm about it," spokesman Marten Wikforss said.

"But one should remember that this was spoken about openly and was perceived as something of a transaction fee which you paid to the Iraqi regime in order to be permitted to do business there," he told Reuters in Stockholm.

Volvo said it was examining the U.N. report.

"If it is confirmed that the accusations are valid and improper actions have occurred, we will naturally take actions," Volvo Chief Executive Leif Johansson said in a statement.

DaimlerChrysler, accused of paying bribes worth $7,134, said it noted the report's findings, but declined further comment.

Since 1998 it has been a crime for a German to pay a bribe overseas, but German prosecutors said they had not yet launched any criminal investigations.

Other countries, including the United States, Britain, France and Switzerland, have initiated prosecutions related to the oil-for-food program.

A former British diplomat said the report into how Saddam dodged sanctions and earned billions from oil smuggling and bribes was a lesson to the United Nations how not to handle a possible crisis in neighboring Iran.

"The Saddam regime was sustained by illegal smuggling that amounted to some $11 billion. The U.N. Security Council, including the U.S. and Britain, did very little to stop that," said Carne Ross, who was responsible for handling Britain's Iraq policy at the United Nations from 1998 to 2002.

"We should never make that mistake again," he told Reuters.


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Old 10-28-05, 12:57 PM
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Yeah... next thing you know, all 2199 of them will deny it.
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