German companies fingered in Iraq oil-for-food inquiry

28th October 2005, Comments 0 comments

28 October 2005, NEW YORK - Russian, French and Chinese companies that did business with the U.N. oil-for-food programme paid the bulk of some 1.8 billion dollars in kickbacks to Saddam Hussein, but some top Western companies also paid for contracts, an independent inquiry found Thursday.

28 October 2005

NEW YORK - Russian, French and Chinese companies that did business with the U.N. oil-for-food programme paid the bulk of some 1.8 billion dollars in kickbacks to Saddam Hussein, but some top Western companies also paid for contracts, an independent inquiry found Thursday.

The report on manipulation in the 1996-2003 U.N. programme for Iraq cited evidence of kickbacks by DaimlerChrysler Corp. and Siemens AG of Germany, Sweden's Volvo and British construction company Weir Group PLC, among others.

Governments approved private-sector contracts with the United Nations and Baghdad during the 1996-2003 programme with the former Iraqi regime - an involvement that has led to charges of corruption at the highest levels.

Paul Volcker, a former U.S. Federal Reserve head who led the two- year inquiry, said 4,500 companies from 66 countries signed contracts under the programme to buy Iraqi oil and sell everything from food and medicine to machines and farm products to Iraq.

After presenting the final report in a two-year probe, he closed by saying that reform of the United Nations was urgent.

When the scheme began, companies from all countries signed on. But by 2000, the report said, Saddam's regime gave preference to companies in Russia, France and China because those three countries favoured lifting U.N. economic sanctions imposed on Iraq in 1990 after it invaded Kuwait.

Companies and individuals were involved in illicit kickbacks, the highly detailed 500-page report said. And 40 countries paid the illicit surcharges on oil purchases imposed by the Saddam Hussein government beginning in 2000 - 50 U.S. cents on top of the price for each barrel of oil.

Saddam received about 1.8 billion dollars in kickbacks under the U.N. programme, which ended after U.S.-led forces invaded Iraq and toppled the Iraqi dictator in March 2003.

But that amount was dwarfed by an estimated 11 billion dollars in payments from oil smuggling by neighbouring countries, the report said.

The oil smuggling was carried out outside the oil-for-food programme, but U.N. headquarters failed to act on warnings that it was going on, the report said.

Reacting to the report's broad criticism, U.N. Secretary-General Kofi Annan said that he has already accepted responsibility for the management failures.

But he also blamed the U.N. Security Council, which created the relief programme, for failing to clearly define the responsibilities in carrying out the programme.

Already, the fallout has included the jailing in France two weeks ago of former Ambassador Jean-Bernard Merimee, 68, France's U.N. envoy from 1991 to 1995. He was accused of accepting more than 165,000 dollars in commissions from the sale of 2 million barrels of Iraqi oil.

The report said Serge Boidevaix, a former French foreign ministry official, received vouchers for 30 million barrels of oil from Baghdad through the Swiss company Vitol S.A. Boidevaix is under investigation.

It said the Iraqi Oil Ministry records showed that the Communist Party of the Russian Federation was granted a total of 125 million barrels of oil, which were sold to some Arab companies.

Vladimir Zhirinovsky, head of Russia's Liberal Democratic Party and a strong opponent of U.S. Middle East policy, received an allocation of 73 million barrels of oil, which were lifted by various Russian oil companies. The Volcker report said his name appeared in several Iraqi Oil Ministry records.

George Galloway, a member of the British Parliament, was allocated 18 million barrels of oil directly under his name or his associate, Fawaz Abdullah Zureikat, a Jordanian businessman, the report said.

Oil companies named in the report included Tyumen Oil Company, Alfa Eco and Lukoil Asia Pacific of Russia, Vitol S.A. and Taurus Petroleum of Switzerland, Alcon Petroleum, Petrocorp AVV of Lebanon and Italtech of Italy.

Under the oil-for-food plan, which lasted seven years, all revenues were deposited in escrow at France's Banque Nationale de Paris (BNP), for use in a humanitarian programme that distributed daily food rations to up to 60 per cent of ordinary Iraqis, who were suffering under U.N. sanctions.

Volcker said the U.N. was responsible for mismanagement in the oil-for-food scheme and had been "weakened" by the scandal.

"That is why reform is so urgent," Volcker said in a letter to Annan.

Financial transactions from 1996 to 2003 for the oil-for-food programme stood at more than 100 billion dollars, including 64.2 billion dollars deriving from purchases of Iraqi oil which were deposited into BNP, directly or through one of the bank's affiliates. The rest of about 39 billion dollars were for the purchases of food supplies for the Iraqis.

Volcker said he plans to wind up the investigation by the end of November. Its expected 38-million-dollar cost comes from an oil-for- food account.

DPA

Subject: German news

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