Oil-for-Food Programme
Encyclopedia
The Oil-for-Food Programme (OFF), established by the United Nations
in 1995 (under UN Security Council
Resolution 986
) was established with the stated intent to allow Iraq
to sell oil
on the world market in exchange for food
, medicine
, and other humanitarian needs for ordinary Iraqi citizens without allowing Iraq to boost its military capabilities.
The programme was introduced by United States
President
Bill Clinton
's administration in 1995, as a response to arguments that ordinary Iraqi citizens were inordinately affected by the international economic sanctions
aimed at the demilitarisation
of Saddam Hussein
's Iraq, imposed in the wake of the first Gulf War
. The sanctions were discontinued on November 21, 2003 after the U.S. invasion
of Iraq, and the humanitarian functions turned over to the Coalition Provisional Authority
.
The programme was de jure terminated in 2003 and de facto terminated in 2010. As the programme ended, there were revelations of corruption involving the funds.
in August 1990.
Security Council Resolution 706
of August 15, 1991 was introduced to allow the sale of Iraqi oil in exchange for food.
Security Council Resolution 712
of September 19, 1991 confirmed that Iraq could sell up to $
1.6 billion in oil to fund an Oil-For-Food Programme.
After an initial refusal, Iraq signed a memorandum of understanding
(MOU) in May 1996 for arrangements to be taken for the implementation of that resolution.
The Oil-for-Food Programme started in December 1996, and the first shipments of food arrived in March 1997. Sixty percent of Iraq's twenty-six million people were solely dependent on rations from the oil-for-food plan.
The programme used an escrow
system. Oil exported from Iraq was paid for by the recipient into an escrow account possessed until 2001 by BNP Paribas
bank, rather than to the Iraqi government. The money was then apportioned to pay for war reparations
to Kuwait
, ongoing coalition and United Nations operations within Iraq. The remainder, the majority of the revenue, was available to the Iraqi government to purchase regulated items.
The Iraqi government was permitted to purchase only items that were not embargo
ed under the economic sanctions. Certain items, such as raw foodstuffs, were expedited for immediate shipment, but requests for most items, including such simple things as pencil
s and folic acid
, were reviewed in a process that typically took about six months before shipment was authorized. Items deemed to have any potential application in chemical, biological or nuclear weapons systems development were not available to the regime, regardless of stated purpose.
i oil was sold on the world market. About US$46 billion of these funds were intended to provide for the humanitarian
needs of Iraqi people such as food
and medicine
in the context of international economic sanctions
. A considerable amount was spent for Gulf War reparations through a compensation fund (25 percent since December 2000); UN administrative and operational costs for the programme (2.2 percent) and costs for the weapons inspection programme. Internal audits have not been made public.
Alternatively, if the sanctions were too harmful for Iraqis to sustain, critics argued, the sanctions should be removed (excepting clearly military items). Critics claimed that the Oil-for-Food Programme was responsible, under the blockage of dual-use equipment, for preventing Iraq from repairing the water purification and medical systems destroyed by the initial sanctions and during 1991 Gulf War, and others challenged the programme on the grounds that it would not permit Iraq to import the food and medicine necessary to prevent millions of easily preventable deaths. Former programme heads such as Hans von Sponeck
questioned whether the sanctions should exist at all. Von Sponeck, speaking in University of California, Berkeley
in late 2001, decried the proposed "Smart Sanctions", stating, "What is proposed at this point in fact amounts to a tightening of the rope around the neck of the average Iraqi citizen"; claimed that the sanctions were causing the death of 150 Iraqi children per day; and accused the US and Britain of arrogance toward Iraq, such as refusing to let it pay its UN and OPEC dues and blocking Iraqi attempts at negotiation.
Supporters viewed the programme as a way to keep Saddam Hussein in check without resorting to war.
The Clinton Administration opposed further liberalization of the proposal, which was pursued by both Russia and France.
and British
forces invaded Iraq
, UN Secretary-General Kofi Annan
suspended the programme and evacuated more than 300 workers monitoring the distribution of supplies.
On 28 March 2003, Secretary-General Annan, the United States, and Britain asked the Security Council to ensure that nearly US$10 billion in goods Iraq ordered and already approved, including US$2.4 billion for food, could enter the country when conditions allow. The resolution under discussion made clear that the chief responsibility for addressing humanitarian consequences of the war would fall to the United States and Britain if they took control of the country. This refers to the 1949 Fourth Geneva Convention
on the responsibilities of the occupying power.
On 22 May 2003, UN Security Council Resolution 1483 granted authority to the Coalition Provisional Authority
to use Iraq's oil revenue. The programme's remaining funds of $10 billion were transferred over a 6 month winding-up period to the Development Fund for Iraq
under the Coalition Provisional Authority's control; this represented 14% of the programme's total income over 5 years.
The programme was formally terminated on 21 November 2003 and its major functions were turned over to the Coalition Provisional Authority
.
Benon Sevan
of Cyprus
, who headed the programme, defended it, claiming that it had only a 2.2% administrative cost and that it was subject to more than 100 audits (internal and external), blaming restrictions from the Security Council for making the situation difficult. He also claimed that 90% of Iraq's population relied on the programme for its monthly food basket. While Benon Sevan was in charge of the programme, he stonewalled efforts to review and investigate the programme. He ordered his staff that complaints about illegal payoffs should be formally filed with the whistleblower
's country, making them public and allowing Iraq to bar any whistleblowers. In 2000, Dileep Nair
, the UN corruption watchdog, wanted to determine the programme's level of vulnerability. Sevan, along with UN Deputy Secretary-General, Louise Frechette
, rejected any such investigation, claiming that it would be too expensive to be worthwhile. Sevan ordered the shredding of years' worth of documents concerning the programme.
In response to these criticisms, and to evidence acquired after the United States invasion of Iraq, UN Secretary-General accusations were made that skimmed profits were being used to buy influence at the UN and with Kofi Annan
himself.
According to an interim report released on February 3, 2005 by former Federal Reserve chairman Paul Volcker
's commission (see #Investigations below), much of the food aid supplied under the programme "was unfit for human consumption". The report concluded that Sevan had accepted nearly $150,000 in bribes over the course of the programme, and in 2005 he was suspended from his position at the United Nations as a result of the investigation of fraud in the programme.
Peter van Walsum
, the now-retired Ambassador of the Netherlands
to the United Nations and chairman of the Iraq Sanctions Committee from 1999 to 2000, speculated in a recent book that Iraq deliberately divided the Security Council by awarding contracts to France
, Russia
, and China
but not to the United Kingdom
and the United States
. He also stated he encountered a number of cases in which he felt the lack of Iraqi cooperation was designed to exacerbate the suffering of its own people. He also claimed that it was his opinion that the sanctions were not an effective deterrent.
Until 2001, the money for the Oil-for-Food Programme transited through the BNP Paribas bank
, whose main private share-holder is Iraqi-born Nadhmi Auchi
, a man estimated to be worth about $1 billion according to Forbes, and ranks 13th in Britain according to The Guardian
. Auchi received a 15-month suspended sentence for his involvement in the Elf scandal
, which has been qualified by the British newspaper as "the biggest fraud inquiry in Europe since the Second World War. Elf became a private bank for its executives who spent £200 million on political favours, mistresses, jewellery, fine art, villas and apartments". Elf, an oil company, merged with TotalFina
to become Total S.A.
in 2003.
Named in the list of beneficiaries were British
MP George Galloway
and his charity, the Mariam Fund; former French Interior Minister Charles Pasqua
; and Shaker al-Kaffaji, an Iraqi-American businessman, India's foreign minister, Natwar Singh, was removed from office because of his role in the scandal. Many prominent Russian firms and individuals were also included on the al Mada list. Even the Russian Orthodox Church was supposedly involved in illegal oil trading. The former assistant to the Vatican secretary of state, Reverend Jean-Marie Benjamin
, is said to have received rights to sell 4.5 Moilbbl. George Galloway subsequently won two libel actions against the Christian Science Monitor and Daily Telegraph, which reported the allegations.
The president of Oilexco Ltd, Arthur Millholland, whose name also appeared on the al Mada list, denied any wrongdoing, but confirms the charges that illegal surcharges were being paid to the Iraqi government by contractors. However, the al Mada list does not discuss bribes paid to Iraq - it discusses bribes paid to individuals so that they would support Iraq. Few deny that in Iraq, like in many third-world countries, bribes and kickbacks were regularly paid to the leadership in order to get contracts, but some suggest that kickbacks would normally not occur in such countries when a UN-run programme was involved.
Contracts to sell Iraq humanitarian goods through the Oil-for-Food Programme were given to companies and individuals based on their willingness to kick back a certain percentage of the contract profits to the Iraqi regime. Companies that sold commodities via the Oil-for-Food Programme were overcharging by up to 10%, with part of the overcharged amount being diverted into private bank accounts for Saddam Hussein and other regime officials and the other part being kept by the supplier.
The involvement of the UN itself in the scandal began in February 2004 after the name of Benon Sevan
, executive director of the Oil-for-Food Programme, appeared on the Iraqi Oil Ministry's documents. Sevan allegedly was given vouchers for at least 11,000,000 barrels (1,700,000 m³) of oil, worth some $3.5 million in personal profit. Sevan has denied the charges.
found that BNP Paribas made payments without proof that goods were delivered and sanctioned payments to third parties not identified as authorized recipients. Investigators estimate that the bank received more than $700 million in fees under the UN programme that began in 1996 and ended after the ousting of Saddam in March 2003.
, which was tasked with finding evidence of weapons of mass destruction
in Iraq, found that OFF saved the Iraqi economy from decline after the imposition of sanctions. Furthermore, the Iraqi regime found that it could corrupt OFF to get hard currency
that could be used to manipulate the Iraq Sanctions Committee and undermine sanctions as well as increase arms.
The final official version of the Iraq Survey Group report (Duelfer Report) cites only France, Russia and China (countries who were also strongly anti-war) as violators who paid kickbacks. According to the report, the top three recipients of oil included Russia (30%), France (15%), and China (10%), which are on the UN Security Council. The US received 2–3%. The US recipients included Exxon Mobil Corp., ChevronTexaco Corp. and El Paso Corp.
The list of US companies were originally censored by CIA lawyers, citing privacy issues, but was later leaked.
On June 5, 2007, the German chapter of the anti-corruption organisation Transparency International (TI) lodged a complaint with the German Federal Ministry of Economics and Technology (BMWi) against 57 German companies for allegedly paying $11.9m in kickbacks in the United Nations’ Oil for Food Programme in Iraq.
of Al Jazeera
and Hamida Naanaa, a writer based in France and known for her pro-Saddam slant. Two types of oil coupons were used: silver coupons that entitled holders to nine million barrels of oil, and gold coupons that were worth more. Hamida Naanaa is said to have received a gold coupon.
, run by an individual alleged to have received oil sales contracts, managed to stall the building of a new general hospital for the Kurdish city of Sulaymaniya, even though the funds for the project had been available since 1998.
" in New York diplomatic circles. The source of the documents was a Cotecna executive.
The Second Interim Report by the IIC confirmed that Cotecna indeed won the Oil for Food contract fairly and based on merit. The Committee concluded that there was no link between Kofi Annan and the award of Cotecna’s contract; and Cotecna has been transparent and cooperative through this investigation.
defector Tretyakov
, the Oil-for-Food program was sabotaged by an undercover Russian intelligence officer Alexander Kramar who worked in the UN. Kramar set up the artificially low oil prices in 1998 to allow Saddam to use the oil vouchers as lucrative bribes. The difference between the market price and the artificial price (defined by Kramar) was pocketed by people who received the vouchers from Saddam. Among the bribed were top officials from Russia, France, and China. The biggest part of vouchers (to buy 1366 Goilbbl of oil) went to forty-six individuals or organizations in Russia, including Russian Orthodox Church
. They pocketed $476 million. Among Russians who received the money were Alexander Voloshin
and Vladimir Zhirinovsky
. Sergei Isakov, a buddy of Voloshin, carried bags with money from Moscow to Baghdad to return some of the "earned" money as kickbacks to Saddam.
finance operations. Fox News broke the story that Alexander Yakovlev, a Russian official in the UN Procurement Department, was involved; he later resigned and pled guilty to corruption charges. One link was to Ahmed Idris Nasreddin, a man designated as a terrorist financier by the US and the UN. The UN has named Nasreddin as a man "belonging to or affiliated with Al Qaeda
." Petra Navigation Group was a company that was on the blacklist of firms blocked from doing business with the U.S. for sanctions-busting activities designed to help Saddam's regime.
, among others, was the recipient of approximately $600,000 of illegal oil kickbacks from the Iraqi regime. During testimony before the committee on May 17, 2005, Galloway stated that the charges were false and part of a diversionary "smoke screen" by pro-Iraq war U.S. politicians designed to deflect attention from the "theft of billions of dollars of Iraq's wealth..." that had occurred under the post-invasion Coalition Provisional Authority. A later October 25, 2005 report prepared by the subcommittee's majority staff claimed to have evidence that Galloway was "false or misleading" during his Senate testimony, and further that his then-wife (since divorced) received some of the kickbacks. A second new element to the accusations is the subcommittee's claim that former Iraqi foreign minister Tariq Aziz
, imprisoned without charges in a secret location since early 2003, has verified them. However, Aziz's lawyer Badia Aref states, "these are lies ... he (Aziz) denied this." Galloway continues to deny wrongdoing and challenged the former Subcommittee's chairman, Senator Norm Coleman
, to charge him with perjury.
, later AWB Limited, was the biggest single source of kickbacks. In exchange for trouble-free disembarkation of wheat purchased under the Oil-for-Food Programme, the Australian Wheat Board paid 'trucking charges' totalling $AU300 million to Alia. Alia is a real Jordanian trucking company, but one with no role in the distribution of Australian wheat in Iraq. Alia kept a small percentage of 'charges', and passed the remainder to Saddam's government. The AWB was fully compensated for the charges by increases in the price paid; the payments were approved by the Australian Department of Foreign Affairs and Trade
. The Australian Government commissioned judge Terence Cole to further investigate whether Australian companies had indeed paid kickbacks to the Saddam regime. The Cole Inquiry
commenced in December 2005. The Cole Inquiry has received testimony from senior Australian Government officials, including Prime Minister John Howard, Deputy Prime Minister Mark Vaile, Foreign Minister Alexander Downer and various officials from the Department of Foreign Affairs and Trade. During the course of the inquiry numerous AWB officials have resigned, including Managing Director Andrew Lindberg
. In 2009, the Australian Federal Police ended the investigation related to the scandal.
(GAO) was given the task of finalizing all Oil-for-Food related supply contracts made with the now-defunct regime as well as tracking down the personal fortunes of former regime members. During the execution of this task, the GAO found weaknesses in the programme that allowed kickbacks and other sources of wealth for Saddam Hussein.
The GAO estimates that the Saddam Hussein regime generated $10.1 billion in illegal revenues. This figure includes $5.7 billion from oil smuggling and $4.4 billion in illicit surcharges on oil sales and after-sales charges on suppliers. The scale of the fraud was far more extensive than the GAO had previously estimated. A U.S. Department of Defense
study, cited by the GAO, evaluated 759 contracts administered through the Oil-for-Food Programme and found that nearly half had been overpriced, by an average of 21 percent. Unlike the 661 committee, members of the Security Council had the authority to launch investigations into contracts and to stop any contract they did not like. The British and the Americans had turned down hundreds of Oil-for-Food contract requests, but these were blocked primarily on the grounds that the items being imported were dual-use technologies.
To quote the GAO report, in its summary:
Joseph A. Christoff, director of international affairs and trade at the General Accounting Office, told a House hearing that UN auditors had refused to release the internal audits of the Oil-for-Food Programme. Benon Sevan
, with support from Kofi Annan
, had written letters to all former Oil-for-Food contractors asking them to consult Sevan before releasing any documents to GAO or US congressional inquiry panels. Throughout its history, the programme had received both complaints from critics saying that it needed to be more open and complaints from companies about proprietary information being disclosed.
The United Nations has denied all requests by the GAO for access to confidential internal audits of the Oil-for-Food Programme.
While attempting to determine the complexity of the Oil-for-Food Programme for articles in The Wall Street Journal
, investigative journalist Claudia Rosett
of the Foundation for the Defence of Democracies and the Hudson Institute
discovered that the UN treated details such as the identities of Oil-for-Food contractors; the price, quantity and quality of goods involved in the relief deals; and the identities of the oil buyers and the precise quantities that they received as confidential. The bank statements, the interest paid, and the transactions were all secret as well. Rosett has come under harsh criticism from Denis Halliday
and Benon Sevan
, who have claimed that many of Rosett's claims (such as Oil-for-Food funding the approval of an Olympic stadium, and where responsibility for various issues lay according to the UN resolutions) were incorrect.
The US House Committee on International Relations investigated the Oil-for-Food Programme and discovered that money was provided by Sabah Yassen, the former Iraqi ambassador to Jordan, to pay the families of Palestinian suicide bombers
between $15,000 to $25,000. From September 2000 until the invasion of Iraq, the families of Palestinians killed or wounded in the conflict with Israel (including 117 responsible for suicide bombings in Israel) received over $35 million. It is alleged that this money came from the UN Oil-for-Food Programme.
stated on 19 March 2004 that a full independent investigation would be launched. In an official press interview, Annan said "[...] it is highly possible that there has been quite a lot of wrongdoing, but we need to investigate [...] and see who was responsible." "00:00:03". (audio clip, @5:56) However, Annan was emphatic that most of the claims were "outrageous and exaggerated", and that most of the criticisms had to do with things over which the programme had no authority.
The following individuals were chosen in April 2004 to head the United Nations' Independent Inquiry Committee
http://www.iic-offp.org/index.html:
On April 22, 2004, the United Nations Security Council
passed a unanimous resolution endorsing the Volcker inquiry into corruption
in the United Nations Oil-for-Food Programme for Iraq, calling upon all 191 member states to cooperate.
The definitive report was presented by Paul Volcker to the Security Council on 7 September 2005.
A leaked internal UN audit, which surfaced on mineweb.com, shows massive discrepancies between Cotecna reports and UN agency reports for the value of the shipments into northern Iraq. The audit found that Cotecna did no "value" inspections on nearly US$1 billion worth of aid shipments for the Inter-Agency Humanitarian Programme into northern Iraq. However, in a subsequent report published by the Independent Inquiry Committee (IIC) (October 27, 2005) it was concluded that “there were no major complaints by the United Nations or its member states about Cotecna’s performance” and that “the audit did not report any deficiencies in Cotecna’s inspections”. Benon Sevan
was briefed in December 2002 on the findings of the audit.
The audit is available here. Its summary states:
After reading the leaked audit, congressman Henry Hyde
wrote to Kofi Annan wondering why "The U.S. Congress — which provides 22 percent of the U.N.'s budget and which has publicly requested copies of the 55 internal audits — should be required to depend on media leaks for source documents."
used his position to solicit and receive allocations of oil from Iraq during the years he oversaw the humanitarian relief programme. Internal records from SOMO (Iraq's State Oil Marketing Organization), as well as interviews with former Iraqi officials involved in illicit oil deals, show that Sevan had requested and received allocations of 7.3 Moilbbl of oil on behalf of a Panama-registered trading company called African Middle East Petroleum Co.
Although the report makes no specific allegations of criminal activity by Sevan, Volcker does not rule out the possibility that charges might be filed by authorities in countries with relevant jurisdiction. The report called Sevan's conduct "ethically improper”, noting that Sevan had received large cash payments totalling $160,000 dollars each year he had headed the programme. Sevan claims the money came from an aunt in Cyprus who has since died, but the panel found no evidence to back this claim.
Volcker also reported in January that a review of 58 confidential UN internal OIF audits showed UN officials ignored early signs that humanitarian goods shipped to Iraq before the 2003 Invasion war were given little if any inspections by the Swiss company Cotecna. However, Volker concluded in the October 27, 2005 IIC report that “the audit did not report any deficiencies in Cotecna’s inspections”. Cotecna paid Kojo Annan
, Kofi Annan's son, consulting fees until November 2003. Volcker said that future reports would deal with questions regarding Kojo Annan.
had been selected by the Iraqi Governing Council to investigate the al Mada claims, along with Freshfields Bruckhaus Deringer
. It was due to release its findings to the Iraqi Governing Council
in May 2004. However, in June 2004, KPMG stopped working on the project because it was owed money by the IGC.
The US has been harshly critical of the KPMG probe led by associates of Ahmed Chalabi, accusing it of undermining the main probe established by Paul Bremer. That probe had been run by the head of Iraq's independent Board of Supreme Audit, Ehsan Karim, with assistance from Ernst & Young
. The Board of Supreme Audit is within the Iraqi Finance Ministry. In June 2004, Karim's investigation agreed to share information with the Volcker panel. However, on 1 July 2004, Karim was killed by a bomb magnetically attached to his car.
Claude Hankes-Drielsma, a British national and long-time friend of Ahmed Chalabi, was appointed by the IGC to coordinate its investigation of the Oil-for-Food Programme. Drielsma testified in front of the US Congress (on 21 April 2004) that the KPMG investigation "is expected to demonstrate the clear link between those countries which were quite ready to support Saddam Hussein's regime for their own financial benefit, at the expense of the Iraqi people, and those that opposed the strict application of sanctions and the overthrow of Saddam". He also testified that Chalabi was in charge of the investigation for the IGC.
In late May 2004, on the same day that Chalabi's offices at the Iraqi National Congress were raided by coalition forces, Drielsma claimed that an individual or individuals hacked into his computer and deleted every file associated with his investigation. He also claimed that "a back-up databank" was also deleted. When asked by Caludia Rosett if he had been physically threatened as well, Drielsma replied with "no comment". Drielsma has also been an outspoken critic of the UN's refusal to release any internal Oil-for-Food audit information to the IGC.
Austria:
Belarus:
Brazil:
Canada:
Yugoslav:
Other parties:
France:
Egypt:
Libya:
India:
Indonesia:
Italy:
Myanmar:
Palestine:
Qatar:
Spain:
Syria:
Switzerland:
Ukraine:
United Kingdom:
United States:
Other beneficiaries were companies and individuals from the Sudan, Yemen, Cyprus, Turkey, Vietnam, Bangladesh, Malaysia, Pakistan, Romania, the UAE, Morocco, Algeria, Tunisia, Panama, Thailand, Chad, China, Nigeria, Kenya, Ireland, Bahrain, and the Philippines as well as two Saudi Arabian companies.
, Jean-Bernard Mérimée and Serge Boidevaix. The two are accused of having used their extensive network of connections in the Arab world in order to commit "influence peddling" and "corruption of foreign public agents". They have been put under formal criminal investigation by investigating magistrate Philippe Courroye, a famous specialist in cases of corruption and other financial dealings. Both men had retired at the time of the alleged crimes and acted in their personal capacity, not as official envoys of the French government; however, Boidevaix claims that he kept the Ministry of Foreign Affairs informed of his actions in Iraq. The Ministry claims to have warned both men formally in 2001 (during the administration of Lionel Jospin
).
Some other people, including Bernard Guillet, an aide to French senator Charles Pasqua
, are also under formal investigation. Guillet and Pasqua deny any wrongdoing.
Norm Coleman
called for Kofi Annan
to resign over the scandal and held a number of hearings on the matter. The most spectacular of these hearings occurred after the subcommittee released a report that accused British
Member of Parliament
(MP) George Galloway
, Russia
n politician Vladimir Zhirinovsky
, and former French
Interior Minister Charles Pasqua
of receiving oil allocations from Iraq in return for being political allies of Saddam Hussein
's regime. Galloway, in an unusual appearance of a British MP before a US Senate subcommittee, responded angrily to the allegations against him in a confrontational public hearing which drew much media attention in both America and Britain http://news.bbc.co.uk/1/hi/uk_politics/4557369.stm. Galloway denied the allegations.
It is estimated that as much as $10 billion to $21.3 billion went unaccounted for and/or was directed to Saddam Hussein and his government in the form of kickbacks and oil smuggling. Record keeping of illegal behaviour is hard to come by and rare at best. To date, only 1 of 54 internal UN audits of the Oil-for-Food Programme have been made public. The UN has refused all requests for its audits.
In the US, the shortage of the strategic oil reserves became so apparent that many of the shipments to the US were "grossly short" to Southern California storage facilities. Several Senior Military Officer sought to hide the fact. However, very few US military officers filed insurance claims against the British insurance policies to try to recoup the cost of the "Shortage" in which several fraud stock scheme arose in late 1990 to present (MCI, FTL, ENRON and etc...).
Staff from the Senate investigations committee presented documentary evidence that the Bush administration was made aware of illegal oil sales and kickbacks paid to the Saddam Hussein regime but could do nothing to stop them. The Senate report concludes the United States ended up with a majority of the oil lifted from Iraq after vendors paid illicit surcharges of 10 cents to 30 cents a barrel to Saddam, though U.S. firms directly purchased a unknown percentage of the crude from the huge US Surplus food from the US Department of Agriculture. At the time, the US was providing shipments of wheat and corn to both France and Russia. However, the two countries to profit most from the programme were allegedly France and Russia. These two countries supported of efforts to lift the UN-imposed sanctions against Iraq and were also against the 2003 US-led invasion of Iraq.
Warren Hoge
alleged that the American government was aware of the scandal and chose to not prevent the smuggling because their allies Turkey and Jordan benefited from the majority of the smuggled oil. US Senator Carl Levin
(D-Michigan
) is quoted in an interview for the New York Times as saying, "There is no question that the bulk of the illicit oil revenues came from the open sale of Iraqi oil to Jordan and to Turkey, and that that was a way of going around the Oil-for-Food Programme [and that] we were fully aware of the bypass and looked the other way."
n businessman Tongsun Park was arrested by the FBI in Houston after he was indicted for illegally accepting millions of dollars from Iraq in the UN Oil-for-Food Programme. The criminal charges against him were unsealed in a U.S. District Court in Manhattan.
On January 16, 2007, Benon Sevan
was indicted by a Manhattan federal prosecutor for taking about $160,000 in bribes. Michael J. Garcia, the U.S. attorney from the Southern District of New York, issued a warrant through Interpol
for the arrest of Sevan at his home in Cyprus, as well as a warrant for Efraim "Fred" Nadler, a New York businessman who was indicted on charges of channelling the illegal payments to Sevan. Nadler's whereabouts are unknown.
vehicles was accused of violating the terms of the United Nations' Oil for Food Program with Iraq by including kickback
s 10 percent of the contract values to the Iraqi government. The SEC said the company earned more than $4 million from the sale of vehicles and spare parts.
The SEC case was sparked in 2004 after David Bazzetta, a former auditor at then DaimlerChrysler Corp, filed a whistle-blower complaint after he was fired for raising questions about bank account
s controlled by Mercedes-Benz units in South America. Bazzetta alleged that he learned in a July 2001 corporate audit executive committee
meeting in Stuttgart
that business units "continued to maintain secret bank accounts to bribe foreign government officials," though the company knew the practice violated U.S. laws.
The investigation for the case also revealed that Daimler made some $56 million in bribes related to more than 200 transactions in 22 countries that earned the company $1.9 billion in revenue and at least $91.4 million in illegal profits. "Using offshore bank accounts, third-party agents and deceptive pricing practices, these companies [Daimler AG and its subsidiaries] saw foreign bribery as a way of doing business," said Mythili Raman, a principal deputy in the Justice Department’s criminal division.
"It is no exaggeration to describe corruption and bribe-paying at Daimler as a standard business practice," Robert Khuzami
, director of the SEC's enforcement division, said in a statement.
Judge Richard J. Leon of United States District Court in Washington, approved the plea agreement and settlement, calling it a "just resolution."
2005
2004
United Nations
The United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
in 1995 (under UN Security Council
United Nations Security Council
The United Nations Security Council is one of the principal organs of the United Nations and is charged with the maintenance of international peace and security. Its powers, outlined in the United Nations Charter, include the establishment of peacekeeping operations, the establishment of...
Resolution 986
United Nations Security Council Resolution 986
United Nations Security Council Resolution 986, adopted unanimously on April 14, 1995, after reaffirming all resolutions on Iraq and noting the serious humanitarian situation with the Iraqi civilian population, the Council, acting under Chapter VII of the United Nations Charter, established a...
) was established with the stated intent to allow Iraq
Iraq
Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....
to sell oil
Petroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
on the world market in exchange for food
Food
Food is any substance consumed to provide nutritional support for the body. It is usually of plant or animal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals...
, medicine
Medicine
Medicine is the science and art of healing. It encompasses a variety of health care practices evolved to maintain and restore health by the prevention and treatment of illness....
, and other humanitarian needs for ordinary Iraqi citizens without allowing Iraq to boost its military capabilities.
The programme was introduced by United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
President
President of the United States
The President of the United States of America is the head of state and head of government of the United States. The president leads the executive branch of the federal government and is the commander-in-chief of the United States Armed Forces....
Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
's administration in 1995, as a response to arguments that ordinary Iraqi citizens were inordinately affected by the international economic sanctions
Economic sanctions
Economic sanctions are domestic penalties applied by one country on another for a variety of reasons. Economic sanctions include, but are not limited to, tariffs, trade barriers, import duties, and import or export quotas...
aimed at the demilitarisation
Demilitarized zone
In military terms, a demilitarized zone is an area, usually the frontier or boundary between two or more military powers , where military activity is not permitted, usually by peace treaty, armistice, or other bilateral or multilateral agreement...
of Saddam Hussein
Saddam Hussein
Saddam Hussein Abd al-Majid al-Tikriti was the fifth President of Iraq, serving in this capacity from 16 July 1979 until 9 April 2003...
's Iraq, imposed in the wake of the first Gulf War
Gulf War
The Persian Gulf War , commonly referred to as simply the Gulf War, was a war waged by a U.N.-authorized coalition force from 34 nations led by the United States, against Iraq in response to Iraq's invasion and annexation of Kuwait.The war is also known under other names, such as the First Gulf...
. The sanctions were discontinued on November 21, 2003 after the U.S. invasion
2003 invasion of Iraq
The 2003 invasion of Iraq , was the start of the conflict known as the Iraq War, or Operation Iraqi Freedom, in which a combined force of troops from the United States, the United Kingdom, Australia and Poland invaded Iraq and toppled the regime of Saddam Hussein in 21 days of major combat operations...
of Iraq, and the humanitarian functions turned over to the Coalition Provisional Authority
Coalition Provisional Authority
The Coalition Provisional Authority was established as a transitional government following the invasion of Iraq by the United States and its allies, members of the Multi-National Force – Iraq which was formed to oust the government of Saddam Hussein in 2003...
.
The programme was de jure terminated in 2003 and de facto terminated in 2010. As the programme ended, there were revelations of corruption involving the funds.
Background and design
The Oil-for-Food Programme was instituted to relieve the extended suffering of civilians as the result of the comprehensive sanctions on Iraq from the UN, following Iraq's invasion of KuwaitKuwait
The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
in August 1990.
Security Council Resolution 706
United Nations Security Council Resolution 706
United Nations Security Council Resolution 706 decided on a mechanism to allow Iraq to sell oil in return for humanitarian aid from Member States. The Council, acting under Chapter VII, adopted the resolution on August 15, 1991, after recalling resolutions 661 , 686 , 687 , 688 , 692 , 699 and 705...
of August 15, 1991 was introduced to allow the sale of Iraqi oil in exchange for food.
Security Council Resolution 712
United Nations Security Council Resolution 712
United Nations Security Council Resolution 712, adopted on September 19, 1991, after recalling resolutions 661 , 686 , 687 , 688 , 692 , 699 , 705 and 706 , the Council, acting under Chapter VII, reaffirmed and discussed provisions of Resolution 706 and called for international co-operation.The...
of September 19, 1991 confirmed that Iraq could sell up to $
United States dollar
The United States dollar , also referred to as the American dollar, is the official currency of the United States of America. It is divided into 100 smaller units called cents or pennies....
1.6 billion in oil to fund an Oil-For-Food Programme.
After an initial refusal, Iraq signed a memorandum of understanding
Memorandum of understanding
A memorandum of understanding is a document describing a bilateral or multilateral agreement between parties. It expresses a convergence of will between the parties, indicating an intended common line of action. It is often used in cases where parties either do not imply a legal commitment or in...
(MOU) in May 1996 for arrangements to be taken for the implementation of that resolution.
The Oil-for-Food Programme started in December 1996, and the first shipments of food arrived in March 1997. Sixty percent of Iraq's twenty-six million people were solely dependent on rations from the oil-for-food plan.
The programme used an escrow
Escrow
An escrow is:* an arrangement made under contractual provisions between transacting parties, whereby an independent trusted third party receives and disburses money and/or documents for the transacting parties, with the timing of such disbursement by the third party dependent on the fulfillment of...
system. Oil exported from Iraq was paid for by the recipient into an escrow account possessed until 2001 by BNP Paribas
BNP Paribas
BNP Paribas S.A. is a global banking group, headquartered in Paris, with its second global headquarters in London. In October 2010 BNP Paribas was ranked by Bloomberg and Forbes as the largest bank and largest company in the world by assets with over $3.1 trillion. It was formed through the merger...
bank, rather than to the Iraqi government. The money was then apportioned to pay for war reparations
War reparations
War reparations are payments intended to cover damage or injury during a war. Generally, the term war reparations refers to money or goods changing hands, rather than such property transfers as the annexation of land.- History :...
to Kuwait
Kuwait
The State of Kuwait is a sovereign Arab state situated in the north-east of the Arabian Peninsula in Western Asia. It is bordered by Saudi Arabia to the south at Khafji, and Iraq to the north at Basra. It lies on the north-western shore of the Persian Gulf. The name Kuwait is derived from the...
, ongoing coalition and United Nations operations within Iraq. The remainder, the majority of the revenue, was available to the Iraqi government to purchase regulated items.
The Iraqi government was permitted to purchase only items that were not embargo
Embargo
An embargo is the partial or complete prohibition of commerce and trade with a particular country, in order to isolate it. Embargoes are considered strong diplomatic measures imposed in an effort, by the imposing country, to elicit a given national-interest result from the country on which it is...
ed under the economic sanctions. Certain items, such as raw foodstuffs, were expedited for immediate shipment, but requests for most items, including such simple things as pencil
Pencil
A pencil is a writing implement or art medium usually constructed of a narrow, solid pigment core inside a protective casing. The case prevents the core from breaking, and also from marking the user’s hand during use....
s and folic acid
Folic acid
Folic acid and folate , as well as pteroyl-L-glutamic acid, pteroyl-L-glutamate, and pteroylmonoglutamic acid are forms of the water-soluble vitamin B9...
, were reviewed in a process that typically took about six months before shipment was authorized. Items deemed to have any potential application in chemical, biological or nuclear weapons systems development were not available to the regime, regardless of stated purpose.
Financial statistics
Over US$65 billion worth of IraqIraq
Iraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....
i oil was sold on the world market. About US$46 billion of these funds were intended to provide for the humanitarian
Humanitarianism
In its most general form, humanitarianism is an ethic of kindness, benevolence and sympathy extended universally and impartially to all human beings. Humanitarianism has been an evolving concept historically but universality is a common element in its evolution...
needs of Iraqi people such as food
Food
Food is any substance consumed to provide nutritional support for the body. It is usually of plant or animal origin, and contains essential nutrients, such as carbohydrates, fats, proteins, vitamins, or minerals...
and medicine
Medicine
Medicine is the science and art of healing. It encompasses a variety of health care practices evolved to maintain and restore health by the prevention and treatment of illness....
in the context of international economic sanctions
Economic sanctions
Economic sanctions are domestic penalties applied by one country on another for a variety of reasons. Economic sanctions include, but are not limited to, tariffs, trade barriers, import duties, and import or export quotas...
. A considerable amount was spent for Gulf War reparations through a compensation fund (25 percent since December 2000); UN administrative and operational costs for the programme (2.2 percent) and costs for the weapons inspection programme. Internal audits have not been made public.
Initial support and criticism
The programme was conceived as a way of mitigating the impact of the sanctions against Iraq on ordinary Iraqis. The most fundamental criticism of the programme was that this was a stop-gap solution that was bound to strengthen Saddam Hussein's position, potentially preserving the survival of his government.Alternatively, if the sanctions were too harmful for Iraqis to sustain, critics argued, the sanctions should be removed (excepting clearly military items). Critics claimed that the Oil-for-Food Programme was responsible, under the blockage of dual-use equipment, for preventing Iraq from repairing the water purification and medical systems destroyed by the initial sanctions and during 1991 Gulf War, and others challenged the programme on the grounds that it would not permit Iraq to import the food and medicine necessary to prevent millions of easily preventable deaths. Former programme heads such as Hans von Sponeck
Hans von Sponeck
Hans Christof Graf von Sponeck was born 1939 in Bremen, Germany, the son of Hans Graf von Sponeck. He served as a UN Assistant Secretary-General and UN Humanitarian Coordinator for Iraq. In 1957 he was one of the first conscientious objectors in the Federal Republic of Germany...
questioned whether the sanctions should exist at all. Von Sponeck, speaking in University of California, Berkeley
University of California, Berkeley
The University of California, Berkeley , is a teaching and research university established in 1868 and located in Berkeley, California, USA...
in late 2001, decried the proposed "Smart Sanctions", stating, "What is proposed at this point in fact amounts to a tightening of the rope around the neck of the average Iraqi citizen"; claimed that the sanctions were causing the death of 150 Iraqi children per day; and accused the US and Britain of arrogance toward Iraq, such as refusing to let it pay its UN and OPEC dues and blocking Iraqi attempts at negotiation.
Supporters viewed the programme as a way to keep Saddam Hussein in check without resorting to war.
The Clinton Administration opposed further liberalization of the proposal, which was pursued by both Russia and France.
End of the programme
Shortly before USUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
and British
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
forces invaded Iraq
2003 invasion of Iraq
The 2003 invasion of Iraq , was the start of the conflict known as the Iraq War, or Operation Iraqi Freedom, in which a combined force of troops from the United States, the United Kingdom, Australia and Poland invaded Iraq and toppled the regime of Saddam Hussein in 21 days of major combat operations...
, UN Secretary-General Kofi Annan
Kofi Annan
Kofi Atta Annan is a Ghanaian diplomat who served as the seventh Secretary-General of the UN from 1 January 1997 to 31 December 2006...
suspended the programme and evacuated more than 300 workers monitoring the distribution of supplies.
On 28 March 2003, Secretary-General Annan, the United States, and Britain asked the Security Council to ensure that nearly US$10 billion in goods Iraq ordered and already approved, including US$2.4 billion for food, could enter the country when conditions allow. The resolution under discussion made clear that the chief responsibility for addressing humanitarian consequences of the war would fall to the United States and Britain if they took control of the country. This refers to the 1949 Fourth Geneva Convention
Fourth Geneva Convention
The Geneva Convention relative to the Protection of Civilian Persons in Time of War, commonly referred to as the Fourth Geneva Convention and abbreviated as GCIV, is one of the four treaties of the Geneva Conventions. It was adopted in August 1949, and defines humanitarian protections for civilians...
on the responsibilities of the occupying power.
On 22 May 2003, UN Security Council Resolution 1483 granted authority to the Coalition Provisional Authority
Coalition Provisional Authority
The Coalition Provisional Authority was established as a transitional government following the invasion of Iraq by the United States and its allies, members of the Multi-National Force – Iraq which was formed to oust the government of Saddam Hussein in 2003...
to use Iraq's oil revenue. The programme's remaining funds of $10 billion were transferred over a 6 month winding-up period to the Development Fund for Iraq
Development Fund for Iraq
In May 2003, following the invasion of Iraq in March of that year, the Central Bank of Iraq-Development Fund for Iraq account was created at the U.S. Federal Reserve Bank of New York at the request of the Coalition Provisional Authority Administrator...
under the Coalition Provisional Authority's control; this represented 14% of the programme's total income over 5 years.
The programme was formally terminated on 21 November 2003 and its major functions were turned over to the Coalition Provisional Authority
Coalition Provisional Authority
The Coalition Provisional Authority was established as a transitional government following the invasion of Iraq by the United States and its allies, members of the Multi-National Force – Iraq which was formed to oust the government of Saddam Hussein in 2003...
.
Abuse
In addition to criticism of the basic approach, the programme suffered from widespread corruption and abuse. Throughout its existence, the programme was dogged by accusations that some of its profits were unlawfully diverted to the government of Iraq and to UN officials. These accusations were made in many countries, including the US and Norway.Benon Sevan
Benon Sevan
Benon Vahe Sevan was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food, medicine and other items to benefit the civilian population.Born into an Armenian-Cypriot...
of Cyprus
Cyprus
Cyprus , officially the Republic of Cyprus , is a Eurasian island country, member of the European Union, in the Eastern Mediterranean, east of Greece, south of Turkey, west of Syria and north of Egypt. It is the third largest island in the Mediterranean Sea.The earliest known human activity on the...
, who headed the programme, defended it, claiming that it had only a 2.2% administrative cost and that it was subject to more than 100 audits (internal and external), blaming restrictions from the Security Council for making the situation difficult. He also claimed that 90% of Iraq's population relied on the programme for its monthly food basket. While Benon Sevan was in charge of the programme, he stonewalled efforts to review and investigate the programme. He ordered his staff that complaints about illegal payoffs should be formally filed with the whistleblower
Whistleblower
A whistleblower is a person who tells the public or someone in authority about alleged dishonest or illegal activities occurring in a government department, a public or private organization, or a company...
's country, making them public and allowing Iraq to bar any whistleblowers. In 2000, Dileep Nair
Dileep Nair
Dileep Nair was the United Nations Under-Secretary-General for Internal Oversight Services and head of the United Nations Office of Internal Oversight Services. In that capacity, he oversaw investigations of wrong doings related to the United Nations in a range of countries including within the...
, the UN corruption watchdog, wanted to determine the programme's level of vulnerability. Sevan, along with UN Deputy Secretary-General, Louise Frechette
Louise Fréchette
Louise Fréchette, OC was United Nations Deputy Secretary-General for eight years, and a long-time Canadian diplomat and public servant...
, rejected any such investigation, claiming that it would be too expensive to be worthwhile. Sevan ordered the shredding of years' worth of documents concerning the programme.
In response to these criticisms, and to evidence acquired after the United States invasion of Iraq, UN Secretary-General accusations were made that skimmed profits were being used to buy influence at the UN and with Kofi Annan
Kofi Annan
Kofi Atta Annan is a Ghanaian diplomat who served as the seventh Secretary-General of the UN from 1 January 1997 to 31 December 2006...
himself.
According to an interim report released on February 3, 2005 by former Federal Reserve chairman Paul Volcker
Paul Volcker
Paul Adolph Volcker, Jr. is an American economist. He was the Chairman of the Federal Reserve under United States Presidents Jimmy Carter and Ronald Reagan from August 1979 to August 1987. He is widely credited with ending the high levels of inflation seen in the United States in the 1970s and...
's commission (see #Investigations below), much of the food aid supplied under the programme "was unfit for human consumption". The report concluded that Sevan had accepted nearly $150,000 in bribes over the course of the programme, and in 2005 he was suspended from his position at the United Nations as a result of the investigation of fraud in the programme.
Peter van Walsum
Peter van Walsum
A. Peter van Walsum is a Dutch diplomat who served as United Nations Secretary-General's Personal Envoy for Western Sahara...
, the now-retired Ambassador of the Netherlands
Netherlands
The Netherlands is a constituent country of the Kingdom of the Netherlands, located mainly in North-West Europe and with several islands in the Caribbean. Mainland Netherlands borders the North Sea to the north and west, Belgium to the south, and Germany to the east, and shares maritime borders...
to the United Nations and chairman of the Iraq Sanctions Committee from 1999 to 2000, speculated in a recent book that Iraq deliberately divided the Security Council by awarding contracts to France
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
, Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
, and China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
but not to the United Kingdom
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
and the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. He also stated he encountered a number of cases in which he felt the lack of Iraqi cooperation was designed to exacerbate the suffering of its own people. He also claimed that it was his opinion that the sanctions were not an effective deterrent.
Until 2001, the money for the Oil-for-Food Programme transited through the BNP Paribas bank
BNP Paribas
BNP Paribas S.A. is a global banking group, headquartered in Paris, with its second global headquarters in London. In October 2010 BNP Paribas was ranked by Bloomberg and Forbes as the largest bank and largest company in the world by assets with over $3.1 trillion. It was formed through the merger...
, whose main private share-holder is Iraqi-born Nadhmi Auchi
Nadhmi Auchi
Nadhmi Shakir Auchi, , is a British Iraqi businessman and billionaire, founding president of the Anglo Arab Organisation, and the founder and chairman of General Mediterranean Holding , a conglomerate of 120 companies worldwide...
, a man estimated to be worth about $1 billion according to Forbes, and ranks 13th in Britain according to The Guardian
The Guardian
The Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...
. Auchi received a 15-month suspended sentence for his involvement in the Elf scandal
Elf Aquitaine
Elf Aquitaine was a French oil company which merged with TotalFina to form TotalFinaElf. The new company changed its name to Total in 2003...
, which has been qualified by the British newspaper as "the biggest fraud inquiry in Europe since the Second World War. Elf became a private bank for its executives who spent £200 million on political favours, mistresses, jewellery, fine art, villas and apartments". Elf, an oil company, merged with TotalFina
Total S.A.
Total S.A. is a French multinational oil company and one of the six "Supermajor" oil companies in the world.Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and...
to become Total S.A.
Total S.A.
Total S.A. is a French multinational oil company and one of the six "Supermajor" oil companies in the world.Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and...
in 2003.
al Mada list
One of the earliest allegations of wrongdoing in the programme surfaced on 25 January 2004, when al Mada, a daily newspaper in Iraq, published a list of individuals and organizations alleged to have received oil sales contracts via the UN's Oil-for-Food Programme. The list came from over 15,000 documents which were reportedly found in the state-owned Iraqi oil corporation, which had close links to the Iraqi Oil Ministry.Named in the list of beneficiaries were British
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
MP George Galloway
George Galloway
George Galloway is a British politician, author, journalist and broadcaster who was a Member of Parliament from 1987 to 2010. He was formerly an MP for the Labour Party, first for Glasgow Hillhead and later for Glasgow Kelvin, before his expulsion from the party in October 2003, the same year...
and his charity, the Mariam Fund; former French Interior Minister Charles Pasqua
Charles Pasqua
Charles Pasqua is a French businessman and Gaullist politician. He was Interior Minister from 1986 to 1988, under Jacques Chirac's cohabitation government, and also from 1993 to 1995, under the government of Edouard Balladur...
; and Shaker al-Kaffaji, an Iraqi-American businessman, India's foreign minister, Natwar Singh, was removed from office because of his role in the scandal. Many prominent Russian firms and individuals were also included on the al Mada list. Even the Russian Orthodox Church was supposedly involved in illegal oil trading. The former assistant to the Vatican secretary of state, Reverend Jean-Marie Benjamin
Jean-Marie Benjamin
The Rev. Jean-Marie Benjamin is a priest who once worked as an assistant to the Vatican secretary of state and became an activist for lifting Iraq sanctions prior to the 2003 Invasion of Iraq. He is reported to have set up the meeting between former Pope John Paul II and Tariq Aziz, Iraq's foreign...
, is said to have received rights to sell 4.5 Moilbbl. George Galloway subsequently won two libel actions against the Christian Science Monitor and Daily Telegraph, which reported the allegations.
The president of Oilexco Ltd, Arthur Millholland, whose name also appeared on the al Mada list, denied any wrongdoing, but confirms the charges that illegal surcharges were being paid to the Iraqi government by contractors. However, the al Mada list does not discuss bribes paid to Iraq - it discusses bribes paid to individuals so that they would support Iraq. Few deny that in Iraq, like in many third-world countries, bribes and kickbacks were regularly paid to the leadership in order to get contracts, but some suggest that kickbacks would normally not occur in such countries when a UN-run programme was involved.
Operation of the scheme
The scheme is alleged to have worked in this way: individuals and organizations sympathetic to the Iraqi regime, or those just easily bribed, were offered oil contracts through the Oil-for-Food Programme. These contracts for Iraqi oil could then be sold on the open world market and the seller was allowed to keep a transaction fee, said to be between $0.15 and $0.50/barrel (0.94 and 3.14 $/m³) of oil sold. The seller was then to refund the Iraqi government a certain percentage of the commission.Contracts to sell Iraq humanitarian goods through the Oil-for-Food Programme were given to companies and individuals based on their willingness to kick back a certain percentage of the contract profits to the Iraqi regime. Companies that sold commodities via the Oil-for-Food Programme were overcharging by up to 10%, with part of the overcharged amount being diverted into private bank accounts for Saddam Hussein and other regime officials and the other part being kept by the supplier.
The involvement of the UN itself in the scandal began in February 2004 after the name of Benon Sevan
Benon Sevan
Benon Vahe Sevan was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food, medicine and other items to benefit the civilian population.Born into an Armenian-Cypriot...
, executive director of the Oil-for-Food Programme, appeared on the Iraqi Oil Ministry's documents. Sevan allegedly was given vouchers for at least 11,000,000 barrels (1,700,000 m³) of oil, worth some $3.5 million in personal profit. Sevan has denied the charges.
BNP
The sole bank handling funds transfers for the Oil-for-Food Programme was the New York branch of the Banque Nationale de Paris-Paribas, or BNP Paribas. This French bank was the sole bank administering the $64 billion UN programme. An investigation by the US House Committee on International RelationsUnited States House Committee on International Relations
The Committee on Foreign Affairs of the U.S. House of Representatives, also known as the House Foreign Affairs Committee, is a standing committee of the United States House of Representatives which has jurisdiction over bills and investigations related to the foreign affairs of the United States...
found that BNP Paribas made payments without proof that goods were delivered and sanctioned payments to third parties not identified as authorized recipients. Investigators estimate that the bank received more than $700 million in fees under the UN programme that began in 1996 and ended after the ousting of Saddam in March 2003.
Duelfer Report
The Iraq Survey GroupIraq Survey Group
The Iraq Survey Group was a fact-finding mission sent by the multinational force in Iraq after the 2003 invasion of Iraq to find the alleged weapons of mass destruction alleged to be possessed by Iraq that had been the main ostensible reason for the invasion. Its final report is commonly called...
, which was tasked with finding evidence of weapons of mass destruction
Weapons of mass destruction
A weapon of mass destruction is a weapon that can kill and bring significant harm to a large number of humans and/or cause great damage to man-made structures , natural structures , or the biosphere in general...
in Iraq, found that OFF saved the Iraqi economy from decline after the imposition of sanctions. Furthermore, the Iraqi regime found that it could corrupt OFF to get hard currency
Hard currency
Hard currency , in economics, refers to a globally traded currency that is expected to serve as a reliable and stable store of value...
that could be used to manipulate the Iraq Sanctions Committee and undermine sanctions as well as increase arms.
The final official version of the Iraq Survey Group report (Duelfer Report) cites only France, Russia and China (countries who were also strongly anti-war) as violators who paid kickbacks. According to the report, the top three recipients of oil included Russia (30%), France (15%), and China (10%), which are on the UN Security Council. The US received 2–3%. The US recipients included Exxon Mobil Corp., ChevronTexaco Corp. and El Paso Corp.
El Paso Corp.
El Paso Corporation , provides natural gas and related energy products and is one of North America's largest natural gas producers. It is headquartered in Houston, Texas. United States....
The list of US companies were originally censored by CIA lawyers, citing privacy issues, but was later leaked.
| Nationality of Recipients | Oil Volume Given (% of Total) |
|---|---|
 Russia |
30 |
 Early Modern France |
15 |
 Mainland China |
10 |
 Switzerland |
6 |
 Malaysia |
5 |
 Syria |
6 |
 Jordan |
4 |
 Egypt |
4 |
| Other (inc. US) | 20 |
On June 5, 2007, the German chapter of the anti-corruption organisation Transparency International (TI) lodged a complaint with the German Federal Ministry of Economics and Technology (BMWi) against 57 German companies for allegedly paying $11.9m in kickbacks in the United Nations’ Oil for Food Programme in Iraq.
Oil coupons as bribes
The US-funded satellite network Al Hurra broadcast a story on January 6, 2005 detailing allegations that Saddam's regime had bribed news reporters with oil coupons. Reporters named include Ahmed MansourAhmed Mansour
Ahmed Mansour is an Egyptian television presenter and interviewer. He presents Bela Hodod , an Arab live television talk show from Cairo, which airs on Al Jazeera Channel weekly. He also presents the program Shahed Ala Al-Asr. In 2009, he published the book "Inside Fallujah: the Unembedded...
of Al Jazeera
Al Jazeera
Al Jazeera is an independent broadcaster owned by the state of Qatar through the Qatar Media Corporation and headquartered in Doha, Qatar...
and Hamida Naanaa, a writer based in France and known for her pro-Saddam slant. Two types of oil coupons were used: silver coupons that entitled holders to nine million barrels of oil, and gold coupons that were worth more. Hamida Naanaa is said to have received a gold coupon.
Ingersoll-Rand pays $2.5m in fines for kickbacks
In October 2007,the SEC brought a case against Ingersoll-Rand that three different subsidiaries paid kickbacks to Iraqi Government officials. Ingersoll-Rand's German subsidiary ABG, subsidiary I-R Italiana and the Irish subsidiary Thermo-King paid kickbacks characterized as "after-sales service fees" ("ASSFs"), but no bona fide services were performed. Ingersoll-Rand, without admitting or denying the allegations in the commission's complaint, consented to the entry of a final judgment permanently enjoining it from future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, ordering it to disgorge $1,710,034 in profits, plus $560,953 in pre-judgment interest, and to pay a civil penalty of $1,950,000. Ingersoll-Rand is also ordered to comply with certain undertakings regarding its FCPA compliance program. Ingersoll-Rand will also pay a $2,500,000 fine pursuant to a deferred prosecution agreement with the U.S. Department of Justice, Fraud Section.Complaints by Kurds
The Kurds had complained since the start of the programme that they were not being paid their fair share of the oil revenues. According to the guidelines set up by the Oil-for-Food Programme, the revenues were to be divided up in such a way as to protect Iraq's predominantly Kurdish regions. The allegations include claims that the Cairo office of the UN's World Health OrganizationWorld Health Organization
The World Health Organization is a specialized agency of the United Nations that acts as a coordinating authority on international public health. Established on 7 April 1948, with headquarters in Geneva, Switzerland, the agency inherited the mandate and resources of its predecessor, the Health...
, run by an individual alleged to have received oil sales contracts, managed to stall the building of a new general hospital for the Kurdish city of Sulaymaniya, even though the funds for the project had been available since 1998.
Potential Annan link
On June 14, 2005, two 1998 memos surfaced that appeared to link Kofi Annan to Cotecna Inspection S.A. The first one described a meeting between Annan and Cotecna while the company was bidding on the programme, after which the company raised its bid. A second one mentioned that Cotecna was confident that they would get the bid due to "effective but quiet lobbyingLobbying
Lobbying is the act of attempting to influence decisions made by officials in the government, most often legislators or members of regulatory agencies. Lobbying is done by various people or groups, from private-sector individuals or corporations, fellow legislators or government officials, or...
" in New York diplomatic circles. The source of the documents was a Cotecna executive.
The Second Interim Report by the IIC confirmed that Cotecna indeed won the Oil for Food contract fairly and based on merit. The Committee concluded that there was no link between Kofi Annan and the award of Cotecna’s contract; and Cotecna has been transparent and cooperative through this investigation.
Alleged involvement of Russian intelligence
According to high-ranking Russian SVRForeign Intelligence Service (Russia)
The Russian Foreign Intelligence Service is Russia's primary external intelligence agency. The SVR is the successor of the First Chief Directorate of the KGB since December 1991...
defector Tretyakov
Sergei Tretyakov (intelligence officer)
Colonel Sergei Tretyakov was a Russian SVR officer who defected to the United States in October 2000.-Biography:...
, the Oil-for-Food program was sabotaged by an undercover Russian intelligence officer Alexander Kramar who worked in the UN. Kramar set up the artificially low oil prices in 1998 to allow Saddam to use the oil vouchers as lucrative bribes. The difference between the market price and the artificial price (defined by Kramar) was pocketed by people who received the vouchers from Saddam. Among the bribed were top officials from Russia, France, and China. The biggest part of vouchers (to buy 1366 Goilbbl of oil) went to forty-six individuals or organizations in Russia, including Russian Orthodox Church
Russian Orthodox Church
The Russian Orthodox Church or, alternatively, the Moscow Patriarchate The ROC is often said to be the largest of the Eastern Orthodox churches in the world; including all the autocephalous churches under its umbrella, its adherents number over 150 million worldwide—about half of the 300 million...
. They pocketed $476 million. Among Russians who received the money were Alexander Voloshin
Alexander Voloshin
Alexander Staliyevich Voloshin is a Russian politician who briefly was chairman of the Board of Directors of RAO UES, the former Russian state power utility, which was liquidated as part of the country's comprehensive power sector reforms on 1 July 2008.In 1997, he was appointed as an assistant...
and Vladimir Zhirinovsky
Vladimir Zhirinovsky
Vladimir Volfovich Zhirinovsky is a Russian politician, colonel of the Russian Army, founder and the leader of the Liberal Democratic Party of Russia , Vice-Chairman of the State Duma, and a member of the Parliamentary Assembly of the Council of Europe....
. Sergei Isakov, a buddy of Voloshin, carried bags with money from Moscow to Baghdad to return some of the "earned" money as kickbacks to Saddam.
Allegedly used to finance Al-Qaeda
The scandal engulfing the United Nations Procurement Department and the Oil-for-Food Programme allegedly involved Al-QaedaAl-Qaeda
Al-Qaeda is a global broad-based militant Islamist terrorist organization founded by Osama bin Laden sometime between August 1988 and late 1989. It operates as a network comprising both a multinational, stateless army and a radical Sunni Muslim movement calling for global Jihad...
finance operations. Fox News broke the story that Alexander Yakovlev, a Russian official in the UN Procurement Department, was involved; he later resigned and pled guilty to corruption charges. One link was to Ahmed Idris Nasreddin, a man designated as a terrorist financier by the US and the UN. The UN has named Nasreddin as a man "belonging to or affiliated with Al Qaeda
Al-Qaeda
Al-Qaeda is a global broad-based militant Islamist terrorist organization founded by Osama bin Laden sometime between August 1988 and late 1989. It operates as a network comprising both a multinational, stateless army and a radical Sunni Muslim movement calling for global Jihad...
." Petra Navigation Group was a company that was on the blacklist of firms blocked from doing business with the U.S. for sanctions-busting activities designed to help Saddam's regime.
Allegations against George Galloway
The U.S. Subcommittee on Investigations claimed that British Member of Parliament George GallowayGeorge Galloway
George Galloway is a British politician, author, journalist and broadcaster who was a Member of Parliament from 1987 to 2010. He was formerly an MP for the Labour Party, first for Glasgow Hillhead and later for Glasgow Kelvin, before his expulsion from the party in October 2003, the same year...
, among others, was the recipient of approximately $600,000 of illegal oil kickbacks from the Iraqi regime. During testimony before the committee on May 17, 2005, Galloway stated that the charges were false and part of a diversionary "smoke screen" by pro-Iraq war U.S. politicians designed to deflect attention from the "theft of billions of dollars of Iraq's wealth..." that had occurred under the post-invasion Coalition Provisional Authority. A later October 25, 2005 report prepared by the subcommittee's majority staff claimed to have evidence that Galloway was "false or misleading" during his Senate testimony, and further that his then-wife (since divorced) received some of the kickbacks. A second new element to the accusations is the subcommittee's claim that former Iraqi foreign minister Tariq Aziz
Tariq Aziz
Tariq Aziz and Deputy Prime Minister of Iraq and a close advisor of former President Saddam Hussein. Their association began in the 1950s when both were activists for the then-banned Ba'ath Arab Socialist Party...
, imprisoned without charges in a secret location since early 2003, has verified them. However, Aziz's lawyer Badia Aref states, "these are lies ... he (Aziz) denied this." Galloway continues to deny wrongdoing and challenged the former Subcommittee's chairman, Senator Norm Coleman
Norm Coleman
Norman Bertram Coleman, Jr. is an American attorney and politician. He was a United States senator from Minnesota from 2003 to 2009. Coleman was elected in 2002 and served in the 108th, 109th, and 110th Congresses. Before becoming a senator, he was mayor of Saint Paul, Minnesota, from 1994 to 2002...
, to charge him with perjury.
Oil for wheat
A report by UN investigator Paul Volcker, released in October 2005, found that the Australian Wheat BoardAWB Limited
AWB Limited is a major grain marketing organisation based in Australia. It was a government body known as the Australian Wheat Board until 1 July 1999, when the AWB was transformed into a private company, owned by wheat growers...
, later AWB Limited, was the biggest single source of kickbacks. In exchange for trouble-free disembarkation of wheat purchased under the Oil-for-Food Programme, the Australian Wheat Board paid 'trucking charges' totalling $AU300 million to Alia. Alia is a real Jordanian trucking company, but one with no role in the distribution of Australian wheat in Iraq. Alia kept a small percentage of 'charges', and passed the remainder to Saddam's government. The AWB was fully compensated for the charges by increases in the price paid; the payments were approved by the Australian Department of Foreign Affairs and Trade
Department of Foreign Affairs and Trade (Australia)
The Department of Foreign Affairs and Trade is a department of the government of Australia charged with advancing the interests of Australia and its citizens internationally...
. The Australian Government commissioned judge Terence Cole to further investigate whether Australian companies had indeed paid kickbacks to the Saddam regime. The Cole Inquiry
Cole Inquiry
The Cole Inquiry, formally the Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme was a Royal Commission set up by the Government of Australia in November 2005...
commenced in December 2005. The Cole Inquiry has received testimony from senior Australian Government officials, including Prime Minister John Howard, Deputy Prime Minister Mark Vaile, Foreign Minister Alexander Downer and various officials from the Department of Foreign Affairs and Trade. During the course of the inquiry numerous AWB officials have resigned, including Managing Director Andrew Lindberg
Andrew Lindberg
Andrew Lindberg B.Sc., B.Comm., MBA, FAICD is an Australian businessman....
. In 2009, the Australian Federal Police ended the investigation related to the scandal.
GAO investigation
After the 2003 Invasion of Iraq and subsequent Coalition victory over the Iraqi army, the Government Accountability OfficeGovernment Accountability Office
The Government Accountability Office is the audit, evaluation, and investigative arm of the United States Congress. It is located in the legislative branch of the United States government.-History:...
(GAO) was given the task of finalizing all Oil-for-Food related supply contracts made with the now-defunct regime as well as tracking down the personal fortunes of former regime members. During the execution of this task, the GAO found weaknesses in the programme that allowed kickbacks and other sources of wealth for Saddam Hussein.
The GAO estimates that the Saddam Hussein regime generated $10.1 billion in illegal revenues. This figure includes $5.7 billion from oil smuggling and $4.4 billion in illicit surcharges on oil sales and after-sales charges on suppliers. The scale of the fraud was far more extensive than the GAO had previously estimated. A U.S. Department of Defense
United States Department of Defense
The United States Department of Defense is the U.S...
study, cited by the GAO, evaluated 759 contracts administered through the Oil-for-Food Programme and found that nearly half had been overpriced, by an average of 21 percent. Unlike the 661 committee, members of the Security Council had the authority to launch investigations into contracts and to stop any contract they did not like. The British and the Americans had turned down hundreds of Oil-for-Food contract requests, but these were blocked primarily on the grounds that the items being imported were dual-use technologies.
To quote the GAO report, in its summary:
- Both the U.N. Secretary General, through the Office of the Iraqi Programme (OIP) and the Security Council, through its sanctions committee for Iraq, were responsible for overseeing the Oil-for-Food Programme. However, the Iraqi government negotiated contracts directly with purchasers of Iraqi oil and suppliers of commodities, which may have been one important factor that allowed Iraq to levy illegal surcharges and commissions.
Joseph A. Christoff, director of international affairs and trade at the General Accounting Office, told a House hearing that UN auditors had refused to release the internal audits of the Oil-for-Food Programme. Benon Sevan
Benon Sevan
Benon Vahe Sevan was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food, medicine and other items to benefit the civilian population.Born into an Armenian-Cypriot...
, with support from Kofi Annan
Kofi Annan
Kofi Atta Annan is a Ghanaian diplomat who served as the seventh Secretary-General of the UN from 1 January 1997 to 31 December 2006...
, had written letters to all former Oil-for-Food contractors asking them to consult Sevan before releasing any documents to GAO or US congressional inquiry panels. Throughout its history, the programme had received both complaints from critics saying that it needed to be more open and complaints from companies about proprietary information being disclosed.
The United Nations has denied all requests by the GAO for access to confidential internal audits of the Oil-for-Food Programme.
While attempting to determine the complexity of the Oil-for-Food Programme for articles in The Wall Street Journal
The Wall Street Journal
The Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
, investigative journalist Claudia Rosett
Claudia Rosett
Claudia Rosett is an American writer and journalist. She is journalist-in-residence at the Foundation for the Defense of Democracies, a policy institute based in Washington, D.C. A former staff writer for The Wall Street Journal, she writes a weekly column for Forbes, blogs for Pajamas Media, and...
of the Foundation for the Defence of Democracies and the Hudson Institute
Hudson Institute
The Hudson Institute is an American think tank founded in 1961, in Croton-on-Hudson, New York, by futurist, military strategist, and systems theorist Herman Kahn and his colleagues at the RAND Corporation...
discovered that the UN treated details such as the identities of Oil-for-Food contractors; the price, quantity and quality of goods involved in the relief deals; and the identities of the oil buyers and the precise quantities that they received as confidential. The bank statements, the interest paid, and the transactions were all secret as well. Rosett has come under harsh criticism from Denis Halliday
Denis Halliday
Denis J. Halliday was the United Nations Humanitarian Coordinator in Iraq from September 1, 1997, until 1998. He is Irish and holds an M.A. in Economics, Geography and Public Administration from Trinity College, Dublin....
and Benon Sevan
Benon Sevan
Benon Vahe Sevan was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food, medicine and other items to benefit the civilian population.Born into an Armenian-Cypriot...
, who have claimed that many of Rosett's claims (such as Oil-for-Food funding the approval of an Olympic stadium, and where responsibility for various issues lay according to the UN resolutions) were incorrect.
The US House Committee on International Relations investigated the Oil-for-Food Programme and discovered that money was provided by Sabah Yassen, the former Iraqi ambassador to Jordan, to pay the families of Palestinian suicide bombers
Suicide Bombers
Suicide Bombers is the name of a 2005 EP by Leæther Strip. For the Australian hardcore band see Suicide Bombers -Track listing:# Suicide Bombers# Suicide Bombers # The Shame Of A Nation # This Is Where I Wanna Be...
between $15,000 to $25,000. From September 2000 until the invasion of Iraq, the families of Palestinians killed or wounded in the conflict with Israel (including 117 responsible for suicide bombings in Israel) received over $35 million. It is alleged that this money came from the UN Oil-for-Food Programme.
Independent Inquiry Committee
After initial opposition to an investigation, UN Secretary-General Kofi AnnanKofi Annan
Kofi Atta Annan is a Ghanaian diplomat who served as the seventh Secretary-General of the UN from 1 January 1997 to 31 December 2006...
stated on 19 March 2004 that a full independent investigation would be launched. In an official press interview, Annan said "[...] it is highly possible that there has been quite a lot of wrongdoing, but we need to investigate [...] and see who was responsible." "00:00:03". (audio clip, @5:56) However, Annan was emphatic that most of the claims were "outrageous and exaggerated", and that most of the criticisms had to do with things over which the programme had no authority.
The following individuals were chosen in April 2004 to head the United Nations' Independent Inquiry Committee
Paul Volcker Committee
The Paul Volcker Committee was formed to investigate alleged corruption and fraud in the United Nations Oil-for-Food Programme in Iraq....
http://www.iic-offp.org/index.html:
- Paul VolckerPaul VolckerPaul Adolph Volcker, Jr. is an American economist. He was the Chairman of the Federal Reserve under United States Presidents Jimmy Carter and Ronald Reagan from August 1979 to August 1987. He is widely credited with ending the high levels of inflation seen in the United States in the 1970s and...
, former U.S.United StatesThe United States of America is a federal constitutional republic comprising fifty states and a federal district...
Federal Reserve SystemFederal Reserve SystemThe Federal Reserve System is the central banking system of the United States. It was created on December 23, 1913 with the enactment of the Federal Reserve Act, largely in response to a series of financial panics, particularly a severe panic in 1907...
chairman and director of the United Nations Association of the United States of AmericaUnited Nations Association of the United States of AmericaThe United Nations Association of the United States of America or UNA-USA is a nonprofit membership organization dedicated to building understanding of and support for the ideals and work of the United Nations among the American people. Its education, policy and advocacy programs emphasize the...
; - Mark Pieth of SwitzerlandSwitzerlandSwitzerland name of one of the Swiss cantons. ; ; ; or ), in its full name the Swiss Confederation , is a federal republic consisting of 26 cantons, with Bern as the seat of the federal authorities. The country is situated in Western Europe,Or Central Europe depending on the definition....
, an expert on money-laundering in the Organisation for Economic Co-operation and DevelopmentOrganisation for Economic Co-operation and DevelopmentThe Organisation for Economic Co-operation and Development is an international economic organisation of 34 countries founded in 1961 to stimulate economic progress and world trade...
(OECD); and - Richard GoldstoneRichard GoldstoneRichard Joseph Goldstone is a South African former judge. After working for 17 years as a commercial lawyer, he was appointed by the South African government to serve on the Transvaal Supreme Court from 1980 to 1989 and the Appellate Division of the Supreme Court of South Africa from 1990 to 1994...
of South AfricaSouth AfricaThe Republic of South Africa is a country in southern Africa. Located at the southern tip of Africa, it is divided into nine provinces, with of coastline on the Atlantic and Indian oceans...
, former Prosecutor of the International Criminal Tribunal for the former YugoslaviaInternational Criminal Tribunal for the former YugoslaviaThe International Tribunal for the Prosecution of Persons Responsible for Serious Violations of International Humanitarian Law Committed in the Territory of the Former Yugoslavia since 1991, more commonly referred to as the International Criminal Tribunal for the former Yugoslavia or ICTY, is a...
(ICTY) and the International Criminal Tribunal for RwandaInternational Criminal Tribunal for RwandaThe International Criminal Tribunal for Rwanda is an international court established in November 1994 by the United Nations Security Council in Resolution 955 in order to judge people responsible for the Rwandan Genocide and other serious violations of international law in Rwanda, or by Rwandan...
(ICTR).
On April 22, 2004, the United Nations Security Council
United Nations Security Council
The United Nations Security Council is one of the principal organs of the United Nations and is charged with the maintenance of international peace and security. Its powers, outlined in the United Nations Charter, include the establishment of peacekeeping operations, the establishment of...
passed a unanimous resolution endorsing the Volcker inquiry into corruption
Political corruption
Political corruption is the use of legislated powers by government officials for illegitimate private gain. Misuse of government power for other purposes, such as repression of political opponents and general police brutality, is not considered political corruption. Neither are illegal acts by...
in the United Nations Oil-for-Food Programme for Iraq, calling upon all 191 member states to cooperate.
The definitive report was presented by Paul Volcker to the Security Council on 7 September 2005.
A leaked internal UN audit, which surfaced on mineweb.com, shows massive discrepancies between Cotecna reports and UN agency reports for the value of the shipments into northern Iraq. The audit found that Cotecna did no "value" inspections on nearly US$1 billion worth of aid shipments for the Inter-Agency Humanitarian Programme into northern Iraq. However, in a subsequent report published by the Independent Inquiry Committee (IIC) (October 27, 2005) it was concluded that “there were no major complaints by the United Nations or its member states about Cotecna’s performance” and that “the audit did not report any deficiencies in Cotecna’s inspections”. Benon Sevan
Benon Sevan
Benon Vahe Sevan was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food, medicine and other items to benefit the civilian population.Born into an Armenian-Cypriot...
was briefed in December 2002 on the findings of the audit.
The audit is available here. Its summary states:
- OIOS' overall conclusion is that the management of the Contract has not been adequate and certain provisions of the Contract had not been adhered to. In addition, the incorporation of additional costs, such as rehabilitation of camps in the man-day-rate was an unacceptable arrangement. Also, the contract had been amended prior to its commencement, which was inappropriate. OIP needs to strengthen its management of contracts and the Procurement Division (PD) should ensure that the basis of payment is appropriate in order to avoid additional costs to the Organization
After reading the leaked audit, congressman Henry Hyde
Henry Hyde
Henry John Hyde , an American politician, was a Republican member of the United States House of Representatives from 1975 to 2007, representing the 6th District of Illinois, an area of Chicago's northwestern suburbs which included O'Hare International Airport...
wrote to Kofi Annan wondering why "The U.S. Congress — which provides 22 percent of the U.N.'s budget and which has publicly requested copies of the 55 internal audits — should be required to depend on media leaks for source documents."
Interim report results
In a 219-page initial report, the Volcker Commission documented how OIF Chairman Benon SevanBenon Sevan
Benon Vahe Sevan was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food, medicine and other items to benefit the civilian population.Born into an Armenian-Cypriot...
used his position to solicit and receive allocations of oil from Iraq during the years he oversaw the humanitarian relief programme. Internal records from SOMO (Iraq's State Oil Marketing Organization), as well as interviews with former Iraqi officials involved in illicit oil deals, show that Sevan had requested and received allocations of 7.3 Moilbbl of oil on behalf of a Panama-registered trading company called African Middle East Petroleum Co.
Although the report makes no specific allegations of criminal activity by Sevan, Volcker does not rule out the possibility that charges might be filed by authorities in countries with relevant jurisdiction. The report called Sevan's conduct "ethically improper”, noting that Sevan had received large cash payments totalling $160,000 dollars each year he had headed the programme. Sevan claims the money came from an aunt in Cyprus who has since died, but the panel found no evidence to back this claim.
Volcker also reported in January that a review of 58 confidential UN internal OIF audits showed UN officials ignored early signs that humanitarian goods shipped to Iraq before the 2003 Invasion war were given little if any inspections by the Swiss company Cotecna. However, Volker concluded in the October 27, 2005 IIC report that “the audit did not report any deficiencies in Cotecna’s inspections”. Cotecna paid Kojo Annan
Kojo Annan
Kojo Annan is the only son of ex-UN Secretary-General Kofi Annan. A January 2005 article in The Sunday Times catapulted him to fame when it announced that he had confessed involvement in the UN Oil-for-Food Programme scandal; in a libel settlement eleven months later, the paper announced that it...
, Kofi Annan's son, consulting fees until November 2003. Volcker said that future reports would deal with questions regarding Kojo Annan.
Investigations by Iraqi Governing Council
International accounting firm KPMGKPMG
KPMG is one of the largest professional services networks in the world and one of the Big Four auditors, along with Deloitte, Ernst & Young and PwC. Its global headquarters is located in Amstelveen, Netherlands....
had been selected by the Iraqi Governing Council to investigate the al Mada claims, along with Freshfields Bruckhaus Deringer
Freshfields Bruckhaus Deringer
Freshfields Bruckhaus Deringer LLP is a global law firm headquartered in London, United Kingdom and a member of the 'Magic Circle' of leading English law firms. It is the second-largest law firm in the world measured by revenues. In 2010-11 it achieved total revenues of £1.14 billion and profits...
. It was due to release its findings to the Iraqi Governing Council
Iraqi Governing Council
The Iraqi Governing Council was the provisional government of Iraq from July 13, 2003 to June 1, 2004. It was established by and served under the United States-led Coalition Provisional Authority...
in May 2004. However, in June 2004, KPMG stopped working on the project because it was owed money by the IGC.
The US has been harshly critical of the KPMG probe led by associates of Ahmed Chalabi, accusing it of undermining the main probe established by Paul Bremer. That probe had been run by the head of Iraq's independent Board of Supreme Audit, Ehsan Karim, with assistance from Ernst & Young
Ernst & Young
Ernst & Young is one of the largest professional services networks in the world and one of the "Big Four" accountancy firms, along with Deloitte, KPMG and PricewaterhouseCoopers ....
. The Board of Supreme Audit is within the Iraqi Finance Ministry. In June 2004, Karim's investigation agreed to share information with the Volcker panel. However, on 1 July 2004, Karim was killed by a bomb magnetically attached to his car.
Claude Hankes-Drielsma, a British national and long-time friend of Ahmed Chalabi, was appointed by the IGC to coordinate its investigation of the Oil-for-Food Programme. Drielsma testified in front of the US Congress (on 21 April 2004) that the KPMG investigation "is expected to demonstrate the clear link between those countries which were quite ready to support Saddam Hussein's regime for their own financial benefit, at the expense of the Iraqi people, and those that opposed the strict application of sanctions and the overthrow of Saddam". He also testified that Chalabi was in charge of the investigation for the IGC.
In late May 2004, on the same day that Chalabi's offices at the Iraqi National Congress were raided by coalition forces, Drielsma claimed that an individual or individuals hacked into his computer and deleted every file associated with his investigation. He also claimed that "a back-up databank" was also deleted. When asked by Caludia Rosett if he had been physically threatened as well, Drielsma replied with "no comment". Drielsma has also been an outspoken critic of the UN's refusal to release any internal Oil-for-Food audit information to the IGC.
Russia
According to the paper The Beneficiaries of Saddam's Oil Vouchers: the List of 270, Russian beneficiaries included:- The Russian StateGovernment of RussiaThe Government of the Russian Federation exercises executive power in the Russian Federation. The members of the government are the prime minister , the deputy prime ministers, and the federal ministers...
- 1366000000 barrels (217,176,644,970 l) - ZarubezhneftZarubezhneftJSC Zarubezhneft is a Russian state-controlled oil company based in Moscow that specializes in exploration, development and operation of oil and gas fields outside Russian territory....
- 174500000 barrels (27,743,282,977.5 l) - The Liberal Democratic Party of RussiaLiberal Democratic Party of RussiaThe Liberal Democratic Party of Russia , Liberal'no-Demokraticheskaya Partiya Rossii is a political party in Russia. Since its founding in 1991, it has been led by the charismatic and controversial figure Vladimir Zhirinovsky...
(Vladimir ZhirinovskyVladimir ZhirinovskyVladimir Volfovich Zhirinovsky is a Russian politician, colonel of the Russian Army, founder and the leader of the Liberal Democratic Party of Russia , Vice-Chairman of the State Duma, and a member of the Parliamentary Assembly of the Council of Europe....
) - 79800000 barrels (12,687,186,141 l) - LukoilLUKoilLukoil/LUKoil ; ) is Russia's second largest oil company and its second largest producer of oil. In 2009, the company produced 97.615 million tons of oil; ....
company - 63000000 barrels (10,016,199,585 l) - RosneftRosneftRosneft is an integrated oil company majority owned by the Government of Russia. Rosneft is headquartered in Moscow’s Balchug district near the Kremlin, across the Moskva river...
- 35500000 barrels (5,644,048,972.5 l) - Vladimir PutinVladimir PutinVladimir Vladimirovich Putin served as the second President of the Russian Federation and is the current Prime Minister of Russia, as well as chairman of United Russia and Chairman of the Council of Ministers of the Union of Russia and Belarus. He became acting President on 31 December 1999, when...
's Peace and Unity Party (Saji Umalatova) - 34000000 barrels (5,405,568,030 l) - Yetumin (Russian foreign ministry - 30100000 barrels (4,785,517,579.5 l)
- GazpromGazpromOpen Joint Stock Company Gazprom is the largest extractor of natural gas in the world and the largest Russian company. Its headquarters are in Cheryomushki District, South-Western Administrative Okrug, Moscow...
- 26000000 barrels (4,133,669,670 l) - SoyuzneftegazSoyuzneftegazSoyuzneftegaz is a Russian oil and gas company. It is headed by Russia's former energy minister Yuri Shafranik. The main shareholder is the Central Bank of Russia.-History:...
(Shafrannik) - 25500000 barrels (4,054,176,022.5 l) - The Moscow Oil Company - 25100000 barrels (3,990,581,104.5 l)
- Onako - 22200000 barrels (3,529,517,949 l)
- Sidanco - 21200000 barrels (3,370,530,654 l)
- The Russian Association for Solidarity with Iraq - 12500000 barrels (1,987,341,187.5 l)
- The son of the former Russian Ambassador to Iraq - 19700000 barrels (3,132,049,711.5 l)
- Nikolai RyzhkovNikolai RyzhkovNikolai Ivanovich Ryzhkov was a Soviet official who became a Russian politician following the dissolution of the Soviet Union. He served as the last Chairman of the Council of Ministers or Premier of the Soviet Union from 1985 to 1991...
(Ex PM of the USSR) - 13000000 barrels (2,066,834,835 l) - RussneftRussneftRussneft is a Russian oil refining company and one of the largest producers of oil products in the country.The company operates two refineries in Orsk and Krasnodar, which have a combined capacity of , as well as 100 petrol stations...
(and) Gazexport - 12500000 barrels (1,987,341,187.5 l) - TransneftTransneftTransneft is a Russian state-owned business responsible for the national oil pipelines. It was founded in 1993 and owns the largest oil pipeline system in the world, with a total network length of almost...
- 9000000 barrels (1,430,885,655 l) - The Ural Invest company - 8500000 barrels (1,351,392,007.5 l)
- Sibneft - 8100000 barrels (1,287,797,089.5 l)
- Stroyneftegaz - 6000000 barrels (953,923,770 l)
- The Rus. Com. for Solidarity with the People of Iraq (Rudasev) - 6500000 barrels (1,033,417,417.5 l)
- The Russian Orthodox Church - 5000000 barrels (794,936,475 l)
- The Russian President's office director - 5000000 barrels (794,936,475 l)
- The Moscow Academy of Sciences - 3500000 barrels (556,455,532.5 l)
- The Chechnya Administration - 2000000 barrels (317,974,590 l)
- The National Democratic Party - 2000000 barrels (317,974,590 l)
- The Nordwest group - 2000000 barrels (317,974,590 l)
- YukosYUKOSOJSC "Yukos Oil Company" was a petroleum company in Russia which, until 2003, was controlled by Russian oligarch Mikhail Khodorkovsky and a number of other prominent Russian businessmen. After Yukos was bankrupted, Khodorkovsky was convicted and sent to prison.Yukos headquarters was located in...
- 2000000 barrels (317,974,590 l) - Russian MFA (Al-Fayko) (Russian foreign ministry) - 1000000 barrels (158,987,295 l)
- Mashinoimport - 1000000 barrels (158,987,295 l)
- Slavneft - 1000000 barrels (158,987,295 l)
- The Caspian Invest Company (Kalika) - 1000000 barrels (158,987,295 l)
- The Russian Communist Party - 1000000 barrels (158,987,295 l)
- TatneftTatneftTatneft is a Russian vertically-integrated oil and gas company with headquarters in the city of Almetyevsk, in the Republic of Tatarstan. It is the sixth largest oil company in Russia.The company general director is Rinat Galeyev...
- 1000000 barrels (158,987,295 l) - Surgutneft - 1000000 barrels (158,987,295 l)
- Siberia's oil and gas company - 1000000 barrels (158,987,295 l)
Other
Other beneficiaries:Austria:
- The Arab-Austrian Society (chaired by Fritz Edlinger) - 1000000 barrels (158,987,295 l).
Belarus:
- Liberal Party - 1000000 barrels (158,987,295 l)
- The Communist Party of BelarusCommunist Party of BelarusThe Communist Party of Belarus is a political party in Belarus, that supports the government of president Alexander Lukashenko. It was created in 1996. The leader of the party is Tatsyana Holubeva....
- 1000000 barrels (158,987,295 l)
Brazil:
- The 8th of October Movement, a Brazilian Communist group - 4500000 barrels (715,442,827.5 l)
Canada:
- Arthur Millholland, president and CEO of the OilexcoOilexcoOilexco Incorporated was an oil and gas exploration and production company. The company's producing properties and exploration activities were located in the United Kingdom Central North Sea, specifically in the Outer Moray Firth and Central Graben areas...
company
Yugoslav:
- The Yugoslav LeftYugoslav LeftYugoslav Left was a left-wing political party in Serbia and Montenegro. It was formed in 1994 as is a coalition of 23 left-wing and communist parties, led by the League of Communists - Movement for Yugoslavia . It has been led by Mirjana Marković, the wife of Slobodan Milošević...
party - 9500000 barrels (1,510,379,302.5 l) - The Socialist PartySocialist Party of SerbiaThe Socialist Party of Serbia is officially a democratic socialist political party in Serbia. It is also widely recognized as a de facto Serbian nationalist party, though the party itself does not officially acknowledge this...
- 1000000 barrels (158,987,295 l) - The Italian Party - 1000000 barrels (158,987,295 l)
- "kokstuntsha" - possibly KostunicaVojislav KoštunicaVojislav Koštunica is a Serbian politician, statesman and the president of the Democratic Party of Serbia. He was the last President of the Federal Republic of Yugoslavia, succeeding Slobodan Milošević and serving from 2000 to 2003...
's party - 1000000 barrels (158,987,295 l)
Other parties:
- The Romanian Labor Party - 5500000 barrels (874,430,122.5 l)
- The Party of the Hungarian Interest - 4700000 barrels (747,240,286.5 l)
- The Bulgarian Socialist PartyBulgarian Socialist PartyThe Bulgarian Socialist Party is social-democratic political party in Bulgaria and successor to the Bulgarian Communist Party. The BSP is a member of the Party of European Socialists and Socialist International, and is currently led by Sergei Stanishev....
- 12000000 barrels (1,907,847,540 l) - The Communist Party of SlovakiaCommunist Party of SlovakiaThe Communist Party of Slovakia is a communist party in Slovakia, formed in 1992, through the merger of the Communist Party of Slovakia – 91 and the Communist League of Slovakia.According to Luboš Blaha the KSS supported the government of Robert Fico....
- 1000000 barrels (158,987,295 l)
France:
- The French-Arab Friendship Association - 15100000 barrels (2,400,708,154.5 l)
- Former French Interior Minister Charles PasquaCharles PasquaCharles Pasqua is a French businessman and Gaullist politician. He was Interior Minister from 1986 to 1988, under Jacques Chirac's cohabitation government, and also from 1993 to 1995, under the government of Edouard Balladur...
- 12000000 barrels (1,907,847,540 l) - Patrick Maugein, the TrafiguraTrafiguraTrafigura is an Amsterdam-based multinational company founded in 1993 trading in base metals and energy, including oil. the company had equity of more than $2 billion and a turnover of $73 billion that generated $440 million of profit....
company - 25000000 barrels (3,974,682,375 l) - Michel Grimard, "founder of the French-Iraqi Export Club" - 17100000 barrels (2,718,682,744.5 l).
Egypt:
- Khaled Gamal Abd Al-Nasser, "son of the late Egyptian president" - 16600000 barrels (2,639,189,097 l)
- Imad Al-Galda, "a businessman and a member of the Egyptian parliament from President Mubarak's National Democratic Party" - 14000000 barrels (2,225,822,130 l)
- Abd Al-Azim Mannaf, "editor of the Sout Al-Arab newspaper" - 6000000 barrels (953,923,770 l)
- Muhammad Hilmi, "editor of the Egyptian paper Sahwat Misr" - an undisclosed number of barrels.
- The United Arab Company - 6000000 barrels (953,923,770 l)
- The Nile and Euphrates Company - 3000000 barrels (476,961,885 l)
- The Al-Multaqa Foundation for Press and Publication - 1000000 barrels (158,987,295 l).
Libya:
- Prime Minister Shukri Ghanem - 1000000 barrels (158,987,295 l)
India:
- The Indian National CongressIndian National CongressThe Indian National Congress is one of the two major political parties in India, the other being the Bharatiya Janata Party. It is the largest and one of the oldest democratic political parties in the world. The party's modern liberal platform is largely considered center-left in the Indian...
- 1000000 barrels (158,987,295 l)
Indonesia:
- Indonesian President Megawati SukarnoputriMegawati SukarnoputriIn this Indonesian name, the name "Sukarnoputri" is a patronymic, not a family name, and the person should be referred to by the given name "Megawati"....
- 1000000 barrels (158,987,295 l)
Italy:
- The Italian Petrol Union - 1000000 barrels (158,987,295 l)
- West Petrol, an Italian company that trades crude oil and oil products - 1000000 barrels (158,987,295 l)
- Roberto FormigoniRoberto FormigoniRoberto Formigoni is an Italian politician, and the current President of Lombardy Region, Italy.-Life and career:Graduated in Philosophy at the Catholic University of Milan, he studied political economy at the Sorbonne, in Paris....
, possibly the president of Lombardia - 1000000 barrels (158,987,295 l) - Salvatore Nicotra, an oil merchant - 1000000 barrels (158,987,295 l)
Myanmar:
- Myanmar's Forestry Minister - 1000000 barrels (158,987,295 l)
Palestine:
- The Palestinian Liberation Organization (PLO) - 4000000 barrels (635,949,180 l)
- The PLO Political Bureau - 5000000 barrels (794,936,475 l)
- Abu Al-Abbas - 11500000 barrels (1,828,353,892.5 l)
- Abdallah Al-Horani - 8000000 barrels (1,271,898,360 l)
- The PFLP - 5000000 barrels (794,936,475 l)
- Wafa Tawfiq Al-Sayegh - 4000000 barrels (635,949,180 l)
Qatar:
- Qatari Horseracing Association Chairman Hamad bin Ali Aal Thani - 14000000 barrels (2,225,822,130 l)
- Gulf Petroleum - 2000000 barrels (317,974,590 l)
Spain:
- Basem Qaqish, "a member of the Spanish Committee for the Defense of the Arab Cause" - 1000000 barrels (158,987,295 l)
- Ali Ballout, "a pro-Saddam Lebanese journalist" - 1000000 barrels (158,987,295 l)
- Javier Robert - 1000000 barrels (158,987,295 l)
Syria:
- Farras Mustafa Tlass, "the son of Syrian Defense Minister Mustafa Tlass" - 6000000 barrels (953,923,770 l)
- Audh Amourah - 18000000 barrels (2,861,771,310 l)
- Ghassan Zakariya - 6000000 barrels (953,923,770 l)
- Anwar Al-Aqqad - 2000000 barrels (317,974,590 l)
- Hamida Na'Na', the owner of the Al WefaqAl WefaqAl Wefaq National Islamic Society , also known as the Islamic National Accord Association, is a Bahraini political society, and the largest party in the Bahrain, both in terms of its membership and its results at the polls...
Al-Arabi periodical - 1000000 barrels (158,987,295 l).
Switzerland:
- GlencoreGlencoreGlencore International plc is a multinational mining and commodities trading company headquartered in Baar, Switzerland and with its registered office in Saint Helier, Jersey...
, the largest commodity trader in Switzerland - 12000000 barrels (1,907,847,540 l) - Taurus Petroleum - 1000000 barrels (158,987,295 l)
- Petrogas, which is "listed under three sub-companies – Petrogas Services, Petrogas Distribution, and Petrogas Resources - and is associated with the Russian company RosneftRosneftRosneft is an integrated oil company majority owned by the Government of Russia. Rosneft is headquartered in Moscow’s Balchug district near the Kremlin, across the Moskva river...
egazetroy" - 1000000 barrels (158,987,295 l) - Alcon, "listed in Lichtenstein and associated with larger oil companies" - 1000000 barrels (158,987,295 l)
- Finar Holdings, which is "listed in Lugano, Switzerland, and is under liquidation" - received 1000000 barrels (158,987,295 l)
Ukraine:
- The Social Democratic Party - 1000000 barrels (158,987,295 l).
- The Communist PartyCommunist Party of UkraineThe Communist Party of Ukraine is a political party in Ukraine, currently led by Petro Symonenko.The party fights the Ukrainian national self-determination by identifying any Ukrainian national parties as the National-Fascist ones The Communist Party of Ukraine is a political party in Ukraine,...
- 6000000 barrels (953,923,770 l). - The Socialist PartySocialist Party of UkraineThe Socialist Party of Ukraine is a Socialist political party in Ukraine and part of the Verkhovna Rada from 1994 to 2007.It is one of the oldest parties and was created by the former members of the Communist Party of Ukraine in late 1991 when the Communist Party was banned...
- 1000000 barrels (158,987,295 l). - The FTD oil company - 1000000 barrels (158,987,295 l), as did other Ukrainian companies.
United Kingdom:
- George GallowayGeorge GallowayGeorge Galloway is a British politician, author, journalist and broadcaster who was a Member of Parliament from 1987 to 2010. He was formerly an MP for the Labour Party, first for Glasgow Hillhead and later for Glasgow Kelvin, before his expulsion from the party in October 2003, the same year...
- 1000000 barrels (158,987,295 l) - Fawwaz Zreiqat - 1000000 barrels (158,987,295 l). Zreiqat also appears in the Jordanian section as having received 6000000 barrels (953,923,770 l)
- The Mujahideen Khalq - 1000000 barrels (158,987,295 l)
United States:
- Samir VincentSamir VincentSamir Vincent also known as Samir Ambrose Vincent is an Iraqi American that pleaded guilty in January 2005 to being an illegal agent for Saddam Hussein's government and helping to skim money from the Oil-for-Food Programme which earned him millions of dollars in the process.-Oil-for-Food Programme...
, "organized a delegation of Iraqi religious leaders to visit the U.S. and meet with former president Jimmy Carter" - 10500000 barrels (1,669,366,597.5 l) - Shaker Al-Khafaji, "the pro-Saddam chairman of the 17th conference of Iraqi expatriates" - 1000000 barrels (158,987,295 l).
Other beneficiaries were companies and individuals from the Sudan, Yemen, Cyprus, Turkey, Vietnam, Bangladesh, Malaysia, Pakistan, Romania, the UAE, Morocco, Algeria, Tunisia, Panama, Thailand, Chad, China, Nigeria, Kenya, Ireland, Bahrain, and the Philippines as well as two Saudi Arabian companies.
Criminal investigation in France
The French criminal justice system is investigating alleged involvement of two former officials from the French Ministry of Foreign AffairsMinister of Foreign Affairs (France)
Ministry of Foreign and European Affairs ), is France's foreign affairs ministry, with the headquarters located on the Quai d'Orsay in Paris close to the National Assembly of France. The Minister of Foreign and European Affairs in the government of France is the cabinet minister responsible for...
, Jean-Bernard Mérimée and Serge Boidevaix. The two are accused of having used their extensive network of connections in the Arab world in order to commit "influence peddling" and "corruption of foreign public agents". They have been put under formal criminal investigation by investigating magistrate Philippe Courroye, a famous specialist in cases of corruption and other financial dealings. Both men had retired at the time of the alleged crimes and acted in their personal capacity, not as official envoys of the French government; however, Boidevaix claims that he kept the Ministry of Foreign Affairs informed of his actions in Iraq. The Ministry claims to have warned both men formally in 2001 (during the administration of Lionel Jospin
Lionel Jospin
Lionel Jospin is a French politician, who served as Prime Minister of France from 1997 to 2002.Jospin was the Socialist Party candidate for President of France in the elections of 1995 and 2002. He was narrowly defeated in the final runoff election by Jacques Chirac in 1995...
).
Some other people, including Bernard Guillet, an aide to French senator Charles Pasqua
Charles Pasqua
Charles Pasqua is a French businessman and Gaullist politician. He was Interior Minister from 1986 to 1988, under Jacques Chirac's cohabitation government, and also from 1993 to 1995, under the government of Edouard Balladur...
, are also under formal investigation. Guillet and Pasqua deny any wrongdoing.
US Senate investigations
US SenatorUnited States Senate
The United States Senate is the upper house of the bicameral legislature of the United States, and together with the United States House of Representatives comprises the United States Congress. The composition and powers of the Senate are established in Article One of the U.S. Constitution. Each...
Norm Coleman
Norm Coleman
Norman Bertram Coleman, Jr. is an American attorney and politician. He was a United States senator from Minnesota from 2003 to 2009. Coleman was elected in 2002 and served in the 108th, 109th, and 110th Congresses. Before becoming a senator, he was mayor of Saint Paul, Minnesota, from 1994 to 2002...
called for Kofi Annan
Kofi Annan
Kofi Atta Annan is a Ghanaian diplomat who served as the seventh Secretary-General of the UN from 1 January 1997 to 31 December 2006...
to resign over the scandal and held a number of hearings on the matter. The most spectacular of these hearings occurred after the subcommittee released a report that accused British
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
Member of Parliament
Member of Parliament
A Member of Parliament is a representative of the voters to a :parliament. In many countries with bicameral parliaments, the term applies specifically to members of the lower house, as upper houses often have a different title, such as senate, and thus also have different titles for its members,...
(MP) George Galloway
George Galloway
George Galloway is a British politician, author, journalist and broadcaster who was a Member of Parliament from 1987 to 2010. He was formerly an MP for the Labour Party, first for Glasgow Hillhead and later for Glasgow Kelvin, before his expulsion from the party in October 2003, the same year...
, Russia
Russia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
n politician Vladimir Zhirinovsky
Vladimir Zhirinovsky
Vladimir Volfovich Zhirinovsky is a Russian politician, colonel of the Russian Army, founder and the leader of the Liberal Democratic Party of Russia , Vice-Chairman of the State Duma, and a member of the Parliamentary Assembly of the Council of Europe....
, and former French
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
Interior Minister Charles Pasqua
Charles Pasqua
Charles Pasqua is a French businessman and Gaullist politician. He was Interior Minister from 1986 to 1988, under Jacques Chirac's cohabitation government, and also from 1993 to 1995, under the government of Edouard Balladur...
of receiving oil allocations from Iraq in return for being political allies of Saddam Hussein
Saddam Hussein
Saddam Hussein Abd al-Majid al-Tikriti was the fifth President of Iraq, serving in this capacity from 16 July 1979 until 9 April 2003...
's regime. Galloway, in an unusual appearance of a British MP before a US Senate subcommittee, responded angrily to the allegations against him in a confrontational public hearing which drew much media attention in both America and Britain http://news.bbc.co.uk/1/hi/uk_politics/4557369.stm. Galloway denied the allegations.
It is estimated that as much as $10 billion to $21.3 billion went unaccounted for and/or was directed to Saddam Hussein and his government in the form of kickbacks and oil smuggling. Record keeping of illegal behaviour is hard to come by and rare at best. To date, only 1 of 54 internal UN audits of the Oil-for-Food Programme have been made public. The UN has refused all requests for its audits.
In the US, the shortage of the strategic oil reserves became so apparent that many of the shipments to the US were "grossly short" to Southern California storage facilities. Several Senior Military Officer sought to hide the fact. However, very few US military officers filed insurance claims against the British insurance policies to try to recoup the cost of the "Shortage" in which several fraud stock scheme arose in late 1990 to present (MCI, FTL, ENRON and etc...).
Staff from the Senate investigations committee presented documentary evidence that the Bush administration was made aware of illegal oil sales and kickbacks paid to the Saddam Hussein regime but could do nothing to stop them. The Senate report concludes the United States ended up with a majority of the oil lifted from Iraq after vendors paid illicit surcharges of 10 cents to 30 cents a barrel to Saddam, though U.S. firms directly purchased a unknown percentage of the crude from the huge US Surplus food from the US Department of Agriculture. At the time, the US was providing shipments of wheat and corn to both France and Russia. However, the two countries to profit most from the programme were allegedly France and Russia. These two countries supported of efforts to lift the UN-imposed sanctions against Iraq and were also against the 2003 US-led invasion of Iraq.
Warren Hoge
Warren Hoge
Warren McClamroch Hoge is an American journalist, much of whose long career has been at The New York Times. From 2004 until mid-2008, he served as the Times 's foreign correspondent at the United Nations bureau...
alleged that the American government was aware of the scandal and chose to not prevent the smuggling because their allies Turkey and Jordan benefited from the majority of the smuggled oil. US Senator Carl Levin
Carl Levin
Carl Milton Levin is a Jewish-American United States Senator from Michigan, serving since 1979. He is the Chairman of the Senate Committee on Armed Services. He is a member of the Democratic Party....
(D-Michigan
Michigan
Michigan is a U.S. state located in the Great Lakes Region of the United States of America. The name Michigan is the French form of the Ojibwa word mishigamaa, meaning "large water" or "large lake"....
) is quoted in an interview for the New York Times as saying, "There is no question that the bulk of the illicit oil revenues came from the open sale of Iraqi oil to Jordan and to Turkey, and that that was a way of going around the Oil-for-Food Programme [and that] we were fully aware of the bypass and looked the other way."
Indictments
On January 6, 2006, South KoreaSouth Korea
The Republic of Korea , , is a sovereign state in East Asia, located on the southern portion of the Korean Peninsula. It is neighbored by the People's Republic of China to the west, Japan to the east, North Korea to the north, and the East China Sea and Republic of China to the south...
n businessman Tongsun Park was arrested by the FBI in Houston after he was indicted for illegally accepting millions of dollars from Iraq in the UN Oil-for-Food Programme. The criminal charges against him were unsealed in a U.S. District Court in Manhattan.
On January 16, 2007, Benon Sevan
Benon Sevan
Benon Vahe Sevan was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food, medicine and other items to benefit the civilian population.Born into an Armenian-Cypriot...
was indicted by a Manhattan federal prosecutor for taking about $160,000 in bribes. Michael J. Garcia, the U.S. attorney from the Southern District of New York, issued a warrant through Interpol
Interpol
Interpol, whose full name is the International Criminal Police Organization – INTERPOL, is an organization facilitating international police cooperation...
for the arrest of Sevan at his home in Cyprus, as well as a warrant for Efraim "Fred" Nadler, a New York businessman who was indicted on charges of channelling the illegal payments to Sevan. Nadler's whereabouts are unknown.
Recent Lawsuit
Represented by Mark Maney and Roliff Purrington from the law firm of Burford & Maney P.C., in June 2008, the Republic of Iraq sued almost 100 international companies for their roles in corrupting the Programme. In 2009, the law firm of Bernstein Liebhard came on as co-plaintiffs’ counsel.Daimler AG Kickbacks Case
On April 1, 2010, Daimler AG plead guilty to bribery charges brought by the US Justice Department and the U.S. Securities and Exchange Commission and will pay $185 million (US) as settlement, but remains subject to a two-year deferred prosecution agreement and oversight by an independent monitor. The German automaker of Mercedes-BenzMercedes-Benz
Mercedes-Benz is a German manufacturer of automobiles, buses, coaches, and trucks. Mercedes-Benz is a division of its parent company, Daimler AG...
vehicles was accused of violating the terms of the United Nations' Oil for Food Program with Iraq by including kickback
Bribery
Bribery, a form of corruption, is an act implying money or gift giving that alters the behavior of the recipient. Bribery constitutes a crime and is defined by Black's Law Dictionary as the offering, giving, receiving, or soliciting of any item of value to influence the actions of an official or...
s 10 percent of the contract values to the Iraqi government. The SEC said the company earned more than $4 million from the sale of vehicles and spare parts.
The SEC case was sparked in 2004 after David Bazzetta, a former auditor at then DaimlerChrysler Corp, filed a whistle-blower complaint after he was fired for raising questions about bank account
Bank account
A Bank account is a financial account recording the financial transactions between the customer and the bank and the resulting financial position of the customer with the bank .-Account types:...
s controlled by Mercedes-Benz units in South America. Bazzetta alleged that he learned in a July 2001 corporate audit executive committee
Executive Committee
Executive Committee may refer to:* The Executive Committee of the Privy Council of Northern Ireland, a government body in the United Kingdom 1921–1972* The Northern Ireland Executive, a government body in the United Kingdom...
meeting in Stuttgart
Stuttgart
Stuttgart is the capital of the state of Baden-Württemberg in southern Germany. The sixth-largest city in Germany, Stuttgart has a population of 600,038 while the metropolitan area has a population of 5.3 million ....
that business units "continued to maintain secret bank accounts to bribe foreign government officials," though the company knew the practice violated U.S. laws.
The investigation for the case also revealed that Daimler made some $56 million in bribes related to more than 200 transactions in 22 countries that earned the company $1.9 billion in revenue and at least $91.4 million in illegal profits. "Using offshore bank accounts, third-party agents and deceptive pricing practices, these companies [Daimler AG and its subsidiaries] saw foreign bribery as a way of doing business," said Mythili Raman, a principal deputy in the Justice Department’s criminal division.
"It is no exaggeration to describe corruption and bribe-paying at Daimler as a standard business practice," Robert Khuzami
Robert Khuzami
Robert S. Khuzami is currently the director of the Division of Enforcement of the U.S. Securities and Exchange Commission. He is a former United States federal prosecutor and general counsel of Deutsche Bank AG....
, director of the SEC's enforcement division, said in a statement.
Judge Richard J. Leon of United States District Court in Washington, approved the plea agreement and settlement, calling it a "just resolution."
See also
- Iraq sanctionsIraq sanctionsThe Iraq sanctions were a near-total financial and trade embargo imposed by the United Nations Security Council on the nation of Iraq. They began August 6, 1990, four days after Iraq's invasion of Kuwait, stayed largely in force until May 2003 , and certain portions including reparations to Kuwait...
- Economy of IraqEconomy of IraqIraq's economy is dominated by the petroleum sector, which has traditionally provided about 95% of foreign exchange earnings. In the 1980s, financial problems caused by massive expenditures in the eight-year war with Iran and damage to oil export facilities by Iran led the government to implement...
- Management of Iraq Reconstruction Programme
- Oil-for-Food Program HearingsOil-for-Food Program HearingsThe Oil-for-Food Program Hearings were held by the U.S Senate Permanent Subcommittee on Investigations beginning in 2004 ostensibly in order to investigate abuses of the United Nations Oil-for-Food Programme in which the economically sanctioned country of Iraq was intended to be able to sell...
Sites
- http://iic-offp.org – Independent Inquiry into the United Nations Oil-for-Food Programme
- Resolution 986 authorizing the Oil-for-Food Programme
- UN Office of the Iraq Programme Oil-for-Food
- Oil-for-Food Facts - website of the UN Foundation an independent UN political booster organization
- SourceWatchSourceWatchSourceWatch is an internet wiki site that is a collaborative project of the liberal Center for Media and Democracy...
on Oil-for-Food Programme - http://www.burfordmaney.com/ourcases/republicofiraqvabbl.html
Articles
2007- europaticker: oils for Food - scandal in the Iraq: Transparency Germany inserts complaint against 57 German enterprises
- Tel Chai Nation: Oil-for-Food scandal: the Houston-based defendants
2005
- Putting Oil-for-Food in Perspective, JURISTJURISTJURIST is an online legal news service hosted by the University of Pittsburgh School of Law, powered by a staff of more than 40 law students working in Pittsburgh and other US locations under the direction of founding Publisher & Editor-in-Chief Professor Bernard Hibbitts, Research Director Jaclyn...
, November 2, 2005 - Oil for food: A shared failure – Still a long way to go, transparency.org, October 27, 2005
- "U.N.: 2,200 Companies Gave Iraq Illicit Funds", Nick Wadhams & Edith Lederer, Associated PressAssociated PressThe Associated Press is an American news agency. The AP is a cooperative owned by its contributing newspapers, radio and television stations in the United States, which both contribute stories to the AP and use material written by its staff journalists...
, YahooYahoo!Yahoo! Inc. is an American multinational internet corporation headquartered in Sunnyvale, California, United States. The company is perhaps best known for its web portal, search engine , Yahoo! Directory, Yahoo! Mail, Yahoo! News, Yahoo! Groups, Yahoo! Answers, advertising, online mapping ,...
News, October 27, 2005 - Financial TimesFinancial TimesThe Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
, 13 January 2005, "US ignored warning on Iraqi oil smuggling" - CNN.com, Documents: U.S. condoned Iraq oil smuggling, 2 February 2005
- BBC, 15 April 2005, Row deepens over UN oil scandal
- The GuardianThe GuardianThe Guardian, formerly known as The Manchester Guardian , is a British national daily newspaper in the Berliner format...
, 17 May 2005, US 'backed illegal Iraqi oil deals' - AlterNet, 4 October 2005, "Kofi and the Scandal Pimps"
- Le MondeLe MondeLe Monde is a French daily evening newspaper owned by La Vie-Le Monde Group and edited in Paris. It is one of two French newspapers of record, and has generally been well respected since its first edition under founder Hubert Beuve-Méry on 19 December 1944...
, October 13, 2005, M. Boidevaix aurait été "en contact constant avec le quai d'Orsay"
2004
- The U.N. Oil for Food scandal - Washington Times, March 2004
- BBC, 19 March 2004, Galloway accepts libel damages
- Jean-David LevitteJean-David LevitteJean-David Levitte is a French diplomat, formerly the French ambassador to the United States, and currently diplomatic advisor and sherpa to President Nicolas Sarkozy. He has also been named head of the future National Security Council....
, Los Angeles TimesLos Angeles TimesThe Los Angeles Times is a daily newspaper published in Los Angeles, California, since 1881. It was the second-largest metropolitan newspaper in circulation in the United States in 2008 and the fourth most widely distributed newspaper in the country....
, 7 April 2004, First 'Freedom Fries,' Now Oil-for-Food Lies; Op ed of French ambassador to the US - Claudia Rosett, Commentary, May 2004, "What Did Kofi Annan Know, and When Did He Know It?"
- Hankes-Drielsma connections to Chalabi, May 2004
- The U.N. Is Us: Exposing Saddam Hussein's Silent Partner U.S. Complicity In The Oil Smuggling Harper's MagazineHarper's MagazineHarper's Magazine is a monthly magazine of literature, politics, culture, finance, and the arts, with a generally left-wing perspective. It is the second-oldest continuously published monthly magazine in the U.S. . The current editor is Ellen Rosenbush, who replaced Roger Hodge in January 2010...
December 2004