May 19, 2005
by Claudia Rosett
When Senator Norm Coleman (R., Minn.) last year compared the United Nations Oil-for-Food scandal to "an onion," he had just one thing wrong: The more you peel, the bigger it gets.
The latest insights into this cosmos of U.N.-fostered corruption come by way of a bipartisan report just released by the Senate Permanent Subcomittee on Investigations, or PSI, led by Coleman. In detail, with supporting documentation, the report shows how Saddam Hussein, via Oil-for-Food, gave rights to buy millions of barrels of underpriced Iraqi oil to two politicians who supported his regime: former French Interior Minister Charles Pasqua and British Member of Parliament George Galloway.
In a press release, Coleman notes: "This report exposes how Saddam turned the Oil for Food program on its head and used the program to reward his political allies like Pasqua and Galloway."
That's news, because both Pasqua and Galloway have denied allegations that they received any such riches from Saddam's regime. Galloway last year won a libel suit in the U.K., against the British Daily Telegraph, over similar allegations - which were based on documentation different from that produced by Senate investigators.
The importance of this Senate report goes well beyond those two names, however. Using documents from Saddam's own records, supplemented by interviews with officials of the former Saddam regime, Senate investigators are uncovering detailed new evidence that Oil-for-Food served as a vehicle for Saddam to thwart sanctions, fund terrorists, and buy political influence within the U.N.'s own Security Council.
Citing interviews with Saddam's former deputy prime minister Tariq Aziz, former vice president Taha Yassin Ramadan, and an unnamed former senior Iraqi official, the Senate report says that Iraq's Baathist regime, in doling out rights to buy cheap oil through the U.N. program, "gave priority to foreign officials, journalists and even terrorist entities." Ramadan, Saddam's former vice president, told Senate investigators that such oil allocations were "compensation for support." According to the report, the list of terrorists named by these Iraqi officials as engaging in this quid pro quo includes "the Popular Front for the Liberation of Palestine, Abu Abbas, and the Mujahedeen-e Khalq."
Another of the report's findings is especially interesting in light not only of Saddam's subversion of Oil-for-Food to bust sanctions, but also as context for the hot debate within the U.N. Security Council just prior to the U.S.-led military overthrow of Saddam in 2003. The report explains that the prime targets of Saddam's scheme to buy influence were "individuals and entities from countries on the U.N. Security Council." Both documents and interviews with former senior officials of Saddam's regime confirm that "The regime steered a massive portion of its allocations toward Security Council members that were believed by the Hussein regime to support Iraq in its efforts to lift sanctions - namely, Russia, France, and China."
It turns out that not only did several of Saddam's oil-ministry charts expressly separate oil-allocation recipients by country; these charts further spelled out whether the country was a member of the Security Council.
The Coleman PSI report also serves as an intriguing pointer to a roster of some 270 names published in a Baghdad newspaper, Al-Mada, in January, 2004 -- the so-called "Al-Mada list" of politicians, businesses, and other entities alleged to have received lucrative oil allocations in suspect deals with Saddam. When the list came out, it was viewed with interest, but skepticism. Absent supporting documentation, it was hard to know how much of it might credible. The names ranged from that of a former French ambassador to the U.N., to the former president of Indonesia, to a Bangladeshi Islamic fundamentalist, to the Russian Orthodox Church.
It is possible that some of the figures named are innocent. But so far, investigations into specific entries on the Al-Mada list have been hitting a significant amount of paydirt. Pasqua and Galloway are on it. So are all three of the terrorist groups named in the new PSI report. So is a Jordanian, Fawaz Zureqat, named in the PSI report as one of the go-betweens "who facilitated several oil transactions for Galloway."
Also on the list are a number of other figures now embroiled, with substantial supporting evidence, in the Oil-for-Food scandal. These include U.S. businessman Samir Vincent, who recently copped a plea with federal prosecutors now investigating cases involving bribery and wire fraud related to Oil-for-Food. The recent subject of a Financial Times expose is on it, Italian politician Roberto Formigoni. So is another American businessman, Shakir al-Khafaji, reported by the Wall Street Journal to have received funds from Saddam and helped bankroll the lobbying activities of former weapons-inspector turned anti-sanctions activist, Scott Ritter. So, for that matter, is the former head of the Oil-for-Food program, Benon Sevan -- found by Paul Volcker's U.N.-authorized investigation to have engaged in a severe conflict of interest involving Saddam's oil allocations under the program.
Another name from the Al-Mada list, about to surface in Washington, is that of Russian nationalist politician Vladimir Zhirinovsky. His alleged dealings with Saddam under Oil-for-Food will be among the subjects covered in a hearing Monday by the House Energy and Commerce Committee, led by Rep. Joe Barton. Also discussed at that hearing will be a raft of senior French officials apparently named in records of Saddam's regime as potential targets of influence.
It also looks likely we will be hearing more about the neon names of the hour: Pasqua and Galloway. Pasqua could not be reached for comment. One of his aides, Bernard Guillet, also named as having received oil allocations from Saddam, is currently under investigation in France. Galloway, in a statement issued Wednesday, again denied ever trading in or seeing a barrel of oil (apart from one a British newspaper deposited in his garden). Galloway went on to call Coleman's team "a lickspittle Republican committee," (in fact, both the committee and its report are bipartisan) and said he had received no response to repeated requests to appear before the committee and rebut their evidence.
This has produced in the past 24 hours a spirited exchange, in which Coleman issued a statement that "at no time" did Galloway contact his committee "by any means, including but not limited to telephone, fax, email, letter, Morse Code or carrier pigeon." Coleman went on to invite Galloway to testify at a PSI hearing next Tuesday that will enlarge upon this week's report, under the title "Oil for Influence: How Saddam Used Oil to Reward Politicians and Terrorist Entities Under the United Nations Oil-for-Food Program." Coleman promised that "There will be a witness chair and microphone available for Mr. Galloway's use." Galloway replied by telling the Financial Times that "assuming we get the visas," he'll be there "to give them both barrels -- verbal guns, of course, not oil."
As evidence continues to bubble out of the great sinkhole that was once Oil-for-Food, there will no doubt be more scandal to come. It may be worth taking a moment to reflect on just how far the U.N. strayed in this program from its widely advertised humanitarian brief. The program, which ran from 1996-2003, was supposed to allow U.N.-sanctioned Saddam to export Iraq's oil solely to buy humanitarian aid, such as milk and medicine, for the people of Iraq. The idea was that the U.N. would oversee the process, with the Secretariat collecting 2.2 percent of Saddam's oil revenues to defray its costs for ensuring the integrity of the program. (That U.N. commission totaled $1.4 billion, from which U.N. Secretary-General Kofi Annan last year plucked $30 million in residual funds to cover the U.N.-authorized independent inquiry led by former Fed Chairman Paul Volcker, who has yet to provide the kind of insight offered in this Senate report).
The U.N. let Saddam pick his own business partners, and kept the deals secret, and at Annan's behest greatly expanded the program. That opened the way to Saddam for such scams as underpricing oil and allocating shipments as rewards to favored business partners, who could then make fat profits by reselling these allocations on the world market. The Senate report quotes a former Iraqi official saying that inside Saddam's oil-marketing agency, this arrangement was known as the "Saddam Bribery System."
The flip side, for the aid contracts, was that Saddam would overpay, effectively skimming money out of the humanitarian funds and transferring it to favored aid contractors. As the program became an entrenched feature at the U.N., routinely renewed about every six months at the urging of Secretary-General Kofi Annan to the Security Council, Saddam began demanding kickbacks on these deals. That added a layer of graft which allowed him to amass not only favors owed, but money salted away in secret accounts for his own uses.
The cynicism of this setup is neatly captured in the evidence laid out in the report that not only did Galloway, the British MP, receive oil allocations from Saddam, but that "to conceal payments associated with at least one such allocation" he used a charity, the Mariam Appeal, set up in the name of helping a four-year-old Iraqi girl suffering from leukemia.
Somewhere in all this, the U.N.-authorized Volcker inquiry is engaged right now in a legal showdown, demanding that House investigators give back boxfuls of evidence that Rep. Hyde's Committee on International Relations subpoenaed recently from an investigator who resigned last month from Volcker's team, claiming Volcker's most recent report had been too soft on U.N. Secretary-General Kofi Annan. Sen. Coleman and Rep. Chris Shays, who heads yet another congressional panel investigating Oil-for-Food, have also issued subpoenas for this evidence. A restraining order, obtained by Volcker's committee, expires next week. There is room to wonder who is most likely to enlighten us as to the true depths of Oil-for-Food's dirty secrets: Congress, now pouring forth information to the public; or Volcker, already sitting on millions of still-secret U.N. documents, who wants his stray boxes of evidence back.
This article appeared on National Review Online on May 12, 2005.
Claudia Rosett was formerly an adjunct fellow with the Hudson Institute.
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