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April 23, 2003

pro-Saddam British politican was rewarded handsomely for his efforts

George Galloway, the Labour backbencher, received money from Saddam Hussein's regime, taking a slice of oil earnings worth at least £375,000 a year, according to Iraqi intelligence documents found by The Daily Telegraph in Baghdad.

Also see Washington Post article on the subject.

Via Imshin and Instapundit and Tim Blair and Andrew Sullivan. (yes the blogosphere is all over this one.)

Now it appears Galloway siphoned his annual $600k kickback from Saddam through the U.N. oil for food program (aka oil-for-palaces program as General Tommy Franks put it.) This incredibly corrupt program allowed the U.N> to skim a 2.2% commission on Iraqi oil as well as keep 1,000 U.N. pencil pushers employed (not to mention 3,000 Baath party loyalists within Iraq.) If you think Enron was bad --- the books on the deals done through oil for food are completely closed with no independent accounting oversight.
Run, don't walk, to read Claudia Rosett's NY Times article on the subject before it goes into the archive. Excerpt:

The oil-for-food program is no ordinary relief effort. Not only does it involve astronomical amounts of money, it also operates with alarming secrecy. Intended to ease the human cost of economic sanctions by letting Iraq sell oil and use the profits for staples like milk and medicine, the program has morphed into big business. Since its inception, the program has overseen more than $100 billion in contracts for oil exports and relief imports combined.

It also collects a 2.2 percent commission on every barrel — more than $1 billion to date — that is supposed to cover its administrative costs. According to staff members, the program's bank accounts over the past year have held balances upward of $12 billion... the oil-for-food program has evolved into a bonanza of jobs and commercial clout. Before the war it employed some 1,000 international workers and 3,000 Iraqis. (The Iraqi employees — charged with monitoring Saddam Hussein's imports and distribution of relief goods — of course all had to be approved by the Baath Party.)

Initially, all contracts were to be approved by the Security Council. Nonetheless, the program facilitated a string of business deals tilted heavily toward Saddam Hussein's preferred trading partners, like Russia, France and, to a lesser extent, Syria. About a year ago, in the name of expediency, Mr. Annan was given direct authority to sign off on all goods not itemized on a special watch list. Yet shipments with Mr. Annan's go-ahead have included so-called relief items such as "boats" and boat "accessories" from France and "sport supplies" from Lebanon (sports in Iraq having been the domain of Saddam's Hussein's sadistic elder son, Uday)...

The quantities of goods involved in shipments are confidential, and almost all descriptions on the contract lists made public by the United Nations are so generic as to be meaningless. For example, a deal with Russia approved last Nov. 19 was described on the contract papers with the enigmatic notation: "goods for resumption of project." Who are the Russian suppliers? The United Nations won't say. What were they promised in payment? That's secret...

Bureaucratic lags notwithstanding, putting a veil of secrecy over tens of billions of dollars in contracts is an invitation to kickbacks, political back-scratching and smuggling done under cover of relief operations. Of course, with so little paperwork made public, it is impossible to say whether there has been any malfeasance so far — but I found nothing that would seem to contradict Gen. Tommy Franks's comment that the system should have been named the "oil-for-palace program." Why, for example, are companies in Russia and Syria — hardly powerhouses in the automotive industry — listed as suppliers of Japanese vehicles? Why are desert countries like Libya, Syria and Saudi Arabia delivering powdered milk?

And then there is this menacing list of countries that supplied "detergent": Syria, Lebanon, Libya, Algeria, Yemen and Sudan. Maybe all that multisourced soap was just a terrific bargain for doing the laundry. But there is no way for any independent parties — including the citizens of Iraq, whose money was actually spent on the goods — to know.

Mr. Annan's office does share more detailed records with the Security Council members, but none of those countries makes them public. There is no independent, external audit of the program; financial oversight goes to officials from a revolving trio of member states — currently South Africa, the Philippines and, yes, France.

As for the program's vast bank accounts, the public is told only that letters of credit are issued by a French bank, BNP Paribas. Kurdish leaders in northern Iraq, entitled to goods funded by 13 percent of the program's revenues, have been trying for some time to find out how much interest they are going to receive on $4 billion in relief they are still owed. The United Nations treasurer told me that that no outside party, not even the Kurds, gets access to those figures.

Then there is the program's compensation commission, which is supposed to dole out 25 percent of all oil-for-food proceeds to people and companies harmed by Saddam Hussein's invasion of Kuwait in 1990. It has so far dispensed $17.5 billion and approved a further $26.2 billion. Who decides on compensation claims? Commission members are picked from a "register of experts" supplied by Mr. Annan. One staff member told me that that this register cannot be released because it is "not public." The identities of the individual claimants are, of course, "confidential."

Another article on the subject from the U.K. Times: Saddam's billions from oil for food corruption

KICKBACKS from Iraq’s oil sales have run into billions of dollars because of loopholes in the United Nations Oil-for-Food system designed to feed the Iraqi people.
Diplomats said yesterday that Saddam Hussein’s regime sometimes exacted an illegal surcharge of as much as 55-75 cents (30-45p) a barrel on its daily oil sales of some two million barrels under the programme, although the amount was generally 15-25 cents.

“We thought they were getting at least $500 million a year in illegal kickbacks,” one Western official said.

The money funnelled to Baghdad helped to finance its banned weapons programmes, but it could also have been used to buy influence abroad...

The main beneficiaries were companies from Saddam’s political protectors at the United Nations, some of them trading companies with little more than a brass plate on the door.

Over the seven years of the Oil-for-Food programme, Russian companies got $7.3 billion of Iraqi business, almost twice as much as firms from any other country. Next on the list of leading trading partners were Egypt, with $4.3 billion; France, with $3.7 billion; and Jordan, the United Arab Emirates and China with $3 billion each.
Read the rest.

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