Oil-for-food grifting 

Yet another one from the subscription-only Wall Street Journal (boo! hiss! boo!). Evidence that Saddam had bribed government officials in other countries in order to get them to oppose a US-led invasion of Iraq has been turning up for a while, but here's a real bombshell:

A letter has come to The Wall Street Journal supporting allegations that among those favored by Saddam with gifts of oil was Benon Sevan, director of the U.N.'s Oil-for-Food Program. As detailed on this page on Feb. 9, Mr. Sevan's name appears on a list of individuals, companies and organizations that allegedly received oil allocations or vouchers from Saddam that could then be sold via middlemen for a significant markup. The list, compiled in Arabic from documents uncovered in Iraq's oil ministry, included many of Saddam's nearest and dearest from some 50 countries, including the PLO, pro-Saddam British MP George Galloway, and French politician Charles Pasqua. (Messrs. Galloway and Pasqua have denied receiving anything from Saddam.) According to the list, first published by the Iraqi daily Al Mada in January, Mr. Sevan was another beneficiary, via a company in Panama known as Africa Middle East Petroleum, Co. Ltd. (AMEP), about which we have learned quite a bit.

Mr. Sevan, through a U.N. spokesperson, has also denied the allegation. But the letter, which two separate sources familiar with its origins say was recovered from Iraqi Oil Ministry files, raises new questions about Mr. Sevan's relationship with Iraqi authorities.

The letter is dated Aug. 10, 1998, and addressed to Iraq's oil minister. It states: "Mr. Muwafaq Ayoub of the Iraqi mission in New York informed us by telephone that the above-mentioned company has been recommended by his excellency Mr. Sevan, director of the Iraqi program at the U.N., during his recent trip to Baghdad." The matter is then recommended "for your consideration and proportioning" and the letter is signed Saddam Zain Hassan, executive manager of the State Oil Marketing Organization (SOMO), the Iraqi state-owned company responsible for negotiating oil sales with foreign buyers. A handwritten note below the signature confirms the request was granted "by his excellency the Vice President of the Republic [presumably Taha Yassin Ramadan, now in U.S. custody] in a meeting of the Command Council on the morning of Aug. 15, 1998." Scrawled below that to one side is another note stating that 1.8 million barrels were allocated to the company two days later, on Aug. 17.
A second document shown to the Journal is a chart in Arabic with the heading "Quantity of Oil Allocated and Given to Mr. Benon Sevan." The Oil-for-Food program was divided into 13 phases in all, representing roughly six-month periods from December 1996 through June 2003. Under phase four (during which the letter was written), the chart shows 1.8 million barrels as having been allocated to Mr. Sevan and 1,826 million barrels "executed." In some phases the chart indicates that an oil allocation was approved but no contract was executed for some reason, so that the total allocation awarded to Mr. Sevan in phases four through 13 is 14.2 million barrels, of which 7.291 million were actually disbursed, according to the document.

Mr. Sevan could not be reached for comment on the letter, but did issue a denial in response to our Feb. 9 article. "There is absolutely no substance to the allegations . . . that I had received oil or oil monies from the former Iraqi regime," he said through a spokesman. "Those making the allegations should come forward and provide the necessary documentary evidence." The denial notwithstanding, the documents raise enough questions to warrant an investigation by the U.N., as well as by outside investigators, including the U.S. Congress. (A U.N. spokesman said yesterday that Mr. Sevan is on extended vacation until late April, after which he retires at the month's end.)


As further details of Oil-for-Food unfold, it becomes clearer than ever that the inspectors employed by the U.N. were, at best, lax in monitoring Saddam's get-rich-quick scheme. This is another area begging for investigation.
Inspections under Oil-for-Food, as former U.N. program-officer Michael Soussan indicated in The Wall Street Journal on Monday, amounted to little more than rubber-stamping whatever contract Saddam's regime initialed. On the export side, top-loading of the Essex and other vessels happened on the watch of inspectors from Dutch-based company Saybolt International BV, though no one has alleged publicly that Saybolt's inspectors knew what was going on. Saybolt's name appears on the Al Mada list too. Saybolt has denied it received anything from Saddam.

The import side too was rife with corruption, including kickbacks demanded by Iraq on imported goods, and shameful lack of quality controls on much of the food and medicine entering Iraq. The job of inspecting those goods fell mostly to a Geneva-based company called Cotecna Inspection, SA. In February 1999, the U.N. terminated a five-year contract with Lloyd's Register, which had set up an innovative system in Jordan for inspecting shipments of goods going into Iraq to ensure against sanctions-busting. The contract was put to tender and Cotecna won with the lowest bid. It has had the contract ever since and it was renewed by the Coalition Provisional Authority in November.

I still find it incredible that anyone ever really believed that Saddam would of his own volition comply with the rules of the oil-for-food program. Throughout his entire political career he has proven himself to be a master of treachery and corruption.

Even more amazing was the fact that some of the same people who said in 1998 that the UN sanctions were starving thousands of Iraqi children said in 2003 that the status quo was preferable to taking out Saddam.


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