Oil-for-food scandal uproar sparks fierce denials
The UN’s report on the oil-for-food programme for Saddam Hussein’s Iraq drew widespread denials, terse dismissals and protestations of innocence yesterday, but also pledges to investigate from some of the 2,200 companies cited and countries with citizens named.
Russian officials angrily alleged that documents accusing companies and officials in that country were fake and the head of the nation’s electricity monopoly called for the report’s writers to be punished.
In a rare partial admission, Sweden’s Volvo admitted making payments through an agent to Iraqi authorities – saying it did not consider that bribery.
The report issued on Thursday rattled reputations around the world with charges of kickbacks in lucrative contracts in the 1996-2003 program, under which Iraq was allowed to sell oil provided the proceeds went to buying humanitarian goods to help offset UN sanctions.
Saddam, who could choose the buyers of Iraqi oil and the sellers of humanitarian goods, corrupted the programme by awarding contracts to – and getting kickbacks from – favoured buyers, said the report by the Independent Inquiry Committee led by former US Federal Reserve chairman Paul Volcker.
Countries like Russia that opposed sanctions got preferential treatment from Saddam’s regime, the report said.
Among those implicated in the report is former Kremlin chief of staff Alexander Voloshin, now board chairman of the state electricity grid UES. Russian Foreign Minister Sergey Lavrov, in remarks reported by domestic news agencies, claimed some of the documents cited by the commission used forged signatures.
And UES chief executive Anatoly Chubais said the commission knew Voloshin’s signature was faked on oil contracts, adding: “I hope that those responsible for the mistake will be punished.”
In Sweden, vehicle-maker Volvo, whose Brussels-based construction division was among the companies named in the report, acknowledged the company made payments through an agent to Iraqi authorities.
“We did business with an authority in Iraq. The same authority tells our agent that you have to pay a fee to do any business at all,” chief executive Leif Johansson was quoted as telling the Swedish news agency TT.
“When authorities said that, we drew the conclusion that this was the way to do business in Iraq,” he said. “No one linked that to bribes.”
Volvo AB no longer owns carmaker Volvo, which was sold in 1999 to the Ford Motor Company.
Switzerland said it has launched a criminal investigation focusing on four people connected to the oil-for-food programme, whom authorities did not immediately identify further. Swiss authorities already have fined a Geneva-based oil-trading company for paying kickbacks under the programme, but have not identified the company.
France will study the report carefully and “wants full light to be shed on the embezzlement that took place in the framework of the oil-for-food program,” Foreign Ministry spokesman Jean-Baptiste Mattei said. French judges are investigating 10 French officials and business leaders on suspicion they received oil allocations as kickbacks.
Among them is former UN ambassador Jean-Bernard Merimee, who held the post from 1991-95, and according to the report received more than 165,000 dollars in commissions from oil allocations awarded to him by the Iraqi regime.
The report also said that former Interior Minister Charles Pasqua, now a senator, was awarded 11 million barrels of oil, an allegation he denied yesterday.
“I never received anything,” Pasqua said, adding that he believed somebody used his name without his knowledge. “It is obvious to me that the Americans want to implicate France.”
In Australia, Prime Minister John Howard said he doubted the Australian Wheat Board, which was the single largest supplier of humanitarian goods under the programme, would have knowingly made improper payments.
The report said the board had made “side payments” for transportation of the grain to a Jordanian company that was part-owned by Saddam Hussein’s government.
Andrew Lindberg, managing director of the wheat board’s successor AWB, said: “We didn’t know that the money, that we believed we were paying for transport, was being diverted to the regime.”
An Italian politician named in the scandal, Roberto Formigoni, said he received “neither a drop of oil, nor a single cent”.
Fiery British MP George Galloway, who founded a charity aimed at fighting the UN sanctions against Iraq, said “there is a witchhunt going on” and accused a US senator of falsifying evidence against him.
Germany’s Siemens aid it found no evidence of kickbacks allegedly paid by its French, Turkish and Middle East subsidiaries. A DaimlerChrysler statement said the company was “aware” of the report, but declined to comment further. Anglo-Swedish pharmaceutical company Astra Zeneca also denied alleged wrongdoing.
The report also implicated Lukoil Asia Pacific, a company the report called a subsidiary of Russia’s No. 1 producer, Lukoil.
Lukoil’s spokesman, Dmitry Dolgov, said he had never heard of the company, adding that investigators had worked with Iraqi documents, which could have been forged.
Dolgov noted that investigator Robert Parton resigned from Volcker’s committee in April, reportedly because he believed it ignored evidence critical of UN Secretary-General Kofi Annan.
“This creates the impression that this report is aimed at distracting attention from the oversights of UN officials and laying he blame with certain companies,” Dolgov said.
