Iraq Funded Al Qaeda

[quote]ZEB wrote:
deanosumo:

In your defense you have stated that you are not wildly fond of John Kerry. I enjoyed that comment![/quote]

Yes, I was a Wesley Clark fan myself. But the man was too smart for middle America, I guess.

deanosumo:

I have to agree with you again, Clark is a good man. His reputation took a beating from some other Generals. I think that’s part of politics…the dirty part.

[quote]
I guess we should wait until CBS News runs it on 60 Minutes.

Perhaps that bastion of objectivity, The Toronto Globe anf Mail, should run it on the front page before we give this story credance. [/quote]

Rainjack, stop frothing. It has nothing to do with where the item came from. Did you read the article. It is full of “could of”, “might” and “possible”.

It isn’t really saying anything at all except outlining some areas that require further exploration to determine if there really is a story. I hope they examine those areas and find out.

I want the truth, not wild conjecture.

vroom -

Frothing? You must have mistaken my attempts at sarcasm for anger. If you want frothing, just wait until we get to the gov’t healthcare donnybrooke - that’ll get me frothy.

We’re never going to get the UN to come out and admit to anything regarding the Oil For Food scandal. So you wishes of hard facts may go un-fulfilled.

There’s to be a Fox News special tonight focusing on the Oil for Food goat screw.

[quote]Right Side Up wrote:
How about…NOW! Start a thread entitled “ZEB’s Liberal side” – that ought to be a hoot.

ZEB wrote:
Actually, Jeff’s posts are witty and factual. Sometimes he brags about being a republican and the potentiality of President Bush winning reelection. I can see where the latter would bother you.

Right Side Up wrote:
HA! One of the best laughs yet. You do the latter all the time – you constantly remind us with your omnipotent tone how Bush WILL win!
[/quote]

Where’s that thread ZEB? I’m eager to see this – I truly look forward to it!

You pointed out before that I’ve let a thread drop in the face of being wrong…I’d like to point out that you’ve done the same in the face of being shown as a hypocrite. You do all the time what you said JeffR does, and you said you could see how JeffR’s speech and tone could bother some…a hypocrite among many, many other things.

RSU wrote: “bla bla bla bla”

Hey kid take me up on my challenge!

Your words are starting to look sort of pale in comparison to your vigor to back them up! Take me up on my challenge and show us that you are more than just another college kid with a keyboard and a lot of extra time. Ha ha.

( In the interest of the integrity of the forum I took you off ignore and you can now PM me, or not, your choice.)

[quote]vroom wrote:

I guess we should wait until CBS News runs it on 60 Minutes.

Perhaps that bastion of objectivity, The Toronto Globe anf Mail, should run it on the front page before we give this story credance.

Rainjack, stop frothing. It has nothing to do with where the item came from. Did you read the article. It is full of “could of”, “might” and “possible”.

It isn’t really saying anything at all except outlining some areas that require further exploration to determine if there really is a story. I hope they examine those areas and find out.

I want the truth, not wild conjecture.[/quote]

vroom:

It would help immensely if the U.N. would open up info on the accounts, which it has and which it has refused to provide. It’s hard to get more than conjectures when the organization holding all of the relevant information refuses to release it.

I’ll say this much – the reporting that Claudia Rossett has done for the WSJ makes this look like there was a good possibility that extremely underhanded, fraudulent activity was occurring. The fact that the U.N. refuses to release any of the relevant accounting records should be a huge red flag that there is something amiss.

From the Wall Street Journal Europe

What’s ‘Illegal’?
Kofi Annan helped Saddam Hussein steal food from babies.

BY CLAUDIA ROSETT
Wednesday, September 22, 2004 12:01 a.m. EDT

When U.N. Secretary-General Kofi Annan opined last week to the BBC that the U.S.-led overthrow of Saddam Hussein had been “illegal,” two words came instantly to my mind: baby food.

No, I’m not comparing Mr. Annan’s thoughts to pabulum. He is a smart man, adept enough that even in his BBC moment of condemning the U.S. (perhaps mindful that the U.S. is the U.N.'s chief financial backer) he took the trouble to blur responsibility for his own words, amending his use of “I” to the royal “we.” Said Mr. Annan: “From our point of view, from the charter point of view, it was illegal.”

It’s unclear exactly whose collective view Mr. Annan thinks he was authorized to express, or under what terms in the U.N. charter he casts himself on some occasions as the hapless servant of the Security Council, and at other times, such as this, as the outspoken chief judge of world law.

But if Mr. Annan wants to discuss right and wrong in Iraq, which seems to be the real issue, then it is time to talk about baby formula. Why? Because Mr. Annan’s preferred means of dealing with Saddam was a mix of U.N. sanctions and the U.N. relief program called Oil-for-Food. And the heart and soul of Oil-for-Food was supposed to be the feeding of sick and hungry Iraqi babies–including the purchase by Saddam, under U.N. auspices, of large amounts of baby formula. When Oil-for-Food was launched in 1996, it was advertised by the U.N. as a response to such horrors as pictures of starving Iraqi children and alarming statistics about infant mortality in Iraq, released by one of the U.N.'s own agencies, Unicef.

It was in service of that U.N. mix of sanctions and humanitarian relief that Mr. Annan after visiting with Saddam in Iraq in 1998 returned to New York to report: “I think I can do business with him.”

And oh what a lot of business the U.N. did. Mr. Annan’s Secretariat collected more than $1.4 billion in commissions on Saddam’s oil sales, all to supervise the integrity of Saddam’s $65 billion in oil sales and $46 billion in relief purchases. The official aim of this behemoth U.N. aid operation was solely to help the people of Iraq, while the U.N. waited for sanctions to weaken Saddam enough so he would be either overthrown from within or forced to comply with U.N. resolutions on disarmament. Instead, Saddam threw out the U.N. weapons inspectors for four years, and, by estimates of the U.S. General Accounting Office, fortified his own regime with at least $10.1 billion grafted and smuggled out of Oil-for-Food.

But of all the abuses of Oil-for-Food committed by Saddam–and not only allowed but in effect approved and covered up by Mr. Annan’s U.N.–the most cynical has to have been the trade in baby formula. This was one of Saddam’s imports that few even among the U.N.'s critics dared question. Who could be so heartless as to object to food for hungry children? And given the secrecy with which Mr. Annan ran Oil-for-Food (as hapless servant of a Security Council packed with big-time business partners of Saddam, such as France and Russia), no one outside the U.N. except Saddam and his handpicked contractors knew much in any event about Baghdad’s traffic in baby formula.

The U.N. insisted that the identities of Saddam’s contractors and the terms of his deals remain confidential. Even today, though the names have leaked, many of the vital details of these contracts (such as quantity and quality of goods) remain smothered in the continuing secrecy imposed by the U.N.-authorized investigation into Oil-for-Food, led by former Fed chairman Paul Volcker. And Mr. Volcker, apparently focused mainly on bribery allegations involving officials of the U.N. itself, may never get around to such broader but also important matters as Oil-for-Baby-Food.

But since Saddam’s fall, a few windows have opened through which one can glimpse Saddam’s U.N.-approved trade in nursery nutrition. Chief among them is a pricing study carried out by the U.S. Defense Department’s contract auditing agencies last year, shortly after Saddam’s overthrow. Lest anyone suspect the Pentagon of bias, it would of course be handy to draw on other studies as well. But there are none. Mr. Annan’s Secretariat, while swimming in cash from its 2.2% commission on Saddam’s oil sales, never got around to systematically examining Saddam’s contract prices. That was a notable omission, given that Saddam’s scam on relief contracts was one of the oldest and simplest in the book: overpaying for goods, using relief funds meant for the Iraqi public; then collecting part of those overpayments in the form of kickbacks.

And when it came to overpricing, which any veteran aid worker should surely recognize as a flashing red sign of probable graft, one of the most roundly abused categories under Oil-for-Food appears to have been the original rationale for the program: food itself.

The Pentagon pricing study looked at a sample of 759 big-ticket Oil-for-Food contracts still awaiting full delivery when Saddam fell–a snapshot of the program in its final years. Among those were 178 contracts for food. Of these almost 90% were overpriced by an average of about 22%-- more than twice the 10% figure often quoted as Saddam’s standard kickback. In this sample, totaling $2.1 billion in U.N.-approved grocery shipping by Saddam, the potential rake-off totaled $390 million.

And within that Oil-for-Food sample shopping spree, the baby formula deals were estimated to be even more egregiously overpriced than the average contract for most other staples. Compared to the hundreds of baby food and milk contracts in the overall program (many of those with France and Russia) the Pentagon sample was small. The study looked at four baby formula contracts, two originating in Egypt, one in Tunisia and one in Vietnam–totaling $43 million (which in any normal relief program might actually rank not as a small sample, but as a lot of money). But it seems telling that every single one of those four baby-formula contracts appeared “potentially overpriced” by about 26%, for a total of $11 million in potential overpayments. On the biggest of these sample contracts, a $26 million deal between Saddam and a Vietnamese dairy company–approved by the U.N. in October 2002, in the thick of the U.N. debate over going to war to remove Saddam–the estimated overpricing of 26% worked out to well over $5 million on that contract alone.

Translation: In late 2002, while Mr. Annan was lobbying against U.S.-led removal of Saddam, he was running a U.N. program in which money meant for baby formula, among other goods, was very likely flowing into the pockets of Saddam and his sons and cronies.

Somehow, that was the kind of problem that Mr. Annan’s office managed to miss, although according to a November 2002 statement to the Security Council by Oil-for-Food director Benon Sevan, U.N. staff in Iraq had by then made 1,187,487 total “observation visits” to ensure the integrity of Oil-for-Food. More than one million of those observation visits were devoted to checking on food and nutrition (and all of them were paid for out of the U.N. Secretariat’s 2.2% oil sales commissions from Saddam).

In the same November 2002 statement, Mr. Sevan reported that “acute malnutrition” was still rampant among young children in Iraq. Mr. Sevan explained that although malnutrition had been halved since Oil-for-Food began (all this was based on Saddam’s statistics), it was still double the rate of 1991–a situation Mr. Sevan himself described as “far from satisfactory.” But the solution prescribed by Mr. Annan was not to spot and stop the kickbacks. Rather, while lamenting what he described in Nov. 2002 as the “dire funding shortfall” of Oil-for-Food, Mr. Annan’s solution again and again was to urge more oil sales by Saddam. Which meant, most likely, more resources earmarked to feed babies but diverted to the Baghdad regime (and, by extension, more commissions for the U.N.).

It would be interesting for someone with full access to the contract details – meaning, I suppose, the UN’s own investigation into itself – to total the scores of Oil-for-Food contracts for baby formula, weaning cereal, milk and so on (much of it bought from Security Council member nations Russia and France), and employ some pricing experts to fill in the rest of the numbers.

But what we know already is that Mr. Annan, whose Secretariat turned a blind eye to Saddam’s food pricing scams, has never apologized for presiding over the biggest fraud in the history of relief. He has not used the word “illegal.” The closest he’s come has been to admit this past March, after much stonewalling, that there may have been quite a lot of “wrong-doing”–before turning over the whole mess over to a U.N. investigation that has since smothered all details with its own blanket of secrecy.

Mr. Annan is due to step down next year. If he wants to leave a legacy more auspicious than having presided over Oil-for-Fraud, he might want to devote his twilight time at the U.N. to mending a system in which a U.N. Secretary-General feels free to describe the overthrow of a murderous tyrant as “illegal,” but no one at the top seems particularly bothered to have presided over that tyrant’s theft of food from hungry children.

Ms. Rosett is a fellow at the Foundation for the Defense of Democracies and the Hudson Institute. Her column appears here and in The Wall Street Journal Europe on alternate Wednesdays.


Sorry, couldn’t resist.

BB, yes, it would be nice if more information was made readily available. However, the thrust of the article you post is a bit overdone as well.

Okay, there may have been corruption in the UN with respect to allowing overpriced contracts to go through. Maybe. However, the author really lays into Kofi as if he personally is at fault for everything.

I suspect the UN is an exceedingly tough animal to steer, since everyone in it is diametrically opposed to everyone else in it. Who knows.

However, on another tack, I think it would be hard to eliminate overpriced purchasing without ending up on the wrong side of publicity. UN denies Iraqi citizens access to baby food! This is the reality of the other side.

I can imagine that any country buying under sanctions represents an opportunity for price gouging. These things are a lot harder to stop than it might sound. Hell, even selling a premium product and replacing it with a lower quality item represents an opportunity for misappropriation of funds.

The main purpose of the program is to ensure that oil revenues were used to purchase food instead of weapons. I don’t think that some siphoning at the top changed the nature of the way in which Iraq was allowed to spend its oil revenues. Was the point to restrict the products purchased? Was that achieved?

So, given this, what is the situation here? It is that the credibility of the UN needs to be undercut because it is questioning the Bush administration’s handling of Iraq. The credibility of anyone who disagrees with or campaigns against the Bush administration is attacked. It happened to McCain, it happened to Kerry, and now it will happen to the UN.

Why? Because if you can question the credibility of the UN then you can convince the public that when it disagrees with your foreign policy that it is a worthless organization.

I find this more sinister than the fact that some money leaked between the cracks. Money is always leaking between the cracks. Maybe it is time to stop playing two-face with the UN, sucking up to it when it has something you need and demonizing it when it doesn’t agree with you.

What would be the odds of that?

vroom:

Let me get this straight: Your position is that the embezzlement of untold millions of dollars over a decade, some of which funds undoubtedly went to the Hussein regime and some of which went to U.N. bureaucrats (including, if you’ve been following the story over the past year, Kofi Annan’s son and Kofi Annan’s number 2 guy at the U.N.) and unscrupulous persons in the countries most opposed to the U.S. actions in Iraq, including France, Germany and Russia isn’t a problem; The refusal of the U.N. to release basic contractual records on the accounts isn’t a problem; The fact that Hussein’s regime likely got kickbacks, which were basically laundered money that is hard to trace – damn near impossible given the U.N. won’t release the contractual records, isn’t a problem. After all, that’s just a little money falling through the cracks – embezzlement of untold millions of dollars over a decade by both those charged with overseeing a program and the regime supposdely sanctioned just can’t be helped, so we should just let it go.

But being critical of the U.N., now that’s a problem. Especially if one wishes to go to them and ask them to condemn genocide in Africa, which they are inexplicably reluctant to do (inexplicable except that France and China don’t want them to do so). Or get them to do what they supposedly have expertise in doing, such as administering aid programs. Obviously you cannot be critical of an entity and then expect it to do its job.

BTW, here are articles by Claudia Rossett, the best journalist covering this story, spanning back quite awhile – feel free to read up at your leisure:

http://www.commentarymagazine.com/SpecialArticle.asp?article=A11705017_1

http://nationalreview.com/comment/rosett200404182336.asp

There would either be no story or corroboration if the U.N. would simply open up the books. Which leads inexorably to the question: Why won’t they open up the books? It doesn’t necessarily imply Rossett’s conclusions are all correct, but it does imply evidence of untoward things the U.N. doesn’t want to see the light of day. Until they open up the records, they open themselves up to stories that amount to best guesses.

Vroom,

“So, given this, what is the situation here? It is that the credibility of the UN needs to be undercut because it is questioning the Bush administration’s handling of Iraq. The credibility of anyone who disagrees with or campaigns against the Bush administration is attacked. It happened to McCain, it happened to Kerry, and now it will happen to the UN.”

Your apologism knows no bounds.

The UN - like any institution accountable to its members - must answer for its trangressions. You seem to suggest Bush wants to drag the UN through the mud because it stood in the way of his war. On some levels, I think that is a fair question: why did the UN stand in his way?

Thus begins an inquiry into what’s going on at the UN. The Oil-for-Palaces kickback system was known about long before bombs were dropped on Baghdad. This scenario was discovered in the mid-1990’s - there was plenty of evidence that Saddam was skimming the Oil-for-Food program. That’s bad enough on its face; the question is did it compromise the UN and its job?

Between the Oil-for-Palaces program, oil contracts on the ground for Russia and France, odious debt, and Kofi Annan’s extreme inconsistencies, a pattern emerges. The UN should be held accountable.

And it’s not just some grudge to take a swipe at the UN.

And, by the way, the Bush administration is not in the business of apologizing for its policy decisions. They will defend them. As would Kerry or anyone else at the helm. I realize that hurts your hypersensitive feelings, but tough shit. In important matters, especially something as serious as war, the Bush administration is going to go eyeball-to-eyeball defending what they’ve done. No one, liberal or conservative, would - or should - be any different.

We must get out of this silly mushy-headedness of ‘all ideas are ok, I’m open-minded to your alternative opinions’. Being broad-minded is wonderful and recommended, but it has limits. Telling someone ‘I’m right and you’re wrong’ is the essence of democratic politics, even if it causes the occasional black eye or twisted panties. The Bush administration attacks those that disagree with them, just as those that disagree with Bush’s policies attack him. The UN is fair game.

[quote]BostonBarrister wrote:
BTW, here are articles by Claudia Rossett, the best journalist covering this story, spanning back quite awhile – feel free to read up at your leisure:

http://www.commentarymagazine.com/SpecialArticle.asp?article=A11705017_1

http://nationalreview.com/comment/rosett200404182336.asp

There would either be no story or corroboration if the U.N. would simply open up the books. Which leads inexorably to the question: Why won’t they open up the books? It doesn’t necessarily imply Rossett’s conclusions are all correct, but it does imply evidence of untoward things the U.N. doesn’t want to see the light of day. Until they open up the records, they open themselves up to stories that amount to best guesses.[/quote]

Amidst the debate, you have lost track of the fact that the US have also funded the Al-Qaeda, yet you have not suggested anywhere that India which is a victim of Al-Qaeda’s acts should invade the US for being a sponsor of terrorism.

Interesting –

When was the U.S. funding al Queda? [I’m imagining some argument here that the U.S. funded bin Laden when he was fighting the Russians] And, if it was doing so, how does that affect current policy? And, per India, where is the allegation that the U.S. funded al Queda in order that it attack India, which would be the implication of Saddam funding al Queda (which, as I said, isn’t proved).

There are other problems with the oil-for-food scandal other than possible terrorist funding, but I encourage you to read Ms. Rossett’s articles.

Okay, I don’t know where you get the “apologist” bullshit from. You guys want it both ways.

There are two different issues here. Whether the UN itself has corruption problems and whether or not the UN has been hoodwinked by Saddam so that he could get money out of the system.

I’m saying that if there was some hoodwinking going on then it is certainly understandable. If there is real corruption, then lets get to the bottom of it and take action.

I’m so tired of being labelled by people who can’t pull things apart to look at the individual components. The title of the thread, in case you have forgotten, is “Iraq Funded Al Queda”, now this does not have to be equated to “Corruption in the UN”.

Let’s wait until the chips fall. Maybe it is the same issue. Maybe it is not. I’m suggesting it is possible for it not to be the same issue.

However, the smear tactics look awful familiar. Why don’t we get the facts before we convict everyone? Wanting to wait until the information is known is not being an apologist, it is simply the right thing to do.

I find it ironic that people are kvetching because the UN won’t release documents. Documents, and their release or lack of release are causing a lot of stir these days.

Now take your fear, outrage and indignation out on someone else. Nitwits.

Vroom,

In short, I was responding to your comments on why the UN was being investigated - and castigated - by the Bush administration.

If you don’t want to discuss what’s behind those motives, don’t bring it up.

Interesting developments in the Oil for Food scandal, although nothing definitive as of yet:

CIA to Report on Iraq Oil Vouchers

By DAVID S. CLOUD
Staff Reporter of THE WALL STREET JOURNAL
October 5, 2004; Page A8

WASHINGTON – A new intelligence report on the search for Iraq’s illicit weapons lists hundreds of individuals and companies who, before the U.S. invasion last year, received vouchers from Saddam Hussein to purchase Iraqi oil at below-market prices, officials familiar with the report said.

The 1,400-page report by Central Intelligence Agency weapons inspector Charles Duelfer, which is scheduled to be made public Wednesday, doesn’t reach a conclusion about whether use of the vouchers violated international sanctions or an individual country’s laws. But it asserts that Mr. Hussein personally managed the effort and used some of the proceeds, which exceeded $1 billion in 2002, for illegal-weapons procurement, the officials said.

The report names entities in France, Russia, Poland and other countries as involved in the voucher scheme or in assisting Iraq’s prewar procurement activities. Officials wouldn’t say if U.S. companies or individuals were implicated.

Both Iraq’s use of vouchers as well as many names of recipients have already been disclosed. Mr. Duelfer, a former United Nations inspector appointed by former CIA director George Tenet this year, may be criticized for recycling the story to help the Bush administration buttress its claim that the Iraq invasion was necessary because Mr. Hussein was a growing threat. Some names of individuals and companies involved have been disclosed, especially in European news reports, several U.S. officials said.

But the details about Iraq’s activities may help President Bush make the point Mr. Hussein hadn’t lost his appetite for banned weapons and that the sanctions designed to deny him arms were weakening, in part because of the assistance to Mr. Hussein from countries on the U.N. Security Council.

Under the U.N.-administered oil-for-food program, which operated from 1996 until late last year, Iraq was permitted to sell oil and use most of the revenue to buy humanitarian goods. But use of vouchers and kickbacks enabled the Iraqi regime to manipulate the program, the officials said. The Iraqi vouchers entitled the recipients to buy oil at below-market prices. The companies and individuals that were favored by Mr. Hussein could sell the oil or the vouchers to third parties at a profit. In some cases, part of the profit was kicked back to bank accounts controlled by Mr. Hussein or other Iraqi officials, the officials said.

Citing interrogations and documents signed by Mr. Hussein and other former Iraqi officials, the report lays out evidence that Iraq had a continuing interest in acquiring such weapons if U.N. sanctions were lifted.

Democrats may raise questions about the report’s linkage between Iraqi corruption and the weapons threat. One official said the data show that Mr. Hussein and his sons were steadily taking in more money from the oil vouchers and other schemes, but he said that Mr. Hussein may have used some proceeds for personal profit, rather than for weapons activities.

Write to David S. Cloud at david.cloud@wsj.com


Contractor Took
Bribe in Oil Deal,
Iraqi Report Says

By STEVE STECKLOW
Staff Reporter of THE WALL STREET JOURNAL
October 5, 2004; Page A3

A confidential report from the post-Saddam Hussein Iraqi government alleges that an inspector contracted by the United Nations through a Dutch company was bribed $104,000 to falsify documents in an oil-smuggling scheme that netted the former Iraqi regime $9 million.

The alleged bribing of an employee of Saybolt International BV, based in Vlaardingen, is described in a February report by Iraq’s State Oil Marketing Organization, or SOMO, which details corruption in the U.N.'s controversial oil-for-food program.

Under the program, which operated from 1996 until last year, Iraq was permitted to sell oil under U.N. auspices and use most of the revenue to purchase humanitarian goods. Saybolt, a petroleum-inspection company, was hired by the U.N. to monitor Iraqi oil exports under the program.

The report suggests the unnamed Saybolt inspector was bribed to falsify documents that understated the amount of oil loaded on two cargoes in 2000 and 2001. The cargoes together included an extra 500,000 barrels of crude that were sold outside the U.N. program, with most of the proceeds going directly to the regime.

“Our information indicates that the bribery of the individual working for the Dutch company Saybolt to pay for his falsifying documents cost 104 thousand dollars,” states the report, which was reviewed by The Wall Street Journal. It concludes that the forgery scheme was ordered personally by Mr. Hussein and carried out by “several groups of highly ranked people.”

A spokesman for Saybolt stated that the company is investigating the allegations, adding, “Our inquiries both at the time and subsequently do not confirm the allegations of a bribe. But we’re prepared to look into it further, given the new details.” Saybolt conducted an investigation three years ago when the smuggling scheme first surfaced and reported at that time to the U.N. that it found no wrongdoing on the company’s part.

The alleged bribe is described in an appendix to the SOMO report about Ibex Energy France, a small French oil-services company, which had been authorized by Iraq to lift oil for the two cargoes in question. Jean Paul Cayre, Ibex’s general manager, said his company sold its allocations to Trafigura Beheer BV, a Netherlands-based oil-trading company, and denied Ibex paid any bribe. “I know for a fact we didn’t,” he said. Trafigura also denies any wrongdoing.

The alleged bribe is likely to come up today, when a Saybolt official is scheduled to testify before a U.S. congressional subcommittee probing the oil-for-food program. The subcommittee, whose chairman is Rep. Christopher Shays (R., Conn.), is one of at least five House and Senate panels examining alleged oil-for-food corruption. The U.N. also has appointed an independent panel headed by Paul Volcker, former chairman of the Federal Reserve, to conduct an investigation. Saybolt says it is actively cooperating with all of the probes.

A U.N. spokesman said that this is the type of allegation that will be investigated by Mr. Volcker’s panel and that the organization has directed its private contractors to cooperate with the various probes.

The allegations surrounding the Saybolt employee raise further questions about the U.N.'s monitoring of the program. The Wall Street Journal reported last month that the U.N. found no conflict of interest in the awarding of an oil-for-food contract to a Swiss company that employed the son of Secretary-General Kofi Annan, Kojo Annan, as a consultant in a review that was completed in less than a day. The U.N. review also failed to discover that, after the contract was signed, the company, Cotecna Inspection Services SA, agreed to keep Kojo Annan on its payroll for an entire year. (Both Kojo Annan and Cotecna deny any conflict of interest and say the younger Mr. Annan continued to be paid as part of a noncompete agreement.) (See related article.)

The bribery allegation surrounding the Saybolt employee adds a new wrinkle to the already-strange odyssey of an oil tanker named the Essex that was first described by The Wall Street Journal in an article in May 2002. The case remains under investigation by U.S. authorities, who continue to hold $10 million in Trafigura funds in escrow.

The episode began in May 2001 when the Essex docked at an offshore Iraqi oil platform and loaded up with 1.8 million barrels of U.N.-authorized crude oil. After U.N. inspectors left the scene, the cargo was topped off with an additional 230,000 barrels.

The Essex was chartered by Trafigura, which had purchased the oil from Ibex. The entire cargo eventually was sold to U.S. refiners. But after the ship left Iraq, the captain blew the whistle, notifying U.N. and U.S. authorities by fax about the extra oil. The entire cargo was seized in the Caribbean.

Trafigura blamed Ibex and filed a lawsuit in Britain’s High Court of Justice, which it later dropped. Before the case ended, however, Ibex’s Mr. Cayre filed a sworn affidavit in which he said the top-up scheme was cooked up by Trafigura to make up for an earlier loss on an Iraqi oil deal that fell through in 1999. Mr. Cayre said he agreed to participate in the scheme because his company depended on SOMO for most of its business. He said he paid SOMO about $3.7 million through a Lebanese bank account for the illegal oil and split the remaining profits 40-60 with Trafigura.

Mr. Cayre also alleged the two companies had successfully pulled off the same scheme in 2000 with the same ship. That time, he said, he paid SOMO about $5.4 million for 272,000 barrels of illegal oil.

Mr. Cayre said in the affidavit Trafigura officials panicked when they learned of the captain’s fax and asked Mr. Cayre to shred all of Ibex’s records related to the cargo. Soon after, he said, Trafigura gave him a new file to replace the shredded file and said he was told that “a similar file” would be given to U.S. authorities.

Trafigura has denied any role in the smuggling scheme, including falsifying documents.

Write to Steve Stecklow at steve.stecklow@wsj.com

More, big stuff concerning the corruption of the Oil-for-Food program – and it’s not even by Claudia Rossette. Seems her tireless coverage of this story is beginning to pay dividends – and shows why the sanctions weren’t working:

Hussein Used Oil to Dilute Sanctions
Report Says He Gave Valuable Vouchers to Those Who Helped Iraq

By Robin Wright and Colum Lynch
Washington Post Staff Writers
Thursday, October 7, 2004; Page A01

Saddam Hussein made $11 billion in illegal income and eroded the world’s toughest economic embargo during his final years as Iraq’s leader through shrewd schemes to secretly buy off dozens of countries, top foreign officials and major international figures, according to a new report by the chief U.S. weapons inspector released yesterday.

Oil “vouchers” that could be resold for large profits were given to officials including Indonesian President Megawati Sukarnoputri, French Interior Minister Charles Pasqua and former Russian presidential candidate Vladimir Zhirinovsky as well as governments, companies and influential individuals in Europe, the Middle East and Africa, the report said.

Another recipient was Benon Sevan, the former top U.N. official in charge of humanitarian relief. Sevan ran the former oil-for-food program designed to benefit the Iraqi people in the face of economic sanctions intended to cripple Saddam’s regime, the report says.

The report, written by chief U.S. weapons inspector Charles A. Duelfer, indicated that some of the oil vouchers were used legitimately by the recipients. Not all were fully cashed in, and some were not used at all. Companies or individuals from at least 44 countries received vouchers, the report said.

Russia, France and China – all permanent members of the U.N. Security Council – were the top three countries in which individuals, companies or entities received the lucrative vouchers. Hussein’s goal, the report said, was to provide financial incentives so that these nations would use their influence to help undermine what Duelfer called an “economic stranglehold” imposed after Iraq’s 1990 invasion of Kuwait.

“At a minimum, Saddam wanted to divide the five permanent members and foment international public support of Iraq at the U.N. and throughout the world by a savvy public relations campaign and an extensive diplomatic effort,” the report said.

Hussein’s effort to thwart the embargo and divide the nations that supported it has long been known, but the Duelfer report reveals the lengths to which he went in attempting to defy the United Nations. The details could buttress Washington’s contention that important players were preventing the U.N. program from squeezing Saddam, forcing the United States to launch a war to topple him.

Several American companies on the list, compiled from 13 documents kept by Hussein’s vice president and oil minister, were given vouchers to purchase billions of dollars of oil at discounted prices. The U.S. companies are not named in the report because of privacy laws, U.S. officials said.

The voucher system was particularly clever because the documents were negotiable and could be resold to oil companies or other buyers at profits of 10 to 35 cents per barrel. A voucher for 10 million barrels could generate between $1 million and $3.5 million to the holder.

The report notes that Indonesia’s president was the recipient of a voucher that allocated her 6 million barrels. The former French interior minister received a voucher for 11 million barrels. The Russian foreign ministry received a voucher for 55 million, while Zhirinovsky got one for 53 million barrels and the Russian Communist Party’s voucher totaled 110 million barrels.

An Iraqi newspaper said earlier this year that Sevan, whose activities are now under investigation for the by former Federal Reserve chairman Paul A. Volcker, received vouchers to purchase millions of barrels of Iraqi crude through several companies. The Duelfer report says that Sevan was allocated 13 million barrels of oil, of which 7.3 million were cashed in.

Sevan has denied the charges and claimed to friends that he is the victim of a smear campaign.

Hussein’s multi-pronged strategy also included secret deals with neighboring countries to circumvent U.N. sanctions by smuggling oil, which reaped profits for both sides, and illicit government-to-government trade agreements. The subsequent success in turn “emboldened” Hussein to pursue programs related to weapons of mass destruction as well as conventional arms, the Duelfer report says.

“Despite U.N. sanctions, many countries and companies engaged in prohibited procurement with the Iraqi regime throughout the 1990s, largely because of the profitability of such trade,” Duelfer reported. In turn, Hussein sought to make the embargo a “paper tiger,” the report says.

Companies in countries closely allied with the United States, including France, Italy, India, Turkey, Jordan and Romania, may have sold Hussein dual-purpose equipment that could be converted for production of unconventional weapons.

Hussein survived the most comprehensive embargo ever imposed by subverting the very U.N. program introduced in 1996 to help the Iraqi people survive it. Hussein’s government made an estimated $1.7 billion between 1996 and 2003 by shrewdly but secretly manipulating the U.N. oil-for-food program, the report says.

The humanitarian program was backed by the United States as a means of controlling Hussein’s oil revenue, which had to be channeled through the United Nations. The world body then had to approve the spending of profits on basic necessities for the Iraqi people. But the former Iraqi leader ordered his regime to come up with an array of plans to sell oil under the table so he could spend the money as he saw fit.

The number of countries and companies involved in the schemes to undermine or challenge U.N. sanctions increased dramatically from the time the oil-for-food program was introduced until Hussein’s removal from power last year, the report added.

The Duelfer report concludes that Baghdad exploited the program “to give individuals and countries an economic stake in ending sanctions.” Hussein introduced a system of rewards for illegally dealing with Baghdad, while also playing on international sympathy and “successfully arguing its case that the sanctions were harming the innocent.”

The success of Hussein’s regime in circumventing the U.N. embargo is “grossly obvious,” the report says. “It is also grossly obvious how the sanctions perverted not just the [Iraqi] national system of finance and economics, but to some extent the international markets and organizations.”

The Bush administration sought yesterday to highlight this aspect of the Duelfer report to counter the finding that Hussein probably had produced no new weapons of mass destruction since 1991, after the U.S.-led coalition forced Iraq to retreat from Kuwait.

More, and even more disturbing – the WaPo story above leaves out the part about the French:

Saddam and the French Connection

FRASER NELSON, FRASER NELSON AND JAMES KIRKUP

Key points

? Saddam bribery revealed
? WMD said to have been destroyed
? Blair accepts mistake over WMD

Key quote
“Just as I have had to accept that the evidence now is that there were not stockpiles of actual weapons ready to be deployed, I hope others have the honesty to accept that the report also shows that sanctions weren?t working” - Tony Blair

SADDAM HUSSEIN believed he could avoid the Iraq war with a bribery strategy targeting Jacques Chirac, the President of France, according to devastating documents released last night.

Memos from Iraqi intelligence officials, recovered by American and British inspectors, show the dictator was told as early as May 2002 that France - having been granted oil contracts - would veto any American plans for war.

But the Iraq Survey Group (ISG), which returned its full report last night, said Saddam was telling the truth when he denied on the eve of war that he had any weapons of mass destruction (WMD). He had not built any since 1992.

The ISG, who confirmed last autumn that they had found no WMD, last night presented detailed findings from interviews with Iraqi officials and documents laying out his plans to bribe foreign businessmen and politicians.

Although they found no evidence that Saddam had made any WMD since 1992, they found documents which showed the “guiding theme” of his regime was to be able to start making them again with as short a lead time as possible."

Saddam was convinced that the UN sanctions - which stopped him acquiring weapons - were on the brink of collapse and he bankrolled several foreign activists who were campaigning for their abolition. He personally approved every one.

To keep America at bay, he focusing on Russia, France and China - three of the five UN Security Council members with the power to veto war. Politicians, journalists and diplomats were all given lavish gifts and oil-for-food vouchers.

Tariq Aziz, the former Iraqi deputy prime minister, told the ISG that the “primary motive for French co-operation” was to secure lucrative oil deals when UN sanctions were lifted. Total, the French oil giant, had been promised exploration rights.

Iraqi intelligence officials then “targeted a number of French individuals that Iraq thought had a close relationship to French President Chirac,” it said, including two of his “counsellors” and spokesman for his re-election campaign.

They even assessed the chances for “supporting one of the candidates in an upcoming French presidential election.” Chirac is not mentioned by name.

A memo sent to Saddam dated in May last year from his intelligence corps said they met with a “French parliamentarian” who “assured Iraq that France would use its veto in the UN Security Council against any American decision to attack Iraq.”

Tony Blair, the Prime Minister, last night said again that he was wrong to suggest Saddam had WMD - but asked the British public to accept that Iraq would probably have acquired such weapons if he had not acted.

However, the ISG uncovered millions of pages of documents and, after interviewing scores of captured Iraqis - including Mr Aziz - the report lays out what it says is were plans to end the United Nations sanctions then start to acquire weapons.

Saddam, it says, even fooled his own military chiefs into believing that he had WMD. This was designed to deter uprising from rebel Iraqis, on whom he deployed mustard gas in 1988, and aggressors in the Middle East.

Speaking during his trip to Ethiopia last night, the Prime Minister referred to his speech last week where he admitted being “wrong” in the main part of his case for war but right to see a gathering threat in Iraq.

“Just as I have had to accept that the evidence now is that there were not stockpiles of actual weapons ready to be deployed, I hope others have the honesty to accept that the report also shows that sanctions weren?t working,” he said.