Iraqi probed in rigging of cell-phone pacts

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An international financier with ties to Saddam Hussein's regime and the United Nations' oil-for-food program helped Middle Eastern and European cell-phone companies edge out American firms for lucrative Iraqi contracts, The Washington Times has learned.

Nadhmi Auchi, an Iraq-born British national who was involved in international arms trading, is being investigated for purportedly rigging bids with the Iraqi Communications Ministry and the Coalition Provisional Authority, which resulted in contracts being awarded to three companies tied to Europe, according to defense officials familiar with an internal investigation.

All the companies have links to Auchi, who was convicted in France last year for taking illegal payments. The contacts could be worth some $500 million annually in future cell-phone service in Iraq, said officials who discussed details ofthe investigation on the condition of anonymity.

"The winners of the Iraqi cellular tender were Saddam's most senior financiers, their Egyptian, Kuwaiti and Iraqi supporters, the bank BNP Paribas, European cellular corporations, particularly Alcatel and the European GMS technology it depends on, and Chinese telecom interests, such as Huawei, which had been active in breaking the Iraqi embargo," said a defense official.

"The losers were American bidders," the official said.

American firms that lost out in the contracting included a consortium of companies such as Qualcomm, which developed a more advanced cell-phone technology known as CDMA, and Lucent Technologies.

Auchi was convicted by a French court in November for his involvement in an illegal payment scheme involving the state-owned oil company Elf-Aquitaine. He received a 15-month suspended prison sentence and a $2.4 million fine.

He also has been linked by U.S. investigators to the United Nations' oil-for-food program, now under investigation by the world body and the U.S. Congress for skimming oil revenue meant to buy humanitarian goods in Iraq.

Auchi, 66, is viewed by U.S. officials as a key figure in the emerging scandal because of his close relationship with officials of the Saddam regime, and because most of the $65 billion involved in the eight-year program was deposited in the Paris bank BNP Paribas. Until 2001, Auchi was a major shareholder in the bank, and investigators believe as much as $10 billion from the program was stolen by Saddam and his associates.

A former Ba'ath Party member, Auchi is believed to have a net worth of about $3 billion.