- The Washington Times - Thursday, December 16, 2004

A federal grand-jury investigation of pardoned financier Marc Rich’s role in the U.N. oil-for-food scandal has focused on whether he helped Iraqi dictator Saddam Hussein reward the families of Palestinian bombers who carried out suicide attacks in Israel, sources said yesterday.

Law-enforcement authorities and congressional investigators said the grand jury wants to know whether cash funneled to Saddam by oil traders — including Mr. Rich — to help arrange multimillion-dollar Iraqi oil deals for political leaders and well-heeled investors was used by the now-deposed dictator to pay the bombers’ families.

“Can we legitimately speculate that some of the blood money Saddam paid to kill people in Israel may have originated or at least been touched by Marc Rich through the United Nations’ dreadful oil-for-food program?” said a source close to the probe. “We know Saddam Hussein was getting a rake off from the U.N. program and Rich was in the middle of that.”

The grand-jury probe centers on questions of whether Mr. Rich, pardoned by President Clinton on his last day in office in a pending $48 million income-tax-evasion case, brokered millions of dollars in deals between Saddam and other traders as part of the oil-for-food scandal, the sources said.

It has focused on concerns that Mr. Rich and others made illegal payments to Iraq to obtain lucrative oil contracts in deals that were intended to circumvent U.N. sanctions against the Iraqi government and whether any of that money was used to pay the families, they said.

Last month, the House International Relations Committee cited documents confirming that Saddam diverted money from the oil-for-food program to pay millions of dollars to families of Palestinian suicide bombers who carried out the Israeli attacks.

The committee said Saddam maintained secret bank accounts in Jordan to reward the families, tapping into bribes from foreign companies and brokers involved in the oil-for-food program, which was established in 1996 to allow Iraq to trade oil for food, medicine and other humanitarian items.

But the committee said Saddam, now in U.S. custody, pocketed $21.3 billion in illegal revenue under the program, adding that Palestinians said he paid more than $35 million to families of Palestinians killed or wounded in the Israel bombings.

Since September 2000, Palestinians have carried out 117 suicide bombings, killing 494 Israelis and others.

The committee said money from illegal oil-for-food deals went to accounts held by the Jordanian branch of the Iraqi government-owned Rafidain Bank and that a former Iraqi ambassador to Jordan, Sabah Yassen, withdrew cash to make payments ranging from $15,000 to $25,000 to the families of Palestinian bombers.

“According to the information provided to this committee, Saddam paid $25,000 rewards to the families of Palestinian suicide bombers through the Iraqi ambassador to Jordan out of accounts in the Rafidain Bank in Amman, which held kickback money Saddam demanded from suppliers to his regime,” said House International Relations Committee Chairman Henry J. Hyde, Illinois Republican.

Mr. Rich fled to Switzerland and renounced his U.S. citizenship after a 1983 indictment on 65 counts of racketeering, fraud, tax evasion and illegal oil trading in a case involving the evasion of $48 million in taxes and the violation of U.S. sanctions by trading with Iran while American hostages were held in that country.

He has been unavailable for comment, but in a statement, the Marc Rich Group in Zug, Switzerland, called the accusations false, saying the company “rejects all the allegations regarding its involvement in the U.N.’s oil-for-food program for Iraq.” The statement said the firm had requested but not received any documents “proving any illegal involvement in the oil-for-food program.”

At the time of his pardon, Mr. Rich was sixth on the Justice Department’s outstanding fugitives list. Prosecutors had refused for 17 years to negotiate a settlement in the case.

In a 2001 report, the House Government Reform Committee, which investigated the last-minute Clinton pardons of Mr. Rich and a business partner, Pincus Green, said the two men had long-standing ties to Saddam, which were well known to U.S. intelligence officials. The report said the two men had done “extensive trade” with Iraq, Iran, Cuba “and other rogue states that have sponsored terrorist acts.”

The committee also said that Mr. Rich attempted to violate the U.N. embargo against Iraq during the Persian Gulf war and that U.S. officials investigated charges that he lent money to Saddam in exchange for future oil deliveries. It said he had “communications with Iraq” beginning in 1991.

The government’s 1983 tax-fraud case outlined a scheme in which Mr. Rich oversaw the diversion of more than $70 million in illegal profits to Swiss banks from the resale of crude oil. The plot was aimed at evading U.S. taxes and federal energy regulations.

The scheme continued over nine months while the illegal profits were secretly routed into Swiss banks. Records show that the profits were obtained through the purchase and later resale of $200 million of Iranian oil after President Carter had banned trade with that country.

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