Tuesday, October 5, 2004

Congressional investigators have uncovered new information showing how Saddam Hussein’s government systematically purchased military-related goods for the seven years of the U.N. oil-for-food program.

According to officials involved in ongoing probes, motorcycles bought by Saddam under the United Nations’ food program were used by the Fedayeen to attack U.S. forces in Iraq.

“Trucks, pickups, motorcycles and other equipment purchased by Iraqi ministries were pooled and then sent to the Defense Ministry,” one official said. “They ordered motorcycles that were used by Fedayeen against us.”

The black-hooded guerrillas under Saddam waged commando-type attacks on advancing U.S. troops in spring 2003.

Investigators from the staff of the House International Relations Committee disclosed details of their probe, one of several being carried out by Congress, including new details on Saddam’s bribes to U.N. officials and officials of foreign governments.

A second investigation, led by Rep. Christopher Shays, Connecticut Republican and chairman of the Government Reform subcommittee on national security, emerging threats and international relations, has found that Saddam ran the Iraqi side of the food program as a “cash cow” that let him buy weapons with some of the $10 billion he siphoned off, according to a report by the investigators.

Mr. Shays’ panel is scheduled to hold a hearing on the report today.

The governments of Russia, France and China also blocked U.S. efforts within the United Nations to stop abuse of the program, which was designed to get food and medicine to Iraqis through limited sales of oil.

“As the program developed, it became increasingly apparent the French, Russians, and Chinese had much to gain from maintaining the status quo,” a staff subcommittee memorandum states.

The Shays investigation also concluded that the U.N. officials, including executive director Benon Sevan, also abused the oil-for-food program.

Mr. Sevan was identified in Iraqi Oil Ministry documents as having participated in a scheme by Saddam to issue vouchers to people that let them profit from illicit sales of Iraqi oil. Mr. Sevan has denied accusations that he profited from the program.

The report makes another charge of corruption, about nepotism involving Kojo Annan, the son of U.N. Secretary-General Kofi Annan and a former employee of the Swiss-based company Cotecna.

The report stated that Cotecna, which the United Nations hired to monitor goods entering Iraq under the oil-for-food program, “was guilty of a wide variety of abuses,” including overcharging the United Nations and failing to inspect goods entering Iraq.

A U.N. audit revealed that up to $111 million was missing as a result of Cotecna’s work in northern Iraq, the report said.

Investigators for Rep. Henry J. Hyde, Illinois Republican and chairman of the International Relations Committee, said their panel’s probe has uncovered lists of companies favored by Saddam that profited from the illicit oil and humanitarian goods trade.

The panel also uncovered blacklists of firms that were denied lucrative contracts because of suspected links to Israel or because they refused to go along with corruption.

The Hyde investigators said there are signs that Saddam’s government used money obtained under the U.N. program to buy arms from Russia and Belarus or on the international black market through middlemen in Jordan and Syria.

The Iraqis obtained cash for Saddam or his agents by adding surcharges of between 5 percent and 15 percent to sales of Iraqi oil permitted by the U.N. program.

“This program was flawed from the start,” one official said. “It granted Saddam so much autonomy in picking winners and losers — who got oil contracts, who got humanitarian contracts.”

The investigators think that Saddam made about $4 billion through smuggling oil and about $6 billion in corruption related to contracts. The $10 billion estimate is considered a conservative one, the officials said.

The United Nations is conducting its own oil-for-food corruption probe, led by former Federal Reserve Chairman Paul Volcker.

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