- The Washington Times - Friday, October 28, 2005

NEW YORK (AP) — Texas oilman Oscar S. Wyatt Jr. pleaded not guilty yesterday to charges that he conspired to pay several million dollars in kickbacks to Saddam Hussein’s Iraqi regime to win contracts through the United Nations oil-for-food program.

The 81-year-old wealthy former chairman of Coastal Corp., who was arrested last week, entered the plea with his arm in a sling as U.S. District Judge Denny Chin set a June 20 trial date. Outside court afterward, Mr. Wyatt said he had undergone surgery on his arm. He declined to comment on the case.

One of Mr. Wyatt’s lawyers, Richard A. Hibey, said: “This is a questionable prosecution. We’ll probably be less charitable as things move along, but let’s leave it at that for now.”

Two men previously charged in the case, David B. Chalmers Jr., sole shareholder of Houston-based Bayoil (USA) Inc., and oil trader Ludmil Dionissiev, a Bulgarian citizen and permanent U.S. resident, also entered not-guilty pleas on a rewritten indictment.

All are free on bail.

Paul Shechtman, a lawyer for Mr. Chalmers, indicated he would be asking that his client be tried separately from Mr. Wyatt.

Though both are Texas oilmen, “they were competitors, not colluders,” Mr. Shechtman said.

David Howard, a lawyer for Mr. Dionissiev, said defense lawyers were eager to get records from the United Nations about the oil-for-food program.

Assistant U.S. Attorney Edward O’Callaghan said prosecutors have not yet been able to get documents from the United Nations related to the charges.

“We do not believe we have the ability to subpoena these documents,” he said. “The U.N. has kept their oil-for-food documents to themselves.”

Meanwhile, Judge Chin granted a request by prosecutors for Mr. Wyatt to get permission from the court to travel overseas and to use an Austrian passport when he enters Saudi Arabia so that he does not draw attention to himself as an American.

“I understand it’s not Saudi Arabia; it’s the Middle East in general,” the judge said of the security concern.

The oil-for-food program broke down after the United Nations let Saddam choose who could purchase Iraqi oil. By 2000, authorities said, Saddam had begun insisting that those he dealt with be willing to pay kickbacks.

In December 1996, the first allocation of oil awarded by the government of Iraq under the U.N. program went to Mr. Wyatt on behalf of Coastal Corp.

Secret payments of millions of dollars to the Iraqi government reportedly began after Coastal representatives were told by Iraqi officials in the fall of 2000 that kickbacks would be required if they were to receive any more allocations of Iraqi oil.

The indictment said Mr. Wyatt discussed his participation in the kickback scheme with an oil trader during telephone calls recorded by El Paso Corp., which purchased Coastal Corp. in 2001 for $24 billion.

If convicted of conspiracy and other charges, the three men each could face a maximum of 62 years in prison and a maximum fine of $1 million or twice the gain resulting from the offenses.

The oil-for-food program, which ran from 1996 to 2003, was created to help Iraqis cope with U.N. sanctions imposed after Saddam’s 1990 invasion of Kuwait. It let the Iraqi government sell oil primarily to buy humanitarian goods.

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