Monday, May 16, 2005

A former top aide to Russian President Vladimir Putin and a top Russian nationalist politician are among those who received lucrative oil deals from Iraqi dictator Saddam Hussein under the United Nations’ troubled oil-for-food program, according to a new report being released by a Senate investigation today.

Sen. Norm Coleman, the Minnesota Republican spearheading the Senate probe, said the payoffs to former Russian Presidential Council head Alexander Voloshin and Liberal Democratic Party head Vladimir Zhirinovsky fit the pattern that Saddam used to undermine the U.N. sanctions by bribing high officials in key Security Council countries.

“This is the way Saddam Hussein used the oil-for-food program to line his own pockets and to curry favor abroad,” Mr. Coleman said. “That’s what the evidence clearly shows.”

The Senate Homeland Security and Governmental Affairs subcommittee on investigations, which Mr. Coleman chairs, will air the charges of influence peddling at a hearing tomorrow.

The hearing is also expected to include a confrontation with British member of Parliament George Galloway, who fiercely has denied accusations by Senate investigators that he received lucrative secret benefits in return for his support of Saddam and his opposition to the U.S.-led Iraq war.

Subcommittee staffers, in a background briefing late last week, said their review of internal Iraqi documents and interviews with senior Saddam-era officials turned up no evidence that Mr. Putin had received secret oil allocations under the U.N. program.

But they said Russia, a prime opponent of the Iraq sanctions on the Security Council, had been a major target of Saddam’s lobbying, which had targeted officials in the Foreign Ministry, the Communist Party and the Unity Party, the State Duma faction closest to Mr. Putin.

The deal for Mr. Zhirinovsky, a nationalist and outspoken U.S. critic, was typical: The Senate investigators found that the party leader secretly was given the rights to 75.8 million barrels of discounted Iraqi oil from 1997 to 2002, which he could then resell to legitimate oil firms. Mr. Zhirinovsky and his party made an estimated $8.6 million on the scheme.

One unidentified Iraqi oil official, speaking to the Senate subcommittee, said, “Of course, Zhirinovsky makes a profit. That’s the whole point.”

The Senate report also details allotments totaling 90 million barrels of Iraqi oil to Alexander Voloshin, former head of the Kremlin’s Presidential Council, and his top aides including Sergey Issakov.

Mr. Voloshin was perhaps Mr. Putin’s most powerful aide before he lost his post in 2003 and was referred to by many as the “power behind the throne in Moscow.” The estimated profits to the Russian Presidential Council officials totaled nearly $3 million.

The report also tracks a change in Saddam’s efforts to subvert the U.N. program in 2000, when he began demanding a “surcharge” from those receiving the oil allocations as a way to build up his own treasury. At one point, Mr. Zhirinovsky offered the Iraqi leader the deed on a building that his party owned in Moscow to help pay his surcharge.

Tariq Aziz, Saddam’s former deputy prime minister, told the subcommittee how the influence-buying scheme worked in one instance.

In summer 2002, Mr. Aziz said, the threat of a Russian veto in the Security Council blocked a U.S. proposal to tighten border controls to strengthen the oil-for-food sanctions. Saddam told his oil ministry to “show gratitude” by increasing oil allocations to Russian interests and giving Russian companies contracts to sell food and humanitarian goods under the U.N. program.

In all, about 30 percent of Saddam’s oil deals during the oil-for-food period went to Russian applicants, even though Russia is the world’s second largest exporter of oil after Saudi Arabia.

The Russian Foreign Ministry said over the weekend that it would be “unethical” to comment on the scandal until a separate investigative panel appointed by Secretary-General Kofi Annan reports on the allocation scandal later this year.

Mikhail Troyansky, deputy chief of the Foreign Ministry’s information department, said Russia has been cooperating with that investigation, led by former U.S. Federal Reserve Chairman Paul Volcker.

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