So The Worm Turns - US And the Oil-For-Food Scandal

After months of flare about the scandal of the Iraq-Oil-For-Food program -a flare that was a rumored attempt to oust Annan from the UN - the Bush Administration may wish they had let well enough alone. The revelations would be humorous if it weren't so obvious. The fingers have pointed everywhere to distract and confuse.

The Russian's Did It!
Blum and Lynch at the Washington Post (5/16/05) come out with their revelations of the investigation and detail the seamy side of the Russian involvement in lining Hussein's pockets.

Top Kremlin operatives and a flamboyant Russian politician reaped millions of dollars in profits under the U.N. oil-for-food program by selling oil that Iraqi leader Saddam Hussein allowed them to buy at a deep discount, a Senate investigation has concluded.

The allegations -- which also include descriptions of kickbacks paid to Hussein -- are detailed in hundreds of pages of reports and documents made public last night by the Senate Permanent Subcommittee on Investigations in advance of a hearing tomorrow.
...
In addition, the reports allege that Russian politician Vladimir Zhirinovsky, several Russian entities and a Houston-based oil trading company, Bayoil, "paid millions of dollars in illegal, under-the-table surcharges to the Hussein regime in connection with these oil transactions." U.S. officials say Hussein used illicit proceeds from oil sales to buy weapons, among other things.

But Wait!
The Guardian reports that US 'backed illegal Iraqi oil deals':

The United States administration turned a blind eye to extensive sanctions-busting in the prewar sale of Iraqi oil, according to a new Senate investigation. ... A report released last night by Democratic staff on a Senate investigations committee presents documentary evidence that the Bush administration was made aware of illegal oil sales and kickbacks paid to the Saddam Hussein regime but did nothing to stop them.

The scale of the shipments involved dwarfs those previously alleged by the Senate committee against UN staff and European politicians like the British MP, George Galloway, and the former French minister, Charles Pasqua.

In fact, the Senate report found that US oil purchases accounted for 52% of the kickbacks paid to the regime in return for sales of cheap oil - more than the rest of the world put together.

"The United States was not only aware of Iraqi oil sales which violated UN sanctions and provided the bulk of the illicit money Saddam Hussein obtained from circumventing UN sanctions," the report said. "On occasion, the United States actually facilitated the illicit oil sales.
...
Yesterday's report makes two principal allegations against the Bush administration. Firstly, it found the US treasury failed to take action against a Texas oil company, Bayoil, which facilitated payment of "at least $37m in illegal surcharges to the Hussein regime".
...
In its second main finding, the report said the US military and the state department gave a tacit green light for shipments of nearly 8m barrels of oil bought by Jordan, a vital American ally, entirely outside the UN-monitored Oil For Food system. Jordan was permitted to buy some oil directly under strict conditions but these purchases appeared to be under the counter.

Fifty-two percent? Well, it depends on how you look at it. According to this CNN report:

"The panels seem to agree that three-quarters of the oil Iraq was permitted to export under oil-for-food ended up in the United States, though U.S. firms directly purchased less than 1 percent of the crude."

"Directly purchased" is the rub now isn't it. One must never directly engage in illegal activity. That is why you use "middlemen" and shell companies, and subsidiaries to do this sort of thing.

CNN goes on to state:

"Of the $228 million in surcharged oil, the Democratic report found the United States imported 525 million barrels, or 52 percent of it. Among the biggest end users of this oil were Valero, Premcor, Alon USA, and Exxon, according to the report.

Entangled in the weave of misdirection is a company called "Bayoil" run by David Bay Chalmers (Guardian, 5/17/05.) Chalmers was working with Samir Vincent through Tongsun Park. According to a proximity search at Namebase.org, Chalmers is directly connected to Samir Vincent, and Vincent is connected to some highly recognizable names: Brent Scowcroft, John Sununu, Richard Helms, Charles Duelfer, etc. My, with so many friends in high places, one might ask how the outrage of the oil-for-food scandal could ever have happened.

And Just To Prove That Nothing Has Changed
The US approves Iraq trade by man named as Galloway middleman

The Jordanian businessman accused of passing oil money from Saddam Hussein to George Galloway has revealed that he is once again trading in Iraq and making trips to America with the approval of the US authorities.

Articles and Resources
4/17/05 Preston et al, NY Times, Texan Is Indicted In Iraq Oil Sales By Hussein Aides ... this hopefully pulls up the whole article, if not see below)

5/17/05 CNN, British MP: Charges 'a pack of lies'

4/07/05 Gatti & Turner, Global Policy Forum, Dealing with Saddam's Regime - excellent analysis of the oil-for-food program and what went "wrong."

5/17/05 Borger & Wilson, Guardian/UK US 'backed illegal Iraqi oil deals'

5/17/05 Sengupta & Judd, Independent/UK, US approves Iraq trade by man named as Galloway middleman

5/16/05 Blum & Lynch. Wa. Post, Oil-for-Food Benefited Russians, Report Says

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4/17/05 Preston et al, NY Times, Texan Is Indicted In Iraq Oil Sales By Hussein Aides
Texan Is Indicted in Iraq Oil Sales by Hussein Aides
Correction Appended

An American oil trader and a Korean lobbyist with a scandalous past were charged yesterday in connection with illegal gains and kickbacks involving the United Nations oil-for-food program during Saddam Hussein's regime in Iraq.

In an indictment, federal authorities in New York said David Bay Chalmers Jr., a Houston oil businessman, and his company, Bayoil U.S.A., made millions of dollars in illegal kickbacks to the Iraqi government while trading oil under the $65 billion aid program.

Separate charges were brought against Tongsun Park, a millionaire South Korean businessman, for acting as an unregistered lobbyist for Iraq in behind-the-scenes negotiations in the United States to set up and shape the United Nations program. The criminal complaint said Mr. Park received at least $2 million in secret payments from Mr. Hussein's government for serving as a liaison between Iraqi and United Nations officials.

Mr. Park was at the center of a lobbying scandal in the 1970's, when he was accused of paying bribes to lawmakers in Washington to secure support for loans to South Korea.

Bayoil U.S.A. Inc. is the first American company to be indicted in the widening criminal investigations of the oil-for-food program, which was established by the United Nations in 1995 to sell Iraqi oil and use the proceeds to buy food, medicine and other goods for the Iraqi people.

The authorities not only charged that Bayoil made illegal payments to secure Iraqi oil, but also that it conspired to artificially lower the price Iraq received, depriving the Iraqi people of money for sorely needed items. The charges also disclosed new information about an alleged plan to pay senior United Nations officials to influence the course of the program.

Catherine M. Recker, a lawyer for Mr. Chalmers, said the Bayoil defendants and the company would plead not guilty and "vigorously dispute" the criminal charges.

According to federal authorities and the complaint against Mr. Park, he was a partner in the lobbying effort with Samir Vincent, an Iraqi-American businessman who pleaded guilty in January to illegal lobbying for Iraq.

Mr. Vincent, who is cooperating with federal investigators, said Iraqi officials signed agreements in 1996 to pay him and Mr. Park $15 million for their lobbying, the complaint says.

One of their tasks was "to take care of" a high-ranking United Nations official, which Mr. Vincent understood to mean to pay bribes, the complaint says. The authorities did not identify or bring charges against the United Nations official.

Mr. Park and Mr. Vincent met at least three times in 1993 with Iraqi officials and the United Nations official - twice in Manhattan and once in Geneva. They later received cash payments from Iraq for at least $2.2 million, delivered from Baghdad in diplomatic pouches. Mr. Vincent also received grants to sell at least nine million barrels of Iraqi oil, the complaint said.

David N. Kelley, the United States attorney for the Southern District of New York, in Manhattan, said the complaint alleges that Mr. Park intended to bribe the official, but does not show that the official received any bribe.

The complaint also charges that Mr. Park met with a second unnamed senior United Nations official, once in a restaurant in Manhattan. After that, Mr. Park said he invested $1 million he had been paid by Iraq in a Canadian company belonging to the son of the second United Nations official, the complaint says.

Mr. Kelley declined to say whether the officials were still actively serving at the world organization. He said, however, that the investigation was "broad and large" and that his office would "wring the towel dry" in pursuing United Nations officials.

From 1993 through 1995, as negotiations were under way to create the program, Mr. Vincent also met or spoke frequently with a former United States official who was trying to "garner support" for the oil-for-food program from administration officials in Washington, according to the complaint.

It does not name the official.
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Posted by rowan at May 17, 2005 11:42 AM | TrackBack | [eMail this article!] |