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[ This message has been sent to you via the CASI-analysis mailing list ] Everyone, Ahmed Chalabi's plummeting fortunes were in evidence during the U.S. political talk shows this Sunday morning. Fox News followed a Chalabi appearance by interviewing a Republican Congressman who said Chalabi was a big part of our Iraq problem and was not to be trusted. (Again: Fox News. Republican Congressman.) Because Chalabi is fighting for his political life, many see Chalabi as a player in the Oil for Food 'scandal'. At issue is the prominence of the UN role in postwar Iraq: the stronger the UN's responsibility, the less leverage is maintained by Chalabi. If the UN's role is diminished, Chalabi benefits. Chalabi's associates control many of the documents purporting to detail corruption, and investigator Claude Hankes-Drielsma is a close associate of Chalabi (links below). Separately, there are these threads to watch:  The GAO is investigating the Chalabi-led Iraqi National Congress for use of taxpayer funds when lobbying for war. Note that Francis Brooke (cited in the story below) is a former principal of The Rendon Group.  White House disaffection from Chalabi is detailed in a major WashPost story that ran yesterday (subhead: "Chalabi and Others Coalition Relied on May Be Left Out"). [3,4] Chalabi's ties to the UN-OFF investigations are noted by the Post and LATimes.  There are indications the U.S. fears where an OFF investigation might lead. Those of us in CASI have argued for years that sanctions (and the inadequacies of Oil for Food) are a major scandal FOR HUMANITARIAN REASONS. Handwaving over Oil for Food's accounting practices will ring hollow until sanctions' 500,000 excess deaths become central to the story. So here's my Oil for Food scandal fantasy: Shiite Ahmed Chalabi (realizing that all bridges to Washington are burning and that his neocon constituency is marginalized), seeks to re-position himself as a champion of the Iraqi people. He uses UNICEF data and Iraqi Health Ministry documentation to detail the damage done by sanctions to Iraq. Chalabi (whose associates control the Hussein trial proceedings) uses this bully pulpit to publicize sanctions consequences before the world, detailing the damaging manipulations of both Hussein and the U.S. Chalabi sues for 150-billion reparations in international courts (the approximate amount removed from Iraq's economy during the nineties), and threatens to sue for multiple trillions (while quietly negotiating for debt relief). Grand Ayotollah Ali al-Sistani (whose core constituency suffered most under sanctions) joins in the call to investigate, as do Adnan Pachachi and other prominent Sunnis, and all three major Kurdish parties. Benefits: a more unified, prosperous Iraq, with some damage done to the guilty. I'm not holding my breath, but ... Regards, Drew Hamre Golden Valley, MN USA ===  http://www.miami.com/mld/miamiherald/news/world/8499845.htm?1c Posted on Fri, Apr. 23, 2004 Iraqi exiles may have misused U.S. funds A leading Iraqi exile group that helped make the case for overthrowing Saddam Hussein may have violated rules barring it from lobbying. BY WARREN P. STROBEL AND JONATHAN S. LANDAY email@example.com WASHINGTON - An Iraqi exile group may have violated restrictions against using taxpayer funds to lobby when it campaigned for U.S. action to oust Saddam Hussein, according to documents and U.S. officials with direct knowledge of the matter. If the accusation -- which is the subject of an upcoming probe by Congress' General Accounting Office -- is borne out, it means that U.S. taxpayers paid to have themselves persuaded that it was necessary to invade Iraq. Officials of the Iraqi National Congress, which played a central role in building support for last year's invasion of Iraq, deny the group crossed the line prohibiting lobbying or that it broke any other rules. But officials at the State Department, which managed the INC's U.S. government grant, said they believe it did, despite what a senior official said were repeated warnings to the group to avoid lobbying ``or even the appearance of same.'' The officials spoke on condition of anonymity because the government's dealings with the INC, a favorite of some Pentagon officials and advisors, remain highly controversial. State Department officials, along with many intelligence officers, have been longtime critics of the group and want to minimize the group's role in post-Hussein Iraq. Federal law prohibits the use of U.S. government funds for lobbying on financial matters such as government contracts. A grant agreement between the INC and the State Department prohibited lobbying and propagandizing. In this case, individuals who held senior positions with the INC set up a nonprofit group to lobby for U.S. action in Iraq. The group, composed largely of Iraqi Americans, relied on private funds and wasn't subject to the same lobbying restrictions. Even so, the formation of the group surprised and angered U.S. government officials, some of whom suspected it was an attempt to sidestep the lobbying restrictions. STATED GOALS The incorporation papers of the spinoff group, the Iraq Liberation Action Committee, say it was founded ''to work in support of United States and international efforts to remove the regime headed by Saddam Hussein from power in Iraq'' and to help in ''drafting resolutions, legislation and regulations'' to advance democracy there. The group's principal founder was Francis Brooke, the INC's Washington representative, according to the corporate documents obtained by Knight Ridder. Brooke, in a telephone interview, acknowledged a ''professional relationship'' with the lobby group. But he said there was ``no crossover between that and anything else.'' Two senators, presumptive Democratic presidential nominee Sen. John Kerry, D-Mass., and Sen. Carl Levin, D-Mich., asked the General Accounting Office, Congress' investigative arm, to determine whether the INC violated lobbying rules. INQUIRY REQUESTED In a March 3 letter, the senators asked the GAO to determine whether taxpayer funds were used to arrange meetings between Iraqi defectors and journalists, to influence Congress regarding funding or legislation, or to propagandize the American public. Their request was first reported by Newsweek magazine. Kerry, who voted in favor of an October 2002 resolution to authorize the Iraq war, and Levin, who voted against, cited a State Department funding agreement with the INC. ''The functions of the INC office and personnel in the U.S. will strictly exclude any business associated with, or that could appear to be associated with, attempting to influence the policies of the United States Government or Congress, or propagandizing the American people,'' that agreement said. A GAO official said the agency would look into the matter to see whether a full-scale review is warranted. The role of outside groups and advisors in the decision to invade Iraq and in postwar planning has come under growing scrutiny since it was revealed that much of the intelligence on Hussein's weapons programs and terrorist ties that President Bush relied on was inaccurate or fabricated. Some crucial pieces of intelligence found to be bogus were supplied by Iraqi defectors made available by the INC and other groups. $18 MILLION The INC, an umbrella group for anti-Hussein Iraqi exiles, received at least $18 million in U.S. funds between 1998 and 2003, according to a January report by the Congressional Research Service. Its leader, Ahmad Chalabi, is a member of the Iraqi Governing Council in Baghdad and has been pushed by some Pentagon and White House officials as Iraq's next leader. ===  http://www.washingtonpost.com/ac2/wp-dyn/A37921-2004Apr23?language=printer U.S., U.N. Seek New Leaders For Iraq Chalabi and Others Coalition Relied on May Be Left Out By Robin Wright and Walter Pincus Washington Post Staff Writers Saturday, April 24, 2004; Page A01 The United States and the top U.N. envoy to Iraq have decided to exclude the majority of the Iraqi politicians the U.S.-led coalition has relied on over the past year when they select an Iraqi government to assume power on June 30, U.S. and U.N. officials said yesterday. The latest shift in policy comes as the U.S.-led coalition has to resolve some contentious and long-standing issues before the transfer takes place. Earlier this week, the coalition moved to allow former Baath Party members and military officers to return to government jobs. At the top of the list of those likely to be jettisoned is Ahmed Chalabi, a Shiite politician who for years was a favorite of the Pentagon and the office of Vice President Cheney, and who was once expected to assume a powerful role after the ouster of Saddam Hussein, U.S. officials acknowledged. Chalabi has increasingly alienated the Bush administration, including President Bush, in recent months, U.S. officials said. He generated anger in Washington yesterday when he said a new U.S. plan to allow some former officials of Hussein's ruling Baath Party and military to return to office is the equivalent of returning Nazis to power in Germany after World War II. Chalabi has headed the committee in charge of removing former Baathist officials. In a nationwide address yesterday designed to promote national reconciliation, U.S. administrator L. Paul Bremer said complaints that the program is "unevenly and unjustly" administered are "legitimate" and that the overall program has been "poorly implemented." That criticism may curtail Chalabi's influence over the removal of former officials -- and his power over the employment and income prospects of hundreds of thousands of Iraqis. Washington is also seriously considering cutting off the $340,000 monthly stipend to Chalabi's party, the Iraqi National Congress, according to a senior administration official familiar with the discussions. This would be a major change, because the INC has received millions of dollars in U.S. aid over the past decade as the primary vehicle for supporting the Iraqi opposition. Chalabi is part of a wider problem, however. Polls indicate that most of the 25 members of the Iraqi Governing Council have little public support nine months after they were appointed. The lack of popular backing is the main reason the United States and United Nations are seeking a new body to govern Iraq before national elections are held in January 2005, U.S. and U.N. officials said. U.N. envoy Lakhdar Brahimi, who is in charge of picking the new government in consultation with the U.S.-led coalition, made clear yesterday that the council should disband. "They have said twice, not once, in official documents they signed, that our term will end on the 30th of June," he said in an interview on ABC's "This Week With George Stephanopoulos" to be aired Sunday. "All opinion polls, and a lot are taken in Iraq, say that people want something different" than expansion of the council because they fear council members "will clone themselves. And why do you want to have that?" Brahimi asked. U.S. and U.N. officials generally fear that the continued involvement of too many council members will contaminate efforts to create a credible Iraqi government, they said. Under a new U.N. proposal, Brahimi is expected to return to Baghdad around May 1 to finish discussions and then select Iraqis for 29 positions -- a prime minister to head the government, a ceremonial president and two vice presidents, plus 25 cabinet officers, U.S. officials said. In his most specific language to date, Brahimi told ABC that these positions should be filled by "mainly technocrats" who are "widely representative" of Iraq's diverse ethnic and religious communities. Rather than excluding Chalabi or any other Governing Council member by name from the new government, he said that "people who have political parties and are leaders of their parties should get ready to win the election . . . and stay out of the interim government." Some council members might be retained, but more likely in cabinet posts rather than in the top four jobs, U.S. officials said. Others could be tapped to participate in a national consultative assembly, which Brahimi has proposed should advise the provisional government. All council members will then be free to test their political appeal in the January elections to see how they would fare without U.S. support, U.S. officials added. With only nine weeks left until the handover, the United Nations, the coalition and Iraqis are scrambling to come up with lists of candidates for the top jobs, which Brahimi will compare when he returns to Iraq, U.S. officials said. But the political battles are not yet over, U.S. and U.N. officials warned. Chalabi, who went into exile in 1958, is still pressing for the council to be retained in some form; he also has been a leading critic of Brahimi, a Sunni Muslim and former Algerian foreign minister, and his proposals for Iraq. Acknowledging that Chalabi has challenged him as biased against the Shiites, Brahimi said any such suggestion is "silly." Without referring to Chalabi, he said those who are "sniping" against him on the religious issue "have agendas that have nothing to do with the fact that I am a Sunni." But he said opponents of his new plan for Iraq's transition "may very well succeed in derailing what we are trying to do. But I think if they succeed, it will not be very good for Iraq or for the international community." ===  http://www.washingtonpost.com/ac2/wp-dyn/A6215-2004Mar18?language=printer GAO: Iraq Oil Program Profits Understated Investigation Finds $10.1 Billion Earned Illegally Under Hussein's Government By Colum Lynch Washington Post Staff Writer Friday, March 19, 2004; Page A16 The former Iraqi government of Saddam Hussein pocketed more than $10.1 billion in smuggled oil revenue and illicit proceeds from a U.N.-run humanitarian program between 1997 and 2002, $3.5 billion more than previously estimated, according to testimony by the U.S. General Accounting Office yesterday. The latest GAO figures, presented to the House subcommittee on oversight and investigations, have come to light as a result of a global investigation by the Iraqi Assets Working Group, according to two GAO officials, Joseph A. Christoff and Davi M. D'Agostino, who testified yesterday. The interagency body, headed by the Department of Treasury, is seeking to locate and seize $10 billion to $40 billion in estimated hidden Iraqi assets that can be used to rebuild the country. To date, $2 billion in seized Iraqi assets, including $750,000 in cash found with Hussein, has been channeled into Iraq's recovery. The GAO charged that Iraq's ruling elites acquired $5.7 billion from the proceeds of oil smuggled through Syria, Jordan, Turkey and the Persian Gulf region. They raised an additional $4.4 billion in illegal revenue through the imposition of oil surcharges and commissions from suppliers. "According to some Security Council members, the surcharge was up to 50 cents per barrel of oil and the commission was up to 5 to 10 percent of the commodity contract," the GAO stated. "The funds were paid directly to officials connected with the Iraqi government." The GAO testimony came as the United Nations announced that it is seeking to expand an investigation into allegations of corruption by U.N. officials who managed the former program, known as Oil for Food. U.N. Secretary General Kofi Annan has said he has seen no evidence of wrongdoing by U.N. officials, but he has ordered a preliminary investigation by the agency's internal watchdog, the Office for Internal Oversight Services (OIOS). The charges stem from a January report in a Baghdad newspaper that scores of prominent foreign dignitaries, including the head of the U.N. program, Benon Sevan, allegedly received vouchers to purchase large quantities of oil for less than market value. U.N. critics alleged that the recipients of the vouchers would sell them to middlemen who would resell the oil to a refinery. The Wall Street Journal's editorial page and an adviser to the Iraqi Governing Council, British businessman Claude Hankes-Drielsma, have leveled additional charges and pressed for an independent investigation. Sevan has denied the charges through a U.N. spokesman, and Annan has voiced confidence in the innocence of the longtime U.N. diplomat. But in response to the allegations, Annan's office has approached members of the Security Council to explore broadening the investigation and passing a Security Council resolution requiring states to cooperate. "We are in the process of turning over to the OIOS all the oil-for-food records, that's 60 to 80 boxes," U.N. spokesman Fred Eckhard said in an interview yesterday. "But the secretary general feels that to get a full picture of what went on with oil for food, we would have to look at the whole picture and not just Benon Sevan." Chile's U.N. ambassador, Heraldo Munoz, discussed the issue yesterday with a senior U.N. aide and said Annan is pressing for the appointment of a review panel or a private accounting firm to conduct an independent audit of the oil-for-food program. "Since an internal audit would be seen as insufficient, the idea of an external investigator sounds not only reasonable but the most adequate," Munoz said in an interview. The United States, France and other key Security Council members have yet to sign on to a broader independent inquiry that could question their oversight of the program or investigate their national companies. Senior U.N. officials say they have not ruled out the possibility of corruption within their ranks, but they have expressed suspicion that the organization is being unfairly targeted by Iraqi critics when the United Nations is mending its relationship with the Bush administration and preparing for an expanded role in Iraq. Critics include U.S. conservatives and Ahmed Chalabi, the fiercest critic of the United Nations within the Iraqi Governing Council and a close associate of Hankes-Drielsma's. The Security Council established the oil-for-food program in December 1996 to allow Iraq to sell oil to purchase food, medicine and other humanitarian goods. According to the GAO, Iraq sold more than $67 billion worth of oil before the program was shut down. The program's proceeds were transferred to an Iraqi account controlled by the United States and its military allies. ===  http://www.latimes.com/news/nationworld/world/la-fg-oilprobe22apr22,1,3239179.story U.N. Council Backs Probe of 'Oil-for-Food' Panel will look into accusations that officials and firms mishandled the Iraq humanitarian program for profit. By Maggie Farley Times Staff Writer April 22, 2004 UNITED NATIONS — The Security Council unanimously endorsed an independent investigation Wednesday into charges that U.N. officials mishandled the Iraqi "oil-for-food" program, allowing Saddam Hussein to illegally pocket billions of dollars. Former U.S. Federal Reserve Chairman Paul Volcker, named as chairman of the three-person investigative panel, insisted on securing the Security Council's formal support before launching his inquiry, saying it was important to "make sure that member states knew what they were getting into." The resolution requires all U.N. member states "to cooperate fully" with the inquiry. The U.N. oil-for-food program was established in 1996 to allow Iraq — then under U.N. sanctions for its 1990 invasion of Kuwait — to sell oil and use the revenue to buy humanitarian goods. Oil sales outside the program were prohibited. The 15-member Security Council set the terms for the program. Allegations of corruption emerged in January in the Iraqi newspaper Al Mada, which published a list of 270 dignitaries, officials and journalists from 46 countries who allegedly received vouchers from Hussein's regime to buy millions of barrels of oil at a discount. The coupons allegedly were resold at market value to oil refinery middlemen. Among those named by the paper was Benon Sevan, the U.N. official who ran the program. He has denied wrongdoing. A handful of others on the list have confirmed that they received rights to Iraqi oil, which they could sell for a profit, but most have denied any involvement. About a quarter of the names on the list are companies or officials related to Russian interests. Documents that appear to detail kickbacks also have been distributed by Claude Hankes-Drielsma, an advisor to Ahmad Chalabi, a member of the U.S.-backed Iraqi Governing Council and former exile leader long critical of the United Nations. The General Accounting Office, the investigative agency of the U.S. Congress, has said Hussein's government illegally obtained more than $10 billion through the oil-for-food program. U.N. Secretary-General Kofi Annan announced last month that he was launching an inquiry into the corruption allegations, but Security Council endorsement of the probe was initially resisted by Russia. Moscow relented after Annan called Foreign Minister Sergei V. Lavrov, who until last month was Russia's ambassador to the U.N. "I want to get to the truth and I want to get to the bottom of this," Annan said Wednesday. The allegations of fraud and mismanagement come at a sensitive time for the United Nations, tarnishing its image just as Washington is asking the world body to guide the selection of the transitional government in Iraq and help prepare elections there. Even before the accusations of corruption in the oil-for-food program arose, many Iraqis had a negative view of the United Nations, blaming it for shortages of critical goods during the period of sanctions. Annan said that whatever the outcome of the inquiry, he hoped that the U.N.'s history of helping people in Iraq would not be overlooked. "I hope the Iraqis realize that even if there have been wrongdoings by certain members on the U.N. staff, the U.N. … did make a genuine effort to fill their humanitarian needs," he said. Annan said he selected the independent panel of highly regarded experts to untangle the many threads of national, political and personal interests complicating the issue. Besides Volcker, the panel includes Balkan war crimes prosecutor Richard Goldstone of South Africa and Mark Pieth, a Swiss criminal law professor with expertise in money laundering. It will start its work immediately. At a news conference Wednesday, Volcker said: "I didn't agree to do this lightly, but I think there are very important accusations made about the U.N., accusations about the administration of the program, and accusations about activities outside the U.N., which need to be resolved. "There's always some damage in the accusations, but what seems to be important is finding out whether there is any substance to those," he added. "If there is substance to them, get it out there, get it out in a hurry and cauterize the wound." ===  http://www.capitolhillblue.com/artman/publish/printer_4366.shtml Bush Leagues Bush Conceals Names of U.S. Firms That Paid Kickbacks to Saddam By LAWRENCE M. O'ROURKE McClatchy Newspapers Apr 8, 2004, 06:41 Saddam Hussein siphoned off $10.1 billion from Iraq's oil-for-food program through illegal oil contracts and kickback deals with private suppliers of food and medicine, a congressional agency said Wednesday. John Negroponte, U.S. ambassador to the United Nations, told the Senate Foreign Relations Committee that the Bush administration can identify the private business firms that cut kickback deals with Saddam Hussein, but intends to keep the names secret. Sens. Richard Lugar, R-Ind., and Joseph Biden, D-Del., urged Negroponte to make the names public so that the United States can prevent shakedowns by the new Iraqi government scheduled to assume power on June 30. "This corruption was not solely a product of Saddam Hussein's machinations," Lugar said. "He required members of the U.N. Security Council who were willing to be complicit in his actions, and he required U.N. officials and contractors who were dishonest, inattentive, or willing to make damaging compromises in pursuit of a compassionate mission." Patrick Kennedy, a U.S. official working on United Nations management reform, said Saddam's regime "was very clever at adding tiny amounts to contracts to provide kickbacks and additional revenue. They added a little bit to a lot and made it up in volume." Negroponte said efforts by the United States to halt the kickback schemes were blocked by Russia, France and China. He said it has been difficult to document the corruption because much of the paperwork was destroyed during the U.S.-led invasion of Iraq last year and its aftermath. Biden warned that corrupt Iraqi politicians could steal large sums from the billions of dollars President Bush wants to spend on the reconstruction and establishment of democracy in Iraq. Robin Raphel, coordinator of the U.S. office of Iraq reconstruction at the State Department, said the United States has reason to be concerned that the next Iraqi government will engage in the same corrupt practices as Saddam Hussein. She said U.S. officials will try to block the kickbacks while serving as technical advisers to the new Iraqi government agencies. "There is no doubt that billions of dollars that should have been spent on humanitarian needs in Iraq were siphoned off by Saddam Hussein's regime through a system of surcharges, bribes, and kickbacks," Lugar said. Lugar said a "portion of those illicit funds" might be supporting the Iraqis fighting the U.S.-led coalition in Iraq. Sen. Christopher Dodd, D-Conn., said that 72 percent of the $63 billion revenue from legal sales of Iraqi oil was spent on food and medicine that "saved the Iraqi people from a human tragedy." U.S. officials said that $7 billion was taken from the oil fund to pay for Iraq's postwar reconstruction. In a new report, the congressional General Accounting Office estimated that Saddam's regime from 1997 through 2002 acquired $10.1 billion illegally through the sale of $5.7 billion in oil smuggled to Syria, Turkey and Jordan, and $4.4 billion through kickbacks paid by firms selling food, medicine and other goods to Iraq. The GAO's estimate of $10.1 billion was $3.5 billion higher than its estimate in 2002 as the Bush administration accused Iraq of violating United Nations sanctions imposed in 1990 after Iraq invaded Kuwait. Joseph Christoff, the GAO director for international affairs and trade, said the pattern of corruption "raises concerns about the Iraqi government's ability to manage the oil-for-food commodities and about $32 billion in expected donor reconstruction funds." _______________________________________ Sent via the CASI-analysis mailing list To unsubscribe, visit http://lists.casi.org.uk/mailman/listinfo/casi-analysis All postings are archived on CASI's website at http://www.casi.org.uk