The following is an archived copy of a message sent to a Discussion List run by the Campaign Against Sanctions on Iraq.

Views expressed in this archived message are those of the author, not of the Campaign Against Sanctions on Iraq.

[Main archive index/search] [List information] [Campaign Against Sanctions on Iraq Homepage]

[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

The Times: "West finds evidence of Iraqi fraud"

Despite the damning headline, the following from the Times of London[1]
offers little that's new and little of substance*.  And one might add:
oil-for-food would be a rare multi-billion dollar international project,
indeed, if it were totally corruption-free.  

The timing of this story -- which credits Western diplomatic sources -- is
interesting, coming on the heels of State Department leaks to the Washington
Post (last week's story on 'breaking through the shell' of the Security
Council deadlock) and the New York Times (Russia's reported offer to trade
its Iraq support for U.S. silence on Chechnya).  There appears to be a
concerted effort to stampede the P5 into accepting continuation of

By way of financial context, I've also attached an AFP report[2] which
details the OFF money trail.

Drew Hamre
Golden Valley, MN USA

---[1] <*Note: Following is the web version of this story in its entirety.
If the print version was more substantive, could someone please post?>

November 22 1999  MIDDLE EAST 

West finds evidence of Iraqi fraud
IRAQ'S President Saddam Hussein is believed to be skimming off hundreds of
thousands of pounds a day from the United Nations "oil-for-food" scheme and
using the cash to cement his grip on power (James Bone and Michael
Theodoulou write). 
The alleged fraud has been reported by Western envoys and oil experts. "We
have some intelligence on some of it - that there is a lot of it going on,"
a senior Western diplomat said. The US has gone so far as to block UN
approval of a number of contracts to sell humanitarian goods to Iraq. 

"We have trouble with some companies paying percentages to government
officials in Iraq," Peter Burleigh, Deputy US Ambassador to the UN, said.
"We go back to those countries in which these companies function and tell
them what our problem is." 

With the price of oil rising rapidly, the five permanent members of the
Security Council are now discussing an entirely new oversight system. 


Thursday, November 18 8:43 AM SGT 

UN worried about unspent Iraqi oil revenues in one French bank
The United Nations expressed concern on Wednesday that five billion dollars
in unspent revenue from Iraq's UN-controlled oil sales had accumulated in
one French bank, BNP-Paribas.

"The over-concentration of funds at BNP-Paribas poses a serious investment
risk," under secretary general for management Joseph Connor said in a letter
to the UN Security Council's sanctions committee on Iraq.

"For operational as well as credit reasons, this is an unacceptable
exposure," he added.

The letter was addressed to Dutch ambassador Peter van Walsum, who heads the
sanctions committee.

A member of the Security Council made it available to AFP.

The Council imposed comprehensive sanctions on Iraq on August 6, 1990, four
days after it invaded Kuwait. 

Since December 1996 it has allowed Iraq to sell limited amounts of oil to
pay for imports of badly needed food and medicine.

None of the revenue from the oil sales is allowed to pass through Iraqi
government hands.

Instead, it is paid into an escrow account at BNP-Paribas, which is paid a
fee for operating the account. 

About two-thirds of the revenue may be spent on humanitarian imports
approved by the sanctions committee. Thirty percent goes to a compensation
fund for Kuwaiti victims of the 1990-91 Gulf war and the remainder covers
the cost of administering the oil-for-food programme and the arms inspection
team (UNSCOM), which left Iraq in December.

In his letter, Connor wrote that "as of November 11, 1999, the balance in
the United Nations Iraq account at BNP-Paribas passed the five billion
dollar level."

The director of the oil-for-food programme, Benon Sevan, told the Security
Council on Wednesday that a total 1.042 billion dollars of import contracts
had been placed on hold by the sanctions committee.

Diplomats said part of the other four billion dollars was money that had not
yet been transferred to the compensation fund or for imports that had been
approved but not delivered.

The rest, they said, was money that Iraq had not yet applied to spend.

Diplomats said that the interest would go back into the escrow account, not
to BNP-Paribas.

So far, 188 million dollars interest has accrued since the start of the
oil-for-food programme in December 1996, they said.

Connor recalled that the auditors had previously recommended
"diversification of the investment portfolio."

Diplomats said that UN Secretary General Kofi Annan had suggested "at least
twice" to the Iraqi government that some of the oil revenues might be
channeled through Swedish or Dutch banks, but did not identify the banks.
The UN secretary general and the Iraqi government originally agreed to have
BNP-Paribas hold the escrow account.

This is a discussion list run by the Campaign Against Sanctions on Iraq.
To be removed/added, email, NOT
the whole list. Please do not send emails with attached files to the list
*** Archived at ***

[Campaign Against Sanctions on Iraq Homepage]