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[casi] This is where the oil for food money was going.

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Iraq Stashed Illegal Billions Abroad, Say Bankers
Mon May 26, 2003 03:59 AM ET
By Khaled Yacoub Oweis
BAGHDAD (Reuters) - Iraq illegally stashed away billions of dollars in cash from oil deals with 
foreign firms in Lebanese and Jordanian banks and some of the money is still there, senior Iraqi 
and Arab bankers said.

The government transferred most of the cash it received from companies, including possibly Western 
firms, to Baghdad where it was feared lost in the looting that erupted after U.S.-led forces 
toppled president Saddam Hussein last month.

But Iraqi government accounts still have at least $500 million in Lebanon and significantly more in 
Jordan while other funds are now beyond recovery in private hands, said the bankers, some of whom 
represented Iraq in dealing with foreign banks.

Iraq was under United Nations sanctions for its 1990 invasion of Kuwait until they were lifted last 
week. A 1996 agreement allowed it to sell oil in exchange for food and essential supplies, not cash.

"Saddam Hussein could not run Iraq without cash," a senior Iraqi banker said. "Iraq asked foreign 
companies to give it cash on top of the goods bought under the oil for food deal. We were not 
getting a penny from selling oil."

A sanctions committee dominated by the United States and Britain paid the companies supplying 
Baghdad from the proceeds of Iraqi oil sales.


The bankers said the foreign companies that won contracts under the so-called oil-for-food program 
may have paid 10 percent of the contract value in cash to Jordanian and Lebanese accounts.

An Iraqi bank executive gave an example of a U.N.-approved $100 million contract signed by Iraq to 
buy food.

"The company that wins the contract would send Iraq food for $75 million and put another $10 
million or more in the Jordanian or Lebanese bank account. It would also make cash profit for 
itself," he said.

German, British, French and American companies may have been involved in such deals, he said.

"The accounts I know of in Lebanon are in the name of Iraqi ministries. The Iraqi government 
publicly requested the 10 percent," the banker said.

"In the best of times total Iraqi government deposits in Lebanese private banks was less than $1 
billion. Jordan had significantly more."

Jordan froze Iraq's public accounts at the start of the U.S.-led war but a Jordanian banker said 
Iraq relied on individuals and companies to receive the cash.

"The chaos of the war means that cash belonging to Iraq ended in private hands and could never be 
traced," he said.

Iraqi bankers said the Iraqi government stepped up withdrawals from Lebanon and Jordan after the 
United States pressed the two countries to crack down on money laundering last year.

The bankers said Saddam's son Qusay did not steal money from the central bank before the war as 
some media reports suggested.

They said Iraq's finance minister and officials of the now ousted Ba'ath party, acting on Saddam's 
orders, moved around $1 billion and an unknown amount of gold from the central bank just before the 
U.S.-led invasion began on March 20.

They stashed the money away for safekeeping in and around Baghdad, including at least $400 million 
in two government bank branches that were looted.

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