View Full Version : Oil-For-Terror

29 Apr 04,, 16:29

By Claudia Rosett
Wall Street Journal
April 28, 2004

It's looking more and more as if one of the best reasons to get rid of Saddam Hussein was that it was probably the only way to get rid of Oil-for-Food. The problem wasn't simply that this huge United Nations relief program for Iraq became a gala of graft, theft, fraud, palace-building and global influence-peddling -- though all that was quite bad enough. The picture now emerging is that under U.N. management the Oil-for-Food program, which ran from 1996-2003, served as a cover not only for Saddam's regime to cheat the Iraqi people, but to set up a vast and intricate global network of illicit finance.

And though much debate has focused on the list published this past January in the Iraqi newspaper Al Mada -- cataloguing some 270 individuals and entities world-wide alleged to have received illicit oil vouchers worth millions from Saddam -- the Al Mada list may be the least of it (apart from the last name of the executive director of the Oil-for-Food program himself, Benon Sevan). Dwarfing the Al Mada list for size, scope and menace was the U.N.-piloted mothership, the entire $111 billion U.N. Oil-for-Food program. Supplied by Iraq's oil wells, the sums involved in Oil-for-Food's transactions were so enormous that even the routine rounding errors of a few hundred million here or there easily rivaled, for example, the $300 million or so in family money believed to have given Osama bin Laden his terrorist start.

* * *
In a world beset right now by terrorist threats -- which depend on terrorist financing -- it's time to acknowledge that the U.N.'s Oil-for-Food program was worse than simply a case of grand larceny. Given Saddam's proclivities for deceit and violence, Oil-for-Food was also a menace to security. By letting Saddam pick his own business partners and draw up his own shopping lists, by keeping the details of his contracts and accounts secret, and by then failing abjectly to supervise the process, the U.N. -- through a program meant to aid the people of Iraq -- enabled Saddam to line his pockets while bankrolling his pals world-wide. In return, precisely, for what? That is a question former Federal Reserve Chairman Paul Volcker might want to keep in mind as he heads up the official investigation, finally agreed to by U.N. Secretary-General Kofi Annan, into Oil-for-Food.

In tallying various leaked lists, disturbing leads and appalling exposes to date, what becomes ever more clear is that Oil-for-Food quickly became a global maze of middlemen, shell companies, fronts and shadowy connections, all blessed by the U.N. From this labyrinth, via kickbacks on underpriced oil and overpriced goods, Saddam extracted, by conservative estimates of the General Accounting Office, at least $4.4 billion in graft, plus an additional $5.7 billion on oil smuggled out of Iraq. Meanwhile, Mr. Annan's Secretariat shrugged and rang up its $1.4 billion in Iraqi oil commissions for supervising the program. Worse, the GAO notes that anywhere from $10 billion to as much as $40 billion may have been socked away in secret by Saddam's regime. The assumption so far has been that most of the illicit money flowed back to Saddam in the form of fancy goods and illicit arms.

But no one really knows right now just how much of those billions went where -- or what portion of that kickback cash Saddam might have forwarded to whatever he deemed a worthy cause. A look at one of the secret U.N. lists of clients authorized by the U.N. to buy from Saddam is not reassuring. It includes more than 1,000 companies, scattered from Liberia to South Africa to oil-rich Russia. And though the U.N. was supposed to ensure that oil was sold to end-users at market price -- thus minimizing the graft potential for Saddam and maximizing the funds for relief -- there is an extraordinary confetti of clients in locations known less for their oil consumption than for their shell companies and financial secrecy.

Why on earth, for instance, did the U.N. authorize Saddam to sell oil to at least 65 companies in the financial lockbox of Switzerland. What was the logic behind approving as oil buyers at least 45 firms in Cyprus, seven in Panama and four in Liechtenstein? At the other extreme, would Mr. Annan care to explain why the U.N. authorized Saddam to sell oil to at least 70 companies in the petroleum-soaked United Arab Emirates?

In Oil-for-Food, "Every contract tells a story," says John Fawcett, a financial investigator with the New York law firm of Kreindler & Kreindler LLP, which has sued the financial sponsors of Sept. 11 on behalf of the victims and their families. In an interview, Mr. Fawcett and his colleague, Christine Negroni, run down the lists of Oil-for-Food authorized oil buyers and relief suppliers, pointing out likely terrorist connections. One authorized oil buyer, they note, was a remnant of the defunct global criminal bank, BCCI. Another was close to the Taliban while Osama bin Laden was on the rise in Afghanistan; a third was linked to a bank in the Bahamas involved in al Qaeda's financial network; a fourth had a close connection to one of Saddam's would-be nuclear-bomb makers.

U.N. secrecy -- in deference to the privacy of Saddam and his former clientele -- makes it extremely difficult to confirm the many whiffs of sleazy and sinister dealings in these lists. But for an example of how dirty Oil-for-Food could get, take the case of one of Saddam's U.N.-authorized relief suppliers, a company called Al Wasel & Babel General Trading LLC, set up in Dubai, in 1999. This same Al Wasel & Babel was designated by Treasury earlier this month as a front company set up by senior officials of Saddam's regime to serve as a foreign seller of goods to Saddam's regime, through Oil-for-Food (while trying to procure for Iraq a surface-to-air-missile system).

And although full information is hard to come by, partial lists leaked from the U.N. show that in 2000-2001 alone, Saddam's regime ordered up from Al Wasel and Babel more than $190 million in construction materials, trucks, cars and so on. Over Mr. Annan's and Mr. Sevan's protests, the U.S. and U.K. blocked some $45 million worth of those contracts; that still left the Saddam front company of Al Wasel & Babel with about $145 million of Oil-for-Food business for that two year period alone.

Basically, Oil-for-Food was Saddam -- just slightly harder to spot, swaddled as he was in that blue U.N. flag.

Ms. Rosett, an OpinionJournal.com columnist, is a fellow with the Foundation for the Defense of Democracies and the Hudson Institute. A related article by the author appears in the May issue of Commentary.


29 Apr 04,, 16:29
Which brings us to back to terrorist ties, and Perelman's story of June 20, 2003, for which the reporting checks out. In brief (hang on for the ride): One link ran from a U.N.-approved buyer of Saddam's oil, Galp International Trading Corp., involved near the very start of the program, to a shell company called ASAT Trust in Liechtenstein, linked to a bank in the Bahamas, Bank Al Taqwa. Both ASAT Trust and Bank Al Taqwa were designated on the U.N.'s own terror-watch list, shortly after 9/11, as entities "belonging to or affiliated with Al Qaeda." This Liechtenstein trust and Bahamian bank were linked to two closely connected terrorist financiers, Youssef Nada and Idris Ahmed Nasreddin both of whom were described in 2002 by Treasury as "part of an extensive financial network providing support to Al Qaeda and other terrorist related organizations," and both of whom appear on the U.N.'s list of individuals belonging to or affiliated with al Qaeda.

The other tie between Oil-for-Food and al Qaeda, noted by Perelman, ran through another of Saddam's handpicked, Oil-for-Food oil buyers, Swiss-based Delta Services which bought oil from Saddam in 2000 and 2001, at the height of Saddam's scam for grafting money out of Oil-for-Food by way of under-priced oil contracts. Now shut down, Delta Services was a subsidiary of a Saudi Arabian firm, Delta Oil, which had close ties to the Taliban during Osama bin Laden's heyday in Afghanistan in the late 1990s. In discussions of graft via Oil-for-Food, it has been assumed that the windfall profits were largely kicked back to Saddam, or perhaps used to sway prominent politicians and buy commercial lobbying clout. But that begs further inquiry. There was every opportunity here for Saddam not solely to pocket the plunder, but to send it along to whomever he chose once he had tapped into the appropriate networks.


30 Apr 04,, 00:51
I hope the US can get and use the proof to blackmail these Saddam supporters into fixing the problem they've helped create. As to terrorist support, I have no doubts Saddam was supporting any that would take the cash, and they'll all take the cash.

01 May 04,, 11:28
heehee what a marvellous article though. Aboslutely everythng is supposition. The second paragraph that compares rounding errors to another random sum of money ($300m for bin laden) without linking them is pure class.

There are, of course, a couple of simple things that the article overlooks. You can get linkage from any person to any other in the world by about 7 degrees of separation. Therefore it isn't good enough to say "was close to". No sane person follows that logic through with the Bush / Bin Laden "connections", for example. Or even the Bush - John Hinkly connections!

BCCI collapsed 5 years before the O4F programme started.

Why "linking" Saddam to the Taliban in the manner of this article only proves he was as bad as the west!

I agree with Confed regarding fixing the problem and welcome the investigation into the programme, but this article is just from someone who has made up their minds and is now looking for any proof they can to support their opinion. Not looking at the evidence and seeing where it goes.

01 May 04,, 14:42
It's not entirely supposition. It's right sided but it's still based on very real accusations, some more documented than others (meaning some are crap), against UN officals, foreign officials, questionable companies, and etc. There is a call to investigate the UN, but they're keeping their records closed and Kofi is calling for them to investigate themselves, the last I heard. Now, you are right, there is nothing as solid as concrete but there sure is a huge pile of circumstantial evidence. So much that I am worried the pile contains concrete as well. If none of the accusations were true, the UN would open it's oil for food records and investigate the finances of it's officials. In fact, nothing the UN has on Iraq should be their eyes only. I'm not sure it's a good idea to do the investigation in public though. If the UN's credibility is any more damaged in the US, even the left will quit caring about them.

01 May 04,, 18:13
US Government correspondence documents show connection between the Bush family and Bin Laden family.

Just a curious question. Why was the Bin Laden family allowed to leave the USA when no planes were supposed to be flyingafter 9/11?