Wednesday, September 22,
From the looks of it now, it's hard to believe Iraq
once had a first-class health care system.
"It was one of the best in all of the Middle East," said
Dr. Haqqi Razouki, director of Baghdad's Al-Yarmouk
Hospital. "But following the first Gulf War the things
started to go downhill."
The declining health care system turned up the pressure
at the United Nations to dump the sanctions. The United
States and the United Kingdom balked but agreed to ease the
sanctions with the Oil-for-Food program, created in late
1996 to allow Iraq to sell oil under strict conditions.
Iraq remained a member of OPEC during Oil-for-Food but
the United Nations would in effect take over the Iraqi
economy — overseeing the sale of oil, depositing the profits
in an escrow account, and ensuring the money bought only
food, medicine and other humanitarian supplies for the Iraqi
Saddam was never supposed to see a dinar or a dollar. But
in Iraq, the people knew better.
"Their suffering increased, their mortality increased,"
said Dr. Khudair Abbas, Iraq's health minister after
Operation Iraqi Freedom, the second Gulf War in 2003 that
succeeded in ousting Saddam from power. "Everybody knew that
the Oil-for-Food, it was an embargo on the ordinary Iraqi
people … Saddam's regime was not touched."
Not touched because the United Nations largely let Saddam
call the shots, said Claudia Rosett, a journalist in
residence for the Foundation for the Defense of Democracies
and a FOX News contributor working on Oil-for-Food stories.
"Saddam got to pick his own business partners. He could
decide who he sold oil to, who he bought relief goods from,
he drew up the shopping list for the people of Iraq," Rosett
"This was a program so perverse that if they had set out
to create a crooked scheme, I can't think how they could
have done it better," she said.
Because the United Nations kept them secret,
investigators are just learning about some of Saddam's new
trading partners. Many were based in Switzerland,
Liechtenstein, the Bahamas – countries known for being
secret financial havens.
Others were front companies controlled by Saddam himself,
and, still others may have even more sinister connections.
Though Saddam was supposed to sell his oil at market
price, he offered deep discounts. That way, when his
handpicked buyers resold it at market, they reaped a
windfall, which they split with Saddam. Saddam skimmed 30 to
50 cents on every barrel of oil.
"That money went into secret, illicit bank accounts
outside Iraq, and bingo: Saddam had access to money outside
the country in spite of sanctions," Rosett said.
Saddam, reportedly, was soon also handing out
Oil-for-Food "vouchers" to all sorts of friends of his
The vouchers entitled the holder to buy huge amounts of
Iraqi oil — a million barrels or more at a discount, sources
told FOX. The situation was seen as a perfect vehicle for
Saddam to hand out bribes.
Even if someone wasn't in the oil business, it was easy
to convert such vouchers into hundreds of thousand of
Word is someone only needed to stop by Baghdad's Al
In the Saddam Hussein era, the hotel was the main stop on
the Oil-for-Food tour. Regime-friendly types would stay
there when visiting Baghdad. They'd stop and say hello to
Saddam or a crony, snag a voucher good for a load of Iraqi
crude and conveniently enough there were oil traders in the
lobby of that hotel who could turn those vouchers into cash.
Just who got these vouchers was secret, as was another
alleged Saddam scam to hit up the "aid" suppliers for
kickbacks. Saddam purposely overpaid for supplies, allowing
venders to collect extra profits and to kick back, say, a 10
percent so-called "service charge."
Although the United States put an end to Saddam's
oil-pricing scam in 2001, aid suppliers paid those illegal
surcharges until the end, and the U.S. Government
Accountability Office estimates Saddam pocketed at
least $4.4 billion in kickbacks.
The GAO also found that Oil-for-Food let Saddam pocket an
additional $5.7 billion from oil smuggling — for a grand
total of at least $10.1 billion in illegal revenues.
Supporters of Oil-for-Food said even if that's true,
Iraqi people still received — by a U.N. estimate — $15
billion in aid from a total of $67 billion in oil sales.
Benon Sevan, the head of the U.N. Oil-for-Food program,
spoke to FOX News about the program in November 2002.
"Just over five years, since the start of the
implementation of the program, we have been able to almost
double the food baskets," Sevan said then. This year, Sevan
has refused to discuss Oil-for-Food with FOX because of
investigations into the program's management.
There is no doubt that Oil-for-Food did some good — but
maybe significantly less than its proponents think because
it now appears some of those supplies were unusable. That's
because Saddam also generated kickbacks by allowing vendors
to fill their orders with worthless goods or incomplete
"This is a sickening problem," said Dr. Abdul Wadood Al-Talibi,
an Iraqi health official, who showed FOX equipment for a new
hospital that never got installed.
"The U.N., they are telling me that they don't know. I
don't buy that," Al-Talibi said. "When it comes to the
millions of Iraqi money, and they don't know? God forgive
Al-Talibi said, "God forgive them" because the United
Nations was paying itself a 2.2 percent commission on every
oil sale. It collected $1.4 billion to ensure that
Oil-for-Food was on the up-and-up.
But according to the GAO, U.N. inspectors visually
checked only 7 to 10 percent of the shipments into Iraq.
The United Nation's own secret internal audit — obtained
by FOX News — found that management of border inspections
had "not been adequate" and that the company the United
Nations hired to check Oil-for-Food shipments — a
Swiss-based firm called Cotecna — had not "adhered" to its
That came as no surprise to Kamil Gailani, who was
minister of finance under the Iraq Governing Council, the
U.S.-appointed body that helped run the country between the
end of the war and the creation of Iraq's new government.
"I think they only just check like that and they don't
interfere with more details," Gailani said.
Gailaini said that U.N. inspectors let shipments of
spoiled food and expired medicines get through. "Maybe they
were warned by the Iraqi government not to check it, I don't
know, there is a possibility of that."
In a written statement, Cotecna told FOX it performed
ethically and couldn't respond to allegations due to
confidentiality agreements it made with the United Nations —
but said it is cooperating with U.N. and congressional
Of course, an audit wasn't needed to see Saddam was
getting more powerful from Oil-for-Food.
All around Iraq, parks, palaces and other lavish marble
encrusted structures were concrete evidence of the dollars
being pumping into the Saddam Hussein regime right up until
the very end.
Kofi Annan met with Saddam at one of those palaces in
1998, a time when he was defiantly blocking U.N. weapons
inspectors while Annan tried to get him to reconsider.
Saddam refused, and yet in 1999 the United Nations began
removing all restrictions on the amount of oil Iraq could
sell. By 2000, Saddam was buying fleets of Mercedes Benz
automobiles and other luxury goods.
The United Nations even let him spend $50 million to
upgrade Iraq's TV and radio propaganda machine that
coalition forces bombed in Operation Iraqi Freedom. Then
there's the $20 million that the United Nations approved for
the Olympic program run by Saddam's notorious son, Uday.
Well known, even then, were stories of how Uday tortured
and killed athletes. Later, coalition soldiers found in
Uday's Olympic complex a chamber of horrors that included an
actual iron maiden, a medieval apparatus of death.
"What this program was helping to sustain was a regime
which executed people, which employed professional rapists
to torment them," Rosett said. "Yes, some relief was
delivered, but at what cost? The cost was it helped keep
Saddam in power."