Wednesday, October 06, 2004
House hearings on
Tuesday raised the possibility that Saddam Hussein bought
votes in the United Nations Security Council in exchange
for benefits from the Oil-for-Food program approved by the
House Government Reform
subcommittee chairman Rep. Christopher Shays, R-Conn.,
suggested the Oil-for-Food program actually helped keep the
now-deposed Iraqi leader in power because the former
dictator gave oil contracts to Security Council members who
The "U.N. sanctions regime
against Iraq was all but eviscerated and turned inside-out
by political manipulation and financial greed," said Shays.
"Saddam's regime was not collapsing from within, it was
The Oil-for-Food program,
which ran from 1996 to 2003, was created to allow the Iraqi
government to sell oil in exchange for humanitarian goods.
But on Tuesday, representatives from companies hired to
monitor oil sales and the products entering Iraq bought with
the proceeds said they were threatened by Iraqi officials —
on one occasion by 20 armed guards — and stymied by
Hussein's ability to manipulate records and trade.
U.N. Ambassador Patrick
Kennedy said the program successfully provided critical food
and medicine to the Iraqi people. But under heated
questioning from Shays, he acknowledged that Cotecna, the
company hired to monitor goods coming into Iraq, and Saybolt
International B.V., the company inspecting oil exports, did
not have the authority they needed to do adequate
Stronger oversight, he said,
would have been blocked by other countries on the U.N.
Security Council who did not want to undermine Iraq's
sovereignty. Companies from some of those countries also
were doing business with Iraq, either buying oil or selling
"It was about as leaky as it
could get," Shays said. "Almost every transaction may have
been a rip-off" that compromised the United Nations and
allowed Hussein to make money.
The scandal-scarred program
pumped more than $10 billion into the former Iraqi
dictator’s pockets through a sophisticated system of bribes,
payoffs and kickbacks.
David Smith, the director of
corporate banking operations at BNP Paribas, the French bank
used in Oil-for-Food, also acknowledged problems in the
program, but placed the responsibility on the U.N.
"The U.N. was the
bank's customer," Smith said. "The U.N. approved the
parties... under the contracts
BNP Paribas handled $64
billion in Iraqi deposits. Though it is not a target in the
congressional probe involving companies and individuals in
50 countries, it has supplied thousands of
documents that could provide a road map to alleged
corruption at the U.N. and by politicians from France,
Russia, Britain, Indonesia and Persian Gulf states who have
Three congressional panels
that subpoenaed BNP Paribas' documents are looking into
whether the bank met minimum standards that require
financial institutions to identify customers, partly to
prevent money laundering.
Democrats on the
subcommittee chose not to concentrate on Hussein despite a
Government Accountability Office report that
estimated the Iraqi government skimmed $4.4 billion through
kickbacks and another $5.7 billion through oil smuggling.
Instead, Democrats turned their attention to the Bush
administration, wanting to know how Halliburton received oil
contracts after the Oil-for-Food program ended.
"These actions are
hypocritical, they are arrogant, they breed resentment in
the Arab world, and they further deteriorate our global
alliances," Rep. Henry Waxman, D-Calif., said.
He went on to suggest the
Halliburton deals harm U.S. operations because they give
credence to allegations of American greed.
"Most of all, [the deals]
undermine our efforts in Iraq because they reinforce the
image that our primary objective in Iraq was to seize
control of the country's oil wealth," he said.
Shays said he did not agree
on the argument for needing the information; he said the
request had merit. The subcommittee is expected to issue a
subpoena to the Federal Reserve Bank of New York for
information on management of oil revenues and to send a
letter to Defense Secretary Donald Rumsfeld seeking audits
on noncompetitive contracts.
In addition to the
congressional investigation, a CIA report to be presented on
Wednesday is expected to detail how Hussein allegedly bought
$1 billion worth of weapons systems using money generated by
the Oil-for-Food program.