Saturday, December 29, 2007

Oil-for-Food Case Opens in Australia

[T]he oil-for-food program... ultimately proved to be a cash cow masquerading as a humanitarian aid program.”---Mark J. Mershon, assistant director in charge of the FBI’s New York office

The New York Times (12-21-07) reports that a new U.N. oil-for-food civil case has opened in Australia.

An Independent Inquiry Committee led by Paul Volcker determined that executives of the Australian Wheat Board paid $250 million in bribes to Saddam Hussein. The bribes were "disguised as transport fees paid to a Jordanian trucking company partly owned by Mr. Hussein’s Ministry of Transport, the inquiry reported."

According to Volcker (10-27-05), Saddam Hussein's manipulation of the Oil-for-Food Program diverted almost two billion dollars from the humanitarian purposes of the program. More than 2000 companies were involved in the illicit payments.

According to Volcker, Saddam also made an estimated 11 billion dollars by smuggling oil outside of the Oil-for-Food Program.

The New York Times reports:

The men [in the Australia case] could also face criminal proceedings, but because the statute of limitations expires earlier for civil suits than for criminal cases, the authorities moved first on the civil action.

NBC News (1-6-2006) explains:

The oil-for-food program ran from 1996 to 2003. It was created to help Iraqis cope with U.N. sanctions imposed after Saddam Hussein’s 1990 invasion of Kuwait. It let the Iraqi government sell limited — and eventually unlimited — amounts of oil primarily to buy humanitarian goods.

But Saddam chose the buyers of Iraqi oil and the sellers of humanitarian goods. In a bid to end the sanctions, Saddam allegedly gave former government officials, activists, journalists and U.N. officials vouchers for oil to be resold at a profit.

Mark J. Mershon, assistant director in charge of the FBI’s New York office, said that the Oil-for-Food Program "proved to be a cash cow masquerading as a humanitarian aid program.”

The official U.N. perspective on the Oil-for-Food Program is posted here. The U.N. site explains:

Although established in April 1995, the implementation of the programme started only in December 1996, after the signing of the Memorandum of Understanding (MOU) between the United Nations and the Government of Iraq on 20 May 1996 (S/1996/356). The first Iraqi oil under the Oil-for-Food Programme was exported in December 1996 and the first shipments of food arrived in March 1997...

In the initial stages of the programme, Iraq was permitted to sell $2 billion worth of oil every six months, with two-thirds of that amount to be used to meet Iraq’s humanitarian needs. In 1998, the limit on the level of Iraqi oil exports under the programme was raised to $5.26 billion every six months, again with two-thirds of the oil proceeds earmarked to meet the humanitarian needs of the Iraqi people. In December 1999, the ceiling on Iraqi oil exports under the programme was removed by the Security Council.

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