Galloway in the dock

Published on 30/10/2005 00:22

HIS DENIAL was carefully worded from the first. "I have never seen a barrel of oil, never bought one, never sold one and neither has anyone on my behalf." But this, as George Galloway should have known, was never the accusation.

The bribery system set up by Saddam Hussein - and run with the connivance of United Nations officials overseeing the $64bn oil-for-food programme - was never so crude as to require its beneficiaries to trade oil, or ask anyone to do so. It offered vouchers which were handled through trusted local intermediaries and easily converted into cleanly-laundered money. For the discerning fraudster, Saddam, in his final days, was running the most discrete scam in the world.

This is the picture now presented to us by Paul Volcker, respected former chairman of the US Federal Reserve, who, after 18 months of inquiry, has found Galloway prominent among a staggering list of 2,200 politicians and firms listed as complicit in the fraud. In company such as DaimlerChrysler and Volvo, little attention should perhaps fall on a British MP thrown out of the Labour Party and now the sole MP for Respect, a party he invented. But Galloway has a habit of making himself noticed.

An incurable self-publicist, revered as a crusader by his allies and reviled as an unprincipled demagogue by critics, Galloway has volunteered for the role of lightning rod in a scandal which - to many Americans - has exposed European politicians on the make.

His crusade started in April 2003 when the Daily Telegraph's Baghdad reporter went into the abandoned Iraqi Foreign Affairs ministry to find a document suggesting Galloway had received from Saddam an allocation for 18m barrels of oil. The paper wrote it up and editorialised on it; he sued and won (the case is now at appeal). But as American weapons inspectors scoured liberated Iraq seeking incriminating documents, they found evidence to corroborate the theme: Saddam had been offering vouchers entitling people to buy oil at a low price.

A list of such people was published by al-Mada, an Iraqi newspaper, in January 2004: Galloway was on it. Nine months later, the Iraq Survey Group also named Galloway on a list of fraud beneficiaries whose details were kept meticulously, as is the Iraqi way. Last Tuesday, the US Senate Permanent Subcommittee on Investigations Committee released a 62-page document in which it declared Galloway had lied under oath when giving evidence last May. Then, he had staged a theatrical coup, denouncing the committee on live television, then trailing America on a book-selling tour where he was hailed as the man who cleaned the clock of Norm Coleman (chairman of the committee).

Senator Coleman has had his retaliation. With forensic skill, his committee has unearthed bank statements showing how and when money was wired from Iraqi oil firms to the personal account of Dr Amineh Abu Zayyad, Galloway's wife. His team has paid a visit to Tariq Aziz, former deputy prime minister of Iraq, who confirmed the authenticity of the original Iraqi intelligence document discovered by the Daily Telegraph; he said Galloway had, indeed, solicited money. As if a stone had been left unturned by Coleman, Volcker's report quoted an oil trader who had personally spoken to Galloway about selling oil allocations from Saddam. For good measure, Volcker found a new $130,000 payment to his wife.

Galloway is characteristically unbowed. "How many times must I repeat this?" he asked last Thursday. "I've never had a penny through oil deals and no-one has produced a shred of evidence that I have." While this may well be true for him personally, there is now evidence to suggest the same cannot be said for his wife, his business partner and even his spokesman; and it is certainly not true for the Mariam Appeal, the "charity" which Galloway used as his personal platform and which the US Senate says profited directly from Saddam's oil-for-food scams.

We now have an apparent picture of how Galloway's close links to a brutal dictator and his regime quickly morphed into extraordinary profit for his friends, his family and his personal campaign war chest.

The Volcker report has added depth to work of the Iraq Survey Group in October last year by showing that, just before the war, sanctions on Iraq had almost collapsed and that the UN hierarchy in Iraq was itself on the take.

Stapled to the back of the Iraqi Intelligence Service (IIS) document was a piece of House of Commons notepaper on which Galloway had written a note "to whom it may concern", naming his representative in Baghdad as Fawaz Zureikat, a Jordanian businessman. Galloway has confirmed the authenticity of the letter but claims no specific knowledge of Zureikat's business dealings which, if true, is just as well, given what can now be proven about Zureikat's complicity in the oil-for-food programme.

The US Senate Committee says that Aziz, from captivity, has confirmed the content of the IIS document. Galloway, he says, expressed concern about taking money directly from the Iraqi government. So he was pledged financial income under commercial cover. The oil-for-food programme came in phases. The first allocation with Galloway's name on it came in Phase VII, an order for three million barrels of oil. The contract handler was Burhan Chalabi, a British-Iraqi businessman (and a long-time associated of Galloway's who helped to organise the MP's 'mercy' trips to Iraq); the end-buyer was Fortum of Finland. Delta Services, Chalabi's company, received $472,000 from Fortum. Here, the Volcker report picks up the story on page 88: Soon after each deposit, payments totalling over $120,000 were transferred from the Delta Services bank account to the bank account of Mr Galloway's wife.

The Senate inquiry also says that a $15,700 payment was made to a Bank of Scotland account belonging to Ron McKay, a Scottish journalist and Galloway's spokesman, who says he doesn't recall receiving such a figure. Augusto Giangrandi is named in the Volcker report as an oil dealer for Bayoil of Houston, Texas; he says Galloway asked him how the oil trading system worked. When challenged about this, Galloway said it is a "cock and bull story".

Yet, the US Senate quotes an oil trader, anonymously. He says: "Galloway told me that, if he were to obtain an oil allocation, he would contact us directly."

After Phase VII, the US Senate says Galloway asked for more oil. Aziz, it says, claims they agreed to give him more "but not very much". The next uplift in his name, Phase VIII, was for 4m barrels. That autumn the proceeds from it were ready to move to Britain.

Galloway had set up the Mariam Appeal, ostensibly to help Mariam Hamza, an Iraqi child flown to Britain to be treated for leukaemia. She was nursed by Galloway's wife, who was paid 25,000 a year. As journalists looked more closely at the operations of the Mariam Appeal, Galloway declared it was not a charity. No wonder: much of its proceeds were spent on his own personal travel costs and on his campaign to lift sanctions on Iraq; but in Zureikat, its chairman, it had a very generous benefactor.

Following a trail of Citibank money transfers, the US Senate finds $740,000 from Taurus Petroleum, who were arranging Zureikat's Phase VIII oil lift, landing in Zureikat's account on July 27. A week later, wire transfer records show $150,000 being transferred from Zureikat's account to Galloway's wife and a further $340,000 to the Mariam Appeal. If these records are accurate, they will now spell trouble for Galloway.

Though he has declared that the Mariam Appeal was not a charity, the Charities Commission for England and Wales, which regulates such matters, disagrees. It has the right to regulate whomever it likes; and when investigating Mariam last year did not have its accounts. It has now asked for and is being sent documents which the US Senate says proves that a British charity (as defined by the Commissioner) was receiving money from an illegal source. If the Commission agrees, it will pass its findings to the police.

In America, too, things are heating up. The US Senate has issued a list of lies it believes Galloway told them: misleading a Senate committee is a criminal offence in America, punishable by up to five years in prison.

With typical bravado Galloway spent much of last week saying he was "begging" to be prosecuted. He could get his wish, perhaps on both sides of the Atlantic. As Scotland on Sunday reveals today, Coleman has now sent his report and extracts from Volcker's findings to the Department for Justice, two federal prosecutors and to the district attorney's office in Manhattan. The aim is to ensure that as many prosecutors are involved State-side as possible in the hope that at least one will launch a criminal investigation.

Galloway is right to say that, even now, no-one has produced evidence to prove he personally profited from Saddam's regime, though it is becoming pretty clear his "charity" did, as did his wife, from whom he is now estranged (but was not when the money transfers were made to her account from his close business associate). Galloway also claims that Aziz was misquoted by the US Senate Committee.

But the evidence against him is growing. We now see what appears to be a trail of money linking Galloway's wife, his charity, his spokesman and his business partner to a fraud scheme run by one of the world's most brutal dictators. Even if that does not lead to his day in court, in America or Britain, he might still have to face Sir Philip Mawer, the House of Commons commissioner for standards. He has a broader remit and has already started conducting his own inquiry.

When he emerged from Senator Coleman's committee last May, Galloway declared the United States to be "tinder dry, waiting for a spark like this". This weekend the flames are drawing uncomfortably close to his own feet.