Firms and governments mired by bribes to fend off UN action

Published on Thursday 7 October 2004 00:11

SADDAM Hussein’s network of corruption and bribery reached so deep into French public life that the Iraqi dictator even considered using Iraqi oil money to sponsor a candidate in the 2002 presidential election, a CIA investigation revealed yesterday.

Charles Duelfer, the CIA’s chief weapons hunter, recovered documents from the old Iraqi ministry of foreign affairs (MFA) and Saddam’s Iraqi Intelligence Service (IIS) showing that as early as May 2002, the Iraqi dictator received assurances that France would veto any US bid for UN military action against him.

The degree of intimacy that existed between Iraq and France may vindicate British and American leaders who believed that Jacques Chirac, the French president, was never open to arguments for removing Saddam.

The CIA report states that Saddam regarded France as the key player in keeping his regime safe from American intervention. "Consequently, Saddam ordered the MFA and other ministries to improve relations with France, according to recovered documents," the report found.

Among the options considered for improving relations with Paris were inviting French officials to Iraq, sending more diplomats to France, "and assessing possibilities for financially supporting one of the candidates in an upcoming French presidential election".

In May 2002, an unnamed senior French politician assured an Iraqi official in France that France would use its UN veto against any American decision to attack Iraq.

Tariq Aziz, Saddam’s deputy, told his American jailers that "the primary motive for French continued support and co-operation with Iraq in the UN was economic".

In particular, French oil companies wanted to secure two large oil contracts, deals which Russian and Chinese companies were also pursuing.

Oil money was the key to Saddam’s efforts to manipulate the international community in his favour.

The CIA report reveals that he found willing collaborators in several countries, all willing to help him sidestep the UN sanctions aimed at preventing his attempts to restart a programme of weapons of mass destruction.

Under Saddam’s guidance, Iraqi officials transformed the UN oil-for-food (OFF) programme into a global web of corruption. Saddam managed to cream off billions of dollars in oil revenue to prop up his regime in the face of tough international sanctions.

Aided by "foreign companies and some foreign governments, [Saddam] devised and implemented methods and techniques to procure illicit goods from foreign suppliers", the report said.

Reports earlier this year published a list of several hundred individuals alleged to have received "oil vouchers" from Saddam’s regime, allowing them to sell on barrels of oil at a profit.

It was alleged Saddam used the offer of the vouchers to bribe individuals, companies and even governments to help him.

Among those alleged to have been named on the list are a British public figure and several senior French officials, including two "counsellors" to Mr Chirac, as well as one prominent French businessman close to the president.

Mr Duelfer’s report said Saddam "focused on one set of objectives: the survival of himself, his regime, and his legacy. To secure those objectives, Saddam needed to exploit Iraqi oil assets".

Saddam also attempted to undermine UN-imposed sanctions by influencing Russia and China, like France permanent members of the UN Security Council with the power of veto over council decisions.

"Another element of this strategy involved circumventing UN sanctions and the OFF programme by means of ‘protocols’ or government-to-government economic trade agreements.

"Protocols allowed Saddam to generate a large amount of revenue outside the purview of the UN. The successful implementation of the protocols, continued oil smuggling efforts, and the manipulation of UN OFF contracts emboldened Saddam to pursue his military reconstitution efforts starting in 1997 and peaking in 2001.

"These efforts covered conventional arms, dual-use goods acquisition, and some WMD-related programmes."

The report added: "To implement its procurement efforts, Iraq, under Saddam, created a network of Iraqi front companies, some with close relationships to high-ranking foreign government officials.

"These foreign government officials, in turn, worked through their respective ministries, state-run companies and ministry-sponsored front companies, to procure illicit goods, services, and technologies for Iraq’s WMD-related, conventional arms, and/or dual-use goods programmes.

"The regime financed these government-sanctioned programmes by several illicit revenue streams that amassed more than $11 billion from the early 1990s to OFF outside the UN-approved methods. The most profitable stream concerned protocols or government-to-government agreements that generated over $7.5 billion for Saddam."

The oil-for-food programme was established in 1996 and ran until 2003. It allowed the Iraqi government to sell $1 billion worth of oil every 90 days to pay for food, medicine and other humanitarian materials to benefit the Iraqi people.

In total, Iraq raised more than $64 billion over the course of the programme’s seven-year history.

The allegations of corruption in the programme first surfaced in the US in April when ABC News reported that at least three senior UN officials had accepted bribes from the Iraqi regime.

The documents, which were first obtained by the independent Iraqi newspaper Al-Mada, suggested that one official had received 7.5 million barrels of oil, worth at least $3.5 million.

According to Claude Hankes-Drielsma, a British adviser to the then Coalition Provisional Authority in Baghdad, the system was "almost like having coupons of bonds or shares. You can sell those coupons to other people who are normal oil traders".

In January, documents emerged which showed that 270 individuals, governments and businesses had received lucrative oil contracts from Iraq that allowed them to buy oil cheaply before selling it on at a considerable profit.

Among those French individuals and companies mentioned in the documents obtained by ABC News were a former government minister who allegedly benefited to the tune of $12 million, a businessman with close links to Mr Chirac who was reported to have received $25 million, and a former French ambassador to the United Nations said to have got $3 million.

The documents also suggested a British public figure had made as much as $19 million from dealings with the Iraqi regime. Among the other names mentioned were a senior Indonesian politician, the Palestinian Liberation Organisation and numerous political parties and organisations in Russia.