Foreign firms paid Saddam commission in oil-for-food deals

COMPANIES from Australia, the US and other countries paid a secret commission to Saddam Hussein’s government to secure contracts under the United Nations’ oil-for-food programme, Iraqi and occupation officials said yesterday.

Iraq demanded a 10 per cent payment from suppliers who were told to put the money into Arab bank accounts set up by Saddam’s administration.

"All oil-for-food contracts from 1998 included 10 per cent in ‘after-sales services’, including some with US companies," an official from the Coalition Provisional Authority (CPA) said.

The oil-for-food programme was designed to protect ordinary Iraqis from the worst hardships wrought by UN sanctions against Saddam’s regime, by providing food, medicines and other goods and paid for by oil sales.

The quantities involved were huge, especially the food required to feed 27 million Iraqis. Australia alone was exporting up to two million tonnes of wheat a year to Iraq before Saddam was toppled.

But there is growing evidence of corruption. Billions of dollars’ worth of goods flowed through the programme, established in 1996 and administered by the United Nations in New York through the French bank Paribas.

The US General Accounting Office has said Saddam and his cronies raised $4.4 billion in illegal revenues by imposing oil surcharges and commissions on suppliers of goods to Iraq under the scheme. After the war, the US-led occupation authority reviewed and amended 3,500 unexecuted contracts worth $8 billion to remove the surcharge, said the CPA official.

Copies of contracts and UN documents show the Australian Wheat Board agreed after the war to amend a 14 December, 2002 contract for up to 525,000 tonnes of wheat. The documents showed the original contract price was 10 per cent higher than the amended price.

The Wheat Board has denied paying any commissions, and pledged to co-operate with a UN investigation into possible corruption.

The bulk of goods were supplied by Australian, Vietnamese, Thai, Russian, Jordanian and Syrian firms, said an official. Saudi and US firms were also involved, although as minor players.

Under US pressure, the UN is conducting an investigation into possible corruption in the programme. The amendment to the Australian wheat contract read: "The United Nations is implementing a price correction at the request of the Coalition Provisional Authority."

The amendment, signed on 25 September, 2003, between the Australian Wheat Board and the UN World Food Programme lists the unit price at 254.88 (172.40) a tonne compared with the original 280.37. The total price in the amendment was 133,812,000 for delivery of up to 525,000 tonnes into Umm Qasr port compared to 147,194,250 in the original contract.