U.N. Faces Iraq Bribe Allegations

Vivid allegations of widespread corruption at the U.N. oil-for-food program by the top U.S. arms inspector have added credibility to accusations the United Nations looked the other way while Saddam Hussein's government skimmed billions of dollars and offered kickbacks to European and Arab countries and officials.

The inspector's report implicates the top U.N. official overseeing the $60 billion program, accusing him of accepting bribes in the form of vouchers for Iraqi oil sales, and details Iraqi manipulation to illegally enrich Saddam's government and influence Security Council members.

The alleged schemes included an Iraqi system for allocating lucrative oil vouchers, which permitted recipients to purchase certain amounts of oil at a profit, according to the report issued Wednesday by Charles Duelfer, head of the Iraq Survey Group.

He said the Iraqi government manipulated the U.N. program from 1996 to 2003 in order to acquire billions of dollars in illicit gains and to import illegal goods, including parts for missile systems.

The report said the program "rescued Baghdad's economy from a terminal decline created by sanctions."

"The regime quickly came to see that (the program) could be corrupted to acquire foreign exchange both to further undermine sanctions and to provide the means to enhance dual-use infrastructure and potential WMD-related development," it said.

Duelfer's report also found that Iraq had no weapons of mass destruction and no programs to create them, and harbored only ambitions to resume WMD work that were aimed at deterring Iran, not attacking the United States.

Responding to the report, a high-ranking Republican congressman demanded the United Nation's independent inquiry into the scandal speed up its timetable and release closely held documents to Congressional investigators.

"The world cannot wait years for answers to the growing body of evidence implicating senior U.N. officials in outright corruption," said Rep. Henry Hyde, who chairs the House International Relations Committee.

"Immediate public access to U.N. internal audits and other documents — thus far denied to members of the Security Council — is imperative if the world body is to escape further damage to its credibility as a result of this grossly mismanaged program."

Secretary-General Kofi Annan in April appointed former Fed chairman Paul Volcker to lead an independent investigation and he has said his committee will not deliver a report before mid-2005. Volcker has refused to share with Congress documents for their probes, including 55 internal audits of the oil-for-food program produced by the United Nations.

The Duelfer report said that Benon Sevan, the former chief of the U.N. program, is among dozens of people who allegedly received secret oil vouchers, with Saddam personally approving the list of recipients. The voucher list was dominated by Russian, French and Chinese recipients, in that order, with Saddam spreading the wealth widely to prominent business leaders, politicians, foreign government ministries and political parties, the report said.

The report names former French Interior Minister Charles Pasqua, Indonesian president Megawati Sukarnoputri and the Russian radical political figure Vladimir Zhirinovsky as voucher recipients, for example, and other foreign governments range from Yemen to Namibia.

Zhirinovsky denied the allegations.

"I never took a drop (of oil), or a single dollar from Iraq or from any other country. I have never dealt with oil," Russia's Interfax news agency cited Zhirinovsky as saying Thursday. "I do not care what (bribes) someone might have received. I personally gained nothing."

Zhirinovsky has visited Iraq frequently and called for increased trade between the two countries.

The oil companies mentioned included top Russian producers Yukos and Lukoil. Company officials could not immediately be reached to comment on the allegations.

The governments of Jordan, Syria, Turkey and Egypt did a brisk illicit oil trade with Iraq as well — more than $8 billion from 1991 until 2003, the report said: "These governments were full parties to all aspects of Iraq's unauthorized oil exports and imports."

The officials whose names have emerged amid multiple investigations have denied wrongdoing. The oil-for-food program was designed to allow limited oil sales to pay for humanitarian goods.

Asked about the fresh allegations against Sevan, U.N. spokesman Fred Eckhard said, "We are not going to comment on any specific allegation against Mr. Sevan or anyone else."

"This is in the hands of Paul Volcker," he added. "We are cooperating with him fully. Benon Sevan is cooperating with him fully, and we will wait for Volcker's judgment. Benon, meanwhile, stands by his statement that he's done nothing wrong."

Critics of the oil-for-food program and U.S. congressional investigators have long alleged that administration of the program was rife with corruption and failed to prevent illicit business deals and massive kickbacks to the Iraqi government.

The report said Saddam was able to subvert the oil-for-food program to generate an estimated $1.7 billion in revenue outside U.N. control from 1997-2003. And it said the voucher program, "provided Saddam with a useful method of rewarding countries, organizations and individuals willing to cooperate with Iraq to subvert U.N. sanctions."