Daily Telegraph Billion-dollar timebomb puts Chalabi at risk By Robin Gedye, Foreign Affairs Writer May 21, 2004
Ahmad Chalabi is in possession of "miles" of documents with the potential to expose politicians, corporations and the United Nations as having connived in a system of kickbacks and false pricing worth billions of pounds. That may have been enough to provoke yesterday's American raid. So explosive are the contents of the files that their publication would cause serious problems for US allies and friendly states around the globe. Late last year and several months before Paul Bremer's Coalition Provisional Authority became involved, Mr Chalabi had amassed enough information concerning corruption in the oil-for-food scandal to realise that he was sitting on explosive material. It was information that would lead to the publication in a Baghdad newspaper in January of a list of 270 businessmen, politicians and corporations, of whom many were alleged to have received money in the form of kickbacks from Saddam's regime. The list published in the newspaper al-Mada included British, Russian and French politicians, among them Benon Savan, who ran the UN's oil-for-food programme. "The Iraqi regime, like all dictatorships, kept meticulous records with countless cross-references," said a source close to Mr Chalabi. "The UN's oil-for food programme provided Saddam Hussein and his corrupt and evil regime with a convenient vehicle through which he bought support internationally by bribing political parties, companies, journalists and other individuals of influence," said Claude Hankes-Drielsma, a British strategy consultant who was hired by Mr Chalabi. "I first became aware of the extent of the UN's oil-for-food problem last December when I was shown a list of non-end users who purchased crude oil through the UN approved programme. "While the list included many bona fide oil traders, there were many names that raised questions. It suggested a pattern of buying influence through those with political influence within their own countries." On Dec 5, 2003, Mr Hankes-Drielsma wrote to Kofi Annan, the UN secretary-general, strongly urging the UN to "consider appointing an independent commission to review and investigate the oil-for-food programme". On Feb 2 he followed his letter to Mr Annan with one to Hans Corell, under-secretary for legal affairs and legal counsel at the UN, outlining the potential scandal. He also had a meeting with Jeremy Greenstock, Britain's special envoy to Iraq. Mr Corell responded by asking him to "produce the evidence". On the basis of this challenge, the Iraq Governing Council decided it would have to appoint an internationally-renowned firm of accountants, together with legal advisers. KPMG were duly appointed by the finance committee of the IGC and the UN was informed on March 3. Some three weeks later, "Mr Bremer decided to intervene", said Mr Hankes-Drielsma, informing the IGC that he would not release funds from the Iraqi Development Fund to meet the cost of the investigation unless the contract was put out to tender. "He also without discussion or consultation put an arbitrary upper limit of $5 million [£2.8 million]" on the funds. The contract was put out to tender the next day while KPMG had to stop its work. Within two weeks, on April 9, the CPA put out its own invitation to tender for a parallel investigation. Meanwhile, on April 18, the IGC reviewed the submitted tender proposals and decided that KPMG's proposal was, after all, the most suitable. Last Thursday Mr Bremer's CPA announced that it had appointed the accounting firm Ernst and Young to lead its investigation, in apparent conflict with KPMG. KPMG, which had also bid for the CPA contract, said that it was forced to drop out because the CPA refused to agree to adequate legal protection in an investigation with immense potential for litigation. Ernst and Young refused even to confirm that it had won the contract. Meanwhile KPMG is still waiting for its $5 million to begin work.
