Report Cites U.S. Profits in Sale of Iraqi Oil Under Hussein
By Judith Miller and Eric Lapton
The New York Times
Saturday 09 October 2004
Washington - Major American oil companies and a Texas oil investor were among
those who received lucrative vouchers that enabled them to buy Iraqi oil under the
United Nations oil-for-food program, according to a report prepared by the chief arms
inspector for the Central Intelligence Agency.
The 918-page report says that four American oil companies - Chevron, Mobil, Texaco
and Bay Oil - and three individuals including Oscar S. Wyatt Jr. of Houston were given
vouchers and got 111 million barrels of oil between them from 1996 to 2003. The
vouchers allowed them to profit by selling the oil or the right to trade it.
The other individuals, whose names appeared on a secret list maintained by the
former Iraqi government, were Samir Vincent of Annandale, Va., and Shakir al-Khafaji
of West Bloomfield, Mich., according to the report by the inspector, Charles A.
Duelfer.
The fact that these companies and individuals received oil from Iraq does not mean
they did anything illegal, experts on the program said. Such allocations may have been
proper if the individuals and companies received appropriate United Nations approval.
In interviews on Friday, spokesmen for the oil companies and for the El Paso
Corporation, which assumed control of the assets of a company, Coastal Corporation,
once run by Mr. Wyatt, said the transactions had been legal. But each confirmed that
they had received subpoenas from a federal grand jury in New York, which is
investigating "transactions in oil of Iraqi origin" as part of the oil-for-food
program, according to a federal financial filing by El Paso.
The largest of the allocations went to Mr. Wyatt, who the list said had received
allocations totaling 74 million barrels. At the profit rates of 15 cents to 85 cents
per barrel that were reported in the arms inspector's study, he could have earned $23
million. The names of the American companies and citizens who benefited from the
vouchers were not included in the published report prepared by the Iraq Survey Group
that was released Wednesday by the C.I.A., since the names of American individuals
cannot be publicly disclosed under privacy laws. But the names were contained in
unredacted copies given to the White House and to several Congressional committees. A
copy of the unedited list was shown to The New York Times.
Tony Fratto, a Treasury Department spokesman, said United States sanctions on Iraq
had prohibited American companies and individuals from interacting directly with Iraqi
officials. But the oil dealers were permitted to get special authorization from the
federal government to bid on United Nations contracts under the oil-for-food program.
He said the agency was "actively investigating" whether the American entities and
people circumvented that requirement.
Reid Morden, the staff director of the Independent Inquiry Committee, the United
Nations-appointed panel headed by the former United States Federal Reserve chairman,
Paul A. Volcker, said his committee too was "reviewing" the new report "to see if it
helps us with our investigation."
The oil-for-food program, which was started in 1996, was intended to allow Iraq,
in a closely monitored way, to sell enough oil so that the country would have the
resources to buy food, medicine and to maintain certain critical public facilities.
The program was abused when Saddam Hussein intervened, personally selecting
individuals and companies to receive oil allocations. The allocations, also called
vouchers, could be sold so that the recipient approved by Mr. Hussein did not have to
trade the oil but could simply profit from the transaction.
Ultimately, Mr. Hussein began to demand kickbacks in return for these oil
allocations, a requirement that some oil dealers were willing to honor given the large
profit margins associated with oil trade.
The proceeds may have been used by Mr. Hussein to pay for purchases of arms in
violation of sanctions, the report says.
Among American companies and citizens, Mr. Wyatt, who did not respond to messages
left on Friday at his Houston office, was by far the largest recipient of oil
allocations, as recorded on the secret list maintained by the Iraqi government, the
report says.
For decades, Mr. Wyatt has been a hard-driving - and controversial - oil merchant
who did business with Col. Muammar el-Qaddafi of Libya and helped rescue hostages in
Kuwait. In 2000, his Coastal Corporation merged with the El Paso Corporation. Mr.
Wyatt is still a large shareholder in El Paso, but he is not an executive with the
company, which last month received the subpoena related to the Iraqi oil deals.
Mr. Khafaji and Mr. Vincent, who both received much smaller allocations in the
secret Iraqi list than Mr. Wyatt, could not be reached for comment. Mr. Vincent is an
Iraqi-born businessman who headed Phoenix International.
Mr. Khafaji financed a controversial film about Iraq by Scott Ritter, the former
United Nations arms inspector who opposed the American-led invasion of Iraq.
Rep. Christopher Shays, the Connecticut Republican who heads the subcommittee on
government reform, which has been investigating the oil-for-food program, said his
panel would "follow the list wherever it takes us."
"We want a full explanation of the involvement of all American oil companies and
individuals who were involved in a thoroughly corrupt program," he said.
Representative Henry J. Hyde, Republican of Illinois, chairman of the
International Relations Committee that is also investigating the seven-year
oil-for-food program, said in a statement that the Iraq Survey Group's report showed
the "full breadth of Saddam Hussein's corruption and manipulation of the U.N. Oil for
Food program."
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Go to Original
Report on Iraq Arms Deals Angers France and Others
By Steven R. Weisman
The New York Times
Saturday 09 October 2004
Washington - The Bush administration's handling this week of a report on Saddam
Hussein's attempts to purchase weapons and buy influence has angered French officials
and set back a year of American efforts to repair the rupture caused by the Iraq war,
French and other European officials said Friday.
The anger of France and others is focused on the assertions in the report by
Charles A. Duelfer, the top American arms inspector in Iraq, that French companies and
individuals, some with close ties to the government, enriched themselves through
Iraq's efforts to gain influence around the world in the years before the war.
Administration spokesmen said Friday that there was no intent in releasing the
report to endorse its findings or blame France or any other country for corruption, or
to link any alleged corruption to that country's subsequent opposition to the war in
Iraq.
On the other hand, Vice President Dick Cheney and others in the administration are
citing the Duelfer report as evidence that Mr. Hussein had sought to corrupt foreign
countries in order to have sanctions on Iraq lifted. Although Mr. Cheney did not say
so directly, French officials say it was obvious that he was referring to France and
other countries that had opposed the war.
French officials say that the report's charges, based on documents and interviews
in Iraq, have been denied in the past, but that Mr. Duelfer's report did not contain
the denials. They also complain that France was not given more than one day's notice
before the report was issued.
They were incensed that the report also mentioned Americans in connection with
similar charges but that unlike the French they were not identified because of
American privacy regulations.
"You protect American citizens, but you put in danger a number of private citizens
in other countries who may be innocent people," said Jean-David Levitte, the French
ambassador to the United States. "These names are from an old list, published months
ago, and those mentioned denied it flatly."
A European diplomat said the damage to French-American relations was so great that
it could disrupt a new spirit of cooperation with France on other fronts, namely the
joint American and European efforts to put pressure on Iran to dismantle its suspected
nuclear weapons program and to organize an international conference next month on
Iraq.
"This report does great damage," Mr. Levitte said. "There really is a sense of
outrage in Paris. We don't want to create a situation that will put us back to one
year ago. But these are dirty tricks at the expense of France, with the White House
putting the finger on the name of France." Mr. Duelfer's main conclusion - that Iraq
did not have unconventional weapons when the Bush administration was charging that it
had them - got the most publicity when the 918-page report was issued.
But the administration highlighted charges that under Mr. Hussein, Iraq was
successful in circumventing the sanctions placed on it by the United Nations by
purchasing conventional weapons with money siphoned fraudulently from a program
authorized by the United Nations in 1996, allowing Iraq to sell oil and use the
revenue for food, medicine and other human necessities.
To curry favor around the world, Iraq set up a system in which some individuals
and companies were able to profit by manipulating the oil-for-food program. Among
those enriched in this process, the report said, were French, Russian and other
officials.
Administration spokesmen said Friday that the United States did not endorse the
allegations that anyone was enriched by Iraq's practices, only that Iraq was trying to
buy influence and weaken sanctions.
"It doesn't say that those transactions were completed," said Richard A. Boucher,
the State Department spokesman. "It doesn't say whether or not governments intervened.
It doesn't say whether or not the individuals declined. It doesn't really say what
happened."
But that was not the tone adopted by Mr. Cheney and other officials caught up in
President Bush's tough re-election campaign. In Florida on Thursday, Mr. Cheney said
Mr. Hussein had used oil funds to corrupt "some employees of the United Nations as
well as other governments in the hopes that they would work with him to undermine the
sanctions."
A day before releasing the Duelfer report, the State Department called in
officials from several embassies in Washington to give them a preview. That meeting
itself stirred anger, according to those who attended. "We were not given the text of
the report," said a diplomat from a country other than France. "We were directed to
the C.I.A. Web site, and we couldn't download it," because the site was swamped.
Mr. Levitte said he had called top officials at the White House and the State
Department to protest "in very strong terms that I considered this very unfair and not
good behavior from a great democracy, to protect your own citizens and give publicity
to others in the Web site of the C.I.A."
He said the officials had "noted with some embarrassment that I had a point."
The Mulindwas Communication Group
"With Yoweri Museveni, Uganda is in anarchy"
Groupe de communication Mulindwas
"avec Yoweri Museveni, l'Ouganda est dans l'anarchie"
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