Skip to comments.New Scrutiny of the Flow of Iraqi Oil to American Consumers
Posted on 10/11/2004 6:17:18 AM PDT by OESY
As Saddam Hussein pressed the United Nations oil-for-food relief program for more money that he used to buy banned weapons, an unwitting ally may have been the American driver. Almost until the eve of the invasion of Iraq in March 2003, American oil companies were among the largest purchasers of Iraqi crude oil.
The role that the companies, including ExxonMobil and ChevronTexaco, played in the oil-for-food program is now coming under greater scrutiny in the wake of a report by the chief arms inspector for the Central Intelligence Agency that disclosed how extensively Mr. Hussein was abusing profits from the oil sales.
Executives at the two companies insisted over the weekend that their purchases of Iraqi oil were not illegal or unknown in international oil markets in recent years. Industry analysts also said they did not know of any improprieties by the companies.
"All of our purchases of Iraqi crude were conducted in full compliance with the program," a spokesman for ChevronTexaco, Michael Barrett, said.
In 2001, Iraq was the source of 7 percent of all United States petroleum imports, ranking sixth behind the largest foreign suppliers: Saudi Arabia, Canada, Venezuela, Mexico and Nigeria, according to the Energy Department.
Yet while such imports were considered routine, disclosures about irregularities in how the Iraqi government selected partners to market the oil have led to several investigations of the program - by the United Nations, Congressional committees and a federal grand jury. The United States attorney's office in Manhattan has issued subpoenas to several American companies whose names appear on the Iraqi list as having received vouchers for Iraqi oil.
A spokesman for the House International Relations Committee said yesterday that the committee was exploring which oil companies had received Iraqi oil or had been trading in the vouchers. While committee investigators had been concentrating on the connection between vouchers and Iraqi arms purchases, the report issued last week by Charles A. Duelfer, the arms inspector, that named United States oil companies as recipients of vouchers was now prompting the panel's investigators to expand their inquiry to include the United States oil companies as well.
In the meantime, an investigator associated with the independent United Nations-appointed panel looking into corruption in the oil-for-food program, said that his group had not begun investigating whether or how American and other oil companies had benefited. The panel, led by Paul A. Volcker, the former chairman of the Federal Reserve system, is concentrating on accusations of wrongdoing by United Nations employees and companies like Cotecna Inspection of Switzerland and Saybolt International, a Dutch concern, which the United Nations hired to monitor parts of the program.
The investigator said that the panel would only begin to focus on oil companies that got Iraqi crude oil, with or without United Nations authorization, after this initial phase of the inquiry was completed, which is likely to be weeks or even months away. The investigator noted that the panel did not have subpoena power and lacked the authority to take punitive action against any company, American or foreign. Under the oil-for-food program, he said, member countries, not the United Nations, were responsible for ensuring that their companies obeyed sanctions against Iraq.
The House Energy and Commerce Committee has also joined the inquiry, with the chairman, Representative Joe L. Barton, Republican of Texas, sending a letter last Thursday to the United Nations secretary general, Kofi Annan, asking Mr. Annan to release "any information in U.N. possession which relates to the use of oil-for-food money to produce chemical weapons in Iraq."
The oil-for-food program, over its life, resulted in $64.2 billion in sales, making it the world's largest relief program, American officials say. The amount of oil sold fluctuated as the program went on. At the start, in December 1996, Iraq was allowed to sell only $2 billion worth of oil every six months. That limit was raised to $5.26 billion every six months by December 1999 and then was lifted altogether, until the oil-for-food program came to an end in March 2003.
The program allowed Iraq the power to determine, with certain exceptions, whom it sold oil to and whom it bought goods from, based on the profits of the sale, according to the United Nations, but the United Nations had veto authority over all the contracts. For a United States oil company to participate, it first needed permission from Washington. The revenue ultimately financed $31 billion of relief supplies and equipment, including $1.6 billion of oil-industry spare parts and equipment, among other items, according to the United Nations.
At the same time, Mr. Hussein was imposing illegal surcharges, collecting kickbacks and smuggling oil outside the approved program, generating almost $11 billion in illicit revenue, which he used to buy weapons, other prohibited items and to build lavish palaces, according to the Duelfer report.
Moreover, oil experts have said, the largest source of money from unreported oil sales was from Iraq's illicit sale of oil to neighboring Turkey and Jordan. Neither the United States nor Britain objected to these sales to staunch Middle East allies until Mr. Hussein's government began making similar oil shipments to Syria. Only then did Washington protest the deals, the experts said.
Regardless of the route through which this oil reached world markets, the United States was the single largest importer under the United Nations program, with as much as half the oil in certain periods processed at American refineries for sale in this country.
During the first seven months of 2002, the United States imported an average of 566,000 barrels a day from Iraq, with big importers including ExxonMobil, ChevronTexaco, Valero Energy and Koch Petroleum, according to the Energy Department.
These American companies acquired the oil after it passed through a complicated route of trading concerns and intermediaries. The Duelfer report said that Bayoil, a Houston-based trading company, and Oscar S. Wyatt Jr., a prominent Texas energy investor with a long history of dealings in Iraq, were among those who received vouchers to buy Iraqi oil under the program. Their receipt of these oil allocations does not mean that they did anything illegal.
Mr. Wyatt did not respond yesterday to requests for comment, and messages left at Bayoil's offices were not answered.
Illustrating the convoluted way Iraqi oil reached the United States, the Energy Information Administration estimated in late 2002 that about 30 percent of it was first sold to Russian companies, with the rest bought by companies from nations including Cyprus, Sudan and Pakistan.
The Iraqi oil was resold to intermediaries who then marketed it internationally, largely to American oil companies. For example, in 2001, the energy administration estimated that significant amounts of Iraqi crude oil wound up at American refineries, some of which had been built decades ago in part to handle Iraqi blends.
Almost 80 percent of crude oil from the Basra region and more than 30 percent of oil from Kirkuk went to the United States in 2001, according to the energy administration. Imports of Iraqi oil under the program grew from an average of 89,000 barrels a day in 1997, to a peak of 795,000 barrels in 2001, and then declining to 459,000 barrels a day in 2002, the Energy Department said.
Oscar S. Wyatt Jr., a Texas energy investor, was
among those who received vouchers to buy Iraqi oil.
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If the name of a "Big Money" Political Party Donor with ties to Enron were discovered on the Saddam's Coalition of the Bribed, what do you think would happen to the Candidate of that party?
What if that Candidate of that Party was John Kerry?
Newsweek drops a bombshell on the Kerry Campaign: Texas Oil Baron and Big-Time Democrat Donor Oscar Wyatt has received perhaps as much a $22 million dollars in profits through oil allocations bought illicity from Saddam Hussein.
From MSNBC: United Nations: Oil-for-Food Fiasco?"
Law-enforcement sources say Americans who participated in alleged oil-for-food scams also may face further investigation. The CIA deleted from Duelfer's report names of Saddam's U.S. oil-for-food favorites. But an uncensored copy of the Duelfer report obtained by NEWSWEEK indicates Houston oil mogul Oscar Wyatt got oil allocations from Saddam which could have earned him and Coastal Corp.?a company he founded and ran until 2000?profits of more than $22 million. Wyatt and wife Lynn are major donors to political causes: since 1989 they have given nearly $700,000 in contributions, of which more than $500,000 went to Democrats. Wyatt told NEWSWEEK that his company did buy oil from Saddam but that he never did so personally, and that his company's dealings all complied with U.N. rules. ?Mark Hosenball and Steve Tuttle
Who is Oscar Wyatt? More than just a oil man, he's an outspoken critic of both Gulf Wars, and a big time Democratic Party Donor...
As per Houston's Clear Thinkers:
The 10-K also disclosed that one of El Paso's units has been subpoenaed by a grand jury from the U.S. District Court for the Southern District of New York to produce records regarding the United Nations' Oil for Food Program governing sales of Iraqi oil. The unit, El Paso CGP Company, was formerly Coastal Corp., which the company acquired in January 2001. The former chairman of Coastal -- Oscar Wyatt -- was an unabashed critic of Operation Desert Storm in the first Persian Gulf War and has been a vocal public critic of El Paso's management over the past several years.
Wyatt appears to have used his ill-gotten gains wisely - buying the leftovers of Enron.
According to New Age Business:
Enron said that the company and the Official Unsecured Creditor's Committee decided the CCE offer was best. Enron previously had said NuCoastal LLC, a company run by Texas billionaire and Coastal Corp. founder Oscar Wyatt Jr. had offered $2.2 billion in May.
So how does this affect Kerry? Well, perhaps we should couch it in terms even the Old Press can understand:
Big Oil, bribed by Saddam Hussein, helped pay for John Kerry's Campaign. Money used to buy Hussein's army's guns helped pay for John Kerry's campaign. Guns used to kill American Soldiers helped pay for John Kerry's campaign...
This may explain why John Kerry thinks the war in Iraq was a mistake. I believe the mistake may be his.
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