Billions lost with loopholes in the Oil-for-Food programme

times online ^ | 4/22/03

[knak]

KICKBACKS from Iraq’s oil sales have run into billions of dollars because of loopholes in the United Nations Oil-for-Food system designed to feed the Iraqi people. Diplomats said yesterday that Saddam Hussein’s regime sometimes exacted an illegal surcharge of as much as 55-75 cents (30-45p) a barrel on its daily oil sales of some two million barrels under the programme, although the amount was generally 15-25 cents.

“We thought they were getting at least $500 million a year in illegal kickbacks,” one Western official said.

The money funnelled to Baghdad helped to finance its banned weapons programmes, but it could also have been used to buy influence abroad.

Iraq was able to choose which companies were awarded lucrative contracts to export oil or to import food, medicine or other humanitarian supplies.

The main beneficiaries were companies from Saddam’s political protectors at the United Nations, some of them trading companies with little more than a brass plate on the door.

Over the seven years of the Oil-for-Food programme, Russian companies got $7.3 billion worth of Iraqi business, almost twice as much as firms from any other country. Next on the list of leading trading partners were Egypt, with $4.3 billion; France, with $3.7 billion; and Jordan, the United Arab Emirates and China with some $3 billion each.

Diplomats said that British firms won “minimal” business, almost all of it in the health sector, worth a couple of hundred million dollars over the life of the programme.

The Oil-for-Food programme began operation in 1996 after Iraq agreed to allow the UN to supervise its oil sales and the purchases of food and medicine it made with the revenue.

All oil contracts have to be approved by the UN sanctions committee, made up of the 15 Security Council members. The money is deposited in a UN escrow account at the Banque Nationale de Paris, where it can be spent to purchase goods approved by the sanctions committee.

Over the years the Security Council lifted any restriction on the amount of oil that Iraq could sell and the oil price rose, sending Baghdad’s oil revenues up to an annual rate of some $20 billion.

During the same period the council progressively lifted sanctions on civilian goods that could be purchased with the oil money.

Under the rules, Iraq can buy anything except military equipment, unless it is on a “goods review list” of dual-use items that require specific sanctions committee approval.

The opportunity for siphoning off money from Oil-for-Food business arose because of the difficulty of setting a realistic price for Iraq’s crude.

The oil price is established by UN oil “overseers”, who try to make it track the world market. The contract price must then be approved by the sanctions committee, where any single member can block it.

There were originally three overseers, but the US and Norwegian members quit, leaving only a Russian who was sometimes criticised for setting the price too high. For several years, Russia blocked new replacements. But Moscow eventually relented. Iraq was able to exploit price fluctuations to ensure that the UN-fixed price allowed enough margin for extra profits to be skimmed off.

Britain led a campaign last year to change the UN system to “retro-active pricing”, so that actual, rather than predicted, market conditions were taken into account. The result has been that illegal surcharges were reduced, before the war, to an estimated three to five cents a barrel.

Diplomats also suspect that Iraqi officials profited from trading on the world oil markets on inside information from Baghdad's oil decisions, such as its frequent moves to suspend and resume pumping crude.

The Oil-for-Food programme has a budget that is many times larger than that of the UN secretariat itself, yet it operates in great secrecy.

Although all oil contracts have to be approved by the sanctions committee, the body meets behind closed doors and details of transactions are not made public.

Members of the sanctions committee say that some 1,129 companies from 86 countries are registered with the UN to do Oil-for-Food business.

The UN escrow account currently holds some $10.3 billion earmarked for such items as $437 million of health-related material, $513 million of water and sanitation gear and $1.3 billion of electrical equipment.

A quarter of Iraq's oil revenues are set aside to settle claims from the first Gulf War and a further 3 per cent goes to finance the UN weapons inspection effort in Iraq and other administrative costs.

[knak]

that's an awful lot of kickbacks

[xm177e2]

Business as usual for the corrupt UN. America is one of the few countries that actually tries to fight corruption, most people in the world are just fine with it.

[Grampa Dave]

Thanks, this has been bookmarked.

[backhoe]

Cross-link:

http://www.freerepublic.com/focus/f-news/895857/posts
UN OIL FOR FOOD PROGRAM REPORT (what UN is really raking in) 2/22-28/03
The United Nations ^ | 4/03 | UN

[Grampa Dave]

Here is another excellent story for your indexing.

[Grampa Dave]

You beat me by seconds.:)

[Grampa Dave]

fyi

[joesnuffy]

Ya mean Canada turned on us...for free....Maybe France threw them a bone...

[Grampa Dave]

The latest on how the UN Oil for Food was feeding all the wrong people and not the poor Iraqis.

[Grampa Dave]

Time to break out all of your get out of the UN stuff!

[Cicero]

This is beginning to come out in England. When will the US media admit that the UN isn't perfect?

[Carolina]

Who sits on the Sanctions Committee?

[backhoe]

Who sits on the Sanctions Committee?

Duh! I have no idea!

[mewzilla]

FOX had a sound bite from the Oil for food program's Bevan Sevan tonight. Sevan said the program had been audited over 100 times and that Security Council members got reports. If this is true, then I'd say a whole nother can of worms has been opened up....

[mewzilla]

Here's the UN's offical statement on audits. It's about a third of the way down the page. Mentions an independent, external board and an internal board (yeah, right). But doesn't name any names. Inquiring minds want to know.

[Bigun]

Sorry but the Times is WRONG here! Koffi and associates know were EVERY penny went so nothing has been "lost"! ;>)

[NEWwoman]

Follow the $$$$.

[DoughtyOne]

back by popular demand
 

 

 

[Grampa Dave]

Good! I couldn't believe that you were passing up all of these great targets of opportunity to "Bomb" the UN.

This story must not be allowed to die because the left wing mediots refuse to carry it.

[HighRoadToChina]

Surprise, surprise, surprise BUMP!

[mewzilla]

So who did the audits if any were done? Did the Security Council members really sign off on them? Who knew what and when did they know it...?

[GailA]

MASTER LIST MASTER LIST

[Vinnie]

According to Rush today, the UN gets 2 1/2% of the sales also.

No wonder they don't want the 'program' to stop.

[PhilDragoo]

Russia $7.3 billion; France $3.7 billion; China $3 billion.

Kofi Annan $?

"Oil for Food"--The embezzlers got oiled; the Iraqis got starved.

America has been slammed at every turn by the leftist press and maggots from Clooney to Murray.

And the talking clymers refuse to acknowledge the warehouses of food Saddam kept from the people.

Throw Kofi from the train and demolish the UN complex.

Bring over several C-17 Galaxies full of looters and tape the biggest reality show of the season.

"Alright, people, you will be locked up in the UN Plaza for ten days with only diplomats to eat. At the end of that time you can have all the desks, chairs and file cabinets you can carry. Go!"

[BOBTHENAILER]

The UN escrow account currently holds some $10.3 billion earmarked for such items as $437 million of health-related material, $513 million of water and sanitation gear and $1.3 billion of electrical equipment.

There was once a Senator from Alabama or some neighboring state (15-20 years ago), whose son got nailed by the feds on a big dope charge. The senator tried to bribe a fed judge and got caught. His comment after getting caught is perfect for this scenario.

"This is like stirring a bucket of sh!t, the more you stir it, the more it stinks.

[BOBTHENAILER]

My post 26 was meant for you.

[ATOMIC_PUNK]

bumps

[harpo11]

President George W. Bush not only took down the Taliban, Saddam's evil dictatorship, but has fully pulled open the curtain that has hidden the truth behind the corruption of the UN.

Is it any wonder if rumors can be believed that the former impeached prez #42 is heard to be interested in running this mobster clan?

[Ethyl]

President George W. Bush not only took down the Taliban, Saddam's evil dictatorship, but has fully pulled open the curtain that has hidden the truth behind the corruption of the UN.

Is it any wonder if rumors can be believed that the former impeached prez #42 is heard to be interested in running this mobster clan?


We can't let this die! We have to carry on the montra, and GET THIS OUT! How to get the media to reveal this?

[Publicus]

Speaking of kickbacks...

1. Do you believe YOUR hard earned tax money should be used by Ithaca officials to fund private development projects- even if they are not, repeat NOT, even commercially viable in their own right?

2. Do you believe YOUR hard earned tax money should be used by Ithaca officials to pressure a productive, law-abiding citizen to abandon his livelihood and business he has painstakingly built over 15 years?

3. Do you believe YOUR hard earned tax money should be used by Ithaca officials to threaten a productive, law-abiding citizen to sell his property to a friend of theirs otherwise they will seize the property using eminent domain?

4. Do you believe YOUR hard earned tax money should be used by Ithaca officials to facilitate the sale of the woman's ownership share in the property WITHOUT her prior knowledge nor permission nor any compensation to her?

5. Do you believe YOUR hard earned tax money should be used by Ithaca officials to fund kickbacks to the perpetrators of illegal acts- i.e. rewarding them for their crimes with YOUR money?

If your answer is no to ANY of the foregoing questions, call the Ithaca officials involved (below) and let them know.
--

Alan J. Cohen Phone: (607)274-6501
Email: mayor@cityofithaca.org

Ithaca Common Council Member Paulette Manos
Phone: (607) 273-4170
Email: paulettem@cityofithaca.org

Ithaca Common Council Member Susan Blumenthal
Phone: (607) 272-3931
Email: susanb@cityofithaca.org

Ithaca Common Council MemberPatricia Pryor
Phone: (607) 273-1741
Email: patp@cityofithaca.org

Ithaca Common Council Member David Whitmore
Phone: (607) 273-1254
Email: davidw@cityofithaca.org

Ithaca Common Council Member Diann Sams
Phone: (607) 277-8188
Email: dianns@cityofithaca.org

Ithaca Common Council Member Patricia Vaughan
Phone: (607) 273-3870
Email: patv@cityofithaca.org

Ithaca Common Council Member Carolyn Peterson
Phone: (607) 272-8129
Email: carolynp@cityofithaca.org

Ithaca Common Council Member Peter Mack
Phone: (607) 253-7070
Email: peterm@cityofithaca.org

Ithaca Common Council Member Daniel Cogan
Phone: (607) 273-2076
Email: dcogan@cityofithaca.org

Ithaca Common Council Member Edward Hershey
Phone: (607) 272-0590
Email: enh2@cornell.edu

[Publicus]

Thanks for posting the article.

[Publicus]

Thanks for posting the article.

[timestax]

Business as usual for the corrupt UN. America is one of the few countries that actually tries to fight corruption, most people in the world are just fine with it.

Yep, especialy the DemoncRATS...they demand corruption out of their candidates, and "leaders".

[ellery]

bttt

[Carolina]

Re: the membership of the Sanctions Committee

Hey, backhoe! I have been reading tons of documents since I asked you that question last night. I haven't yet found the answer.

It's interesting that the complaints against the sanctions committee have been directed against the US and UK for our demands for more stringent controls over contracts AND verification of use for the money.

No surprise that leftists were complaining about the sanctions starving the Iraqis and the "obstructionist tactics" of the Americans and the Brits.

I'll keep reading.