Europeans accused in Iraq report
May 12, 2005
From Phil Hirschkorn
CNN Senior Producer
NEW YORK (CNN) -- A U.S. Senate committee probing the defunct U.N. oil-for-food program in Iraq alleges that two politicians from Britain and France received millions of dollars worth of oil allocations from Saddam Hussein's regime.
Both men have denied the allegations.
A report released Thursday by the Senate Government Affairs Permanent Subcommittee on Investigations asserted that France's Charles Pasqua and Britain's George Galloway each were granted millions of barrels of oil allocations by Saddam to thank them for their positions in favor of loosening economic sanctions against Iraq.
Pasqua is a former French interior minister in charge of law enforcement and an ally of French President Jacques Chirac. Galloway was just re-elected to Britain's parliament.
The Senate committee's report said that between May 1999 and December 2000, Pasqua was granted 11 million barrels of oil, which he steered to a Swiss company called Genmar, which took delivery of the oil.
The report did not allege how much money Pasqua may have made on the deals but asserted in general that gatekeepers to the Iraqi oil typically pocketed a commission of 3 to 30 cents a barrel.
The committee alleged that Galloway received allocations for 20 million barrels from June 2000 to June 2003 and arranged for two companies, Aredio Petroleum-France and Middle East Advance Semiconductor, to take delivery of the crude.
The president of Middle East ASI was a Jordanian businessman named Fawaz Zureikat, who according to the Senate report was the benefactor of a UK charity started by Galloway.
Galloway established a foundation in 1998, Mariam Appeal, that raised more than $3 million to send medical aid to Iraqi children and to campaign for the lifting of sanctions on Iraq, and about half the funds came from Zureikat, according to an official UK probe cited by the committee.
The foundation was named for a 4-year-old Iraqi girl stricken with leukemia.
Some evidence indicates that Galloway appeared to use a charity for children's leukemia to conceal payments associated with at least one such allocation, the committee report said.
In a statement from London Thursday, Galloway disputed the committee's findings.
I have never traded in a barrel of oil, or any vouchers for it ... and no one has acted on my behalf, trading in oil -- Middle Eastern, olive, patchouli or any other -- or in vouchers, whatever they are, he said.
This is a lickspittle Republican committee, acting on the wishes of George W. Bush, Galloway said.
British Prime Minister Tony Blair, asked at a Thursday news conference if Britain would investigate the allegations, said: We've no plans to do that.
The subcommittee, chaired by Minnesota Republican Norm Coleman, is one of a handful probing oil for food and pushing for U.N. reform.
An independent panel led by former Federal Reserve chairman Paul Volcker and appointed by the United Nations plans a final report in the summer.
Galloway told The Guardian newspaper in Britain that the Coleman subcommittee has never spoken to me, never written to me, and never asked me a single question.
Galloway told the newspaper the report is merely the repetition of false accusations that have been made and denied before.
The committee based its findings about Pasqua and Galloway on Iraqi Oil Ministry documents and correspondence and recent investigator interviews with a number of former high-ranking Iraqi officials, including former vice president Taha Yassin Ramadan and former deputy prime minister Tariq Aziz.
Galloway met with Saddam and Aziz when they were in power and staunchly opposed the 2003 war with Iraq led by the United States and Britain. He has repeatedly denied that his anti-war efforts were financed in any way by Iraq.
But the Senate report quoted Ramadan as saying last month that Galloway received oil allocations because he wanted to lift the embargo against Iraq.
Galloway, 51, from Scotland, was re-elected to the British parliament on May 5 on an anti-war platform. He is a former Labour MP who was expelled from the party for urging British soldiers not to fight in Iraq.
Iraqi officials referred to the oil allocations as the Saddam Bribery System, the report said.
Under the oil-for-food program, Saddam chose the buyers of his oil and the vendors from whom he purchased food, medicine, and supplies.
Friendly relations
Pasqua, 78, had a long history of friendly relations with Iraq, and in the 1990s he advocated restoring economic ties. In 1993, he met with Aziz in Paris when Aziz went to France for medical treatment.
All the contracts were approved by the U.N. Security Council, which over seven years managed $64 billion in proceeds held in an escrow account.
Companies in the three Security Council nations friendliest to Iraq -- Russia, France and China -- received a majority of oil allocations.
Saddam abused the program by imposing surcharges on the oil of about 25 cents a barrel and by extorting kickbacks of 10-15 percent on goods purchased -- illicit funds that willing vendors deposited in bank accounts controlled by Iraq.
Pasqua and Galloway were among a list of 270 people and companies first published in a Baghdad newspaper last year as having received oil allocations.
The list included Houston oil and gas businessmen David Chalmers and Iraqi-American Samir Vincent, who have both faced federal criminal charges.
Chalmers is accused of paying surcharges to Iraq to secure oil deals. Vincent pleaded guilty to illegally lobbying U.S. and U.N. officials for Iraq.
Last year, Galloway won a libel suit against the UK's Daily Telegraph newspaper stemming from an article, relying on apparently forged documents from the early 1990s, that alleged that Galloway received direct payments from Iraq.
The Senate committee stated that the documents supporting its findings date from 2001 and have no relation to documents cited in the Telegraph article that a British court deemed defamatory.
The evidence examined by the subcommittee indicates that Galloway was granted oil allocations that would have to be monetized through complex oil transactions, the report said.
The oil-for-food program was launched in late 1996 to aid Iraqi citizens adversely impacted by economic sanctions imposed after Iraq invaded Kuwait on 1990. It delivered more than $40 billion of humanitarian goods and paid for U.N. weapons of mass destruction inspections and war reparations to Kuwait.
But Saddam is estimated to have pocketed $2 billion to $4.5 billion in surcharges and kickbacks, as well as an estimated $6 billion to $8 billion that bypassed the U.N. program by selling oil to neighboring Jordan, Turkey, and Syria, all with U.S. approval in an effort to bolster its Mideast allies.