Oil-for-Food Report Alleges Officials Gained
Hussein tried to buy influence by giving discounted petroleum rights to figures in Britain and France, a Senate panel says.
By Maggie Farley
Times Staff Writer

May 12, 2005

UNITED NATIONS — Senate investigators examining corruption in the U.N.'s oil-for-food program for Iraq released a report Wednesday alleging that Saddam Hussein tried to buy the influence of two senior officials of Britain and France.

The names of former French Interior Minister Charles Pasqua and British politician George Galloway emerged more than a year ago on a list of influential people who allegedly were granted the right by the Hussein government to buy discounted oil to sell at a profit. The Senate report contains new testimony from Iraqi officials and documents from Iraq's Oil Ministry.

One letter from an Iraqi oil official included in the report says Pasqua's aide asked Iraq to channel his oil through a Swiss company because Pasqua feared political scandal. An Iraqi Oil Ministry document said Galloway appeared to use a charity for child leukemia to shelter money from an oil transaction. 

Pasqua and Galloway have denied that they received oil allocations from the Iraqis or profited from oil trades, and their statements were included in the Senate report. Spokesmen for the French and British missions at the U.N. declined to comment.

The bipartisan Senate Permanent Subcommittee on Investigations is one of five congressional groups examining the United Nations' $64-billion aid program, which was meant to ease the effect of sanctions on Iraq from 1996 to 2003. 

Rather than grant contracts to energy companies, Iraq allocated oil rights to prominent foreign officials who the regime believed could rally international support for Iraq and against U.N. sanctions, said senior Iraqi officials interviewed by the committee. The recipients could then sell the rights to oil traders.

This report exposes how Saddam Hussein turned the oil-for-food program on its head and used the program to reward his political allies, like Pasqua and Galloway, said Sen. Norm Coleman (R- Minn.), chairman of the subcommittee, who has called for Secretary-General Kofi Annan to resign over the mismanagement of the humanitarian program. 

The Senate investigators questioned former Iraqi officials now in custody, including former Deputy Prime Minister Tarik Aziz and former Vice President Taha Yassin Ramadan. The report also draws on interviews with former regime officials conducted by the Treasury Department's Iraqi Financial Asset Team, which has been trying to trace the money allegedly kicked back in the oil-for-food program.

Ramadan, who led a committee that designated oil rights recipients every six months, called the allocations compensation for support. 

Pasqua, the former French minister, was a vocal supporter of restoring economic ties with the Hussein regime, the report says. It includes documents from the Iraqi Oil Ministry allegedly awarding Pasqua the rights to 11 million barrels of oil.

The report also includes a June 1999 letter from the State Oil Marketing Organization to the oil minister that says Hussein approved an oil allocation to Pasqua. It asks for advice on dealing with a request by Pasqua's agent to conceal the French official's involvement.

The letter alleges that Pasqua's diplomatic advisor, Bernard Guillet, asked Iraq to channel the oil through a Swiss offshore company called Genmar but refused to provide a written request, fearing political scandal.

Asked last month about claims that he had traded in Iraqi oil, Pasqua told Associated Press: Of course not. All of that is ridiculous.

Guillet, whose name was also on the list of officials who allegedly received oil rights, was arrested last month in France, accused of influence peddling in the oil-for-food program.

The Senate report also implicates Galloway, a member of the British Parliament, a longtime supporter of Iraq and an outspoken critic of the 2003 invasion, which Britain mounted with the United States. Galloway met with Hussein several times.

Iraqi Oil Ministry documents cited in the report say that Galloway received allocations for 20 million barrels of oil and quotes an Iraqi official testifying that Galloway used Middle East Semiconducting Co. to broker the oil rights' sale. The firm's owner, Fawaz Zureikat, also donated about $760,000 to a foundation chaired by Galloway that was designed to help an Iraqi girl suffering from leukemia.