CIA: U.N.'s Oil-for Food Program Paid Off For Russia 

With Carl Limbacher and NewsMax.com Staff 
Oct. 8, 2004
Newsmax
http://www.newsmax.com/archives/ic/2004/10/8/140946.shtml
The scandal-ridden U.N. Oil-for-Food program, dubbed the Weapons of Mass Corruption scam by Reuters, paid off handsomely for Russia, putting a reported $130 million into the pockets of Russian government officials, political leaders and companies while helping Saddam Hussein swindle a massive $11 billion from what was intended to be a humanitarian program. 
Moreover, Saddam was able to use the loot from the program to buy such items as barrels for anti-aircraft guns, missile components and missile-guidance electronics from various Russian companies, according to the 1,000-page Duelfer Report just released by the CIA. 


Today's Moscow Times reported that beginning in 2000 at the latest, more than two dozen Russian officials and companies began funneling money to Hussein-controlled bank accounts in exchange for lucrative vouchers to sell Iraqi oil. 
The vouchers were then sold to traders approved to operate within the United Nations' Oil-for-Food program, according to the CIA report. 
The Times says that secret lists kept by Iraq's Oil Ministry and Hussein's vice president name the Russians who participated in the scheme. 
They included former Kremlin Chief of Staff Alexander Voloshin, former Federation Council Speaker Yegor Stroyev, former Fuel and Energy Minister Yury Shafranik, Communist Party chief Gennady Zyuganov, LDPR leader Vladimir Zhirinovsky and Kirsan Ilyumzhinov, leader of the southern Buddhist republic of Kalmykia. 
Others enjoying access to the slush fund were Russia's Foreign Ministry, the Emergency Situations Ministry, the pro-Kremlin Unity Party, Kremlin-controlled energy firms Gazprom, Zarubezhneft and Rosneft, state-owned trading company Machinoimport, private oil company TNK, and Alfa Eco, a subsidiary of the powerful Alfa financial-industrial group. 
Also implicated was the Putin administration. 
The Oil-for-Food program, which got under way in 1996 and ended in 2003 after Saddam was ousted, allowed Iraq to sell a limited amount of oil to traders approved by the U.N. 
The proceeds were to be used to buy such humanitarion goods as food and medicines for ordinary Iraqis harmed by U.N. sanctions. 
Saddam, however, abused the program by awarding vouchers for the right to purchase tens of millions of barrels of Iraqi oil at bargain-basement prices, with Saddam getting a piece of the action when the vouchers were sold at market prices, the report says. 
Saddam personally approved and removed all names of voucher recipients, the report says. [These vouchers] provided Saddam with a useful method of rewarding countries, organizations and individuals willing to cooperate with Iraq to subvert U.N. sanctions. 
According to Duelfer Iraq generated an estimated $2 billion from illicit oil sales and other kickbacks from companies and individuals from numerous countries, mainly from U.N. Security Council permanent member countries Russia, France and China - in that order. 
The Times notes that Russia received 32 percent of all the Oil-for-Food contracts, twice as much as France, the next country in line for the loot. 
In the beginning, the program was more or less honest, but starting around September 2000 Iraq changed the rules of the game by putting in place a mandatory 10-cent-per-barrel surcharge for oil allocations. 
That money would go to Saddam-controlled bank accounts in Iraq, Jordan and Lebanon, or delivered in cash to Iraqi embassies, the most popular of which was in Moscow, the report says. 
The CIA report largely agrees with a list prepared for the Iraqi Governing Council and obtained by the Moscow Times. 
That report says Saddam Hussein gained the indebtedness of the Russian Federation through oil allocations, along with Russia's weight and leadership on the world stage as well as its permanent membership on the Security Council. 
The Times reported that With two notable exceptions, each of the dozen or so government bodies, companies, political parties and individuals contacted by the newspaper denied wrongdoing. 
All oil majors were involved in this, an official from one of the oil companies listed in the report said. The state played a large role. Almost all - no, not just almost all - all companies that took part in Iraq projects were connected to this, an official at one of the oil companies identified in the report told the Times. 
One of the more creative denials came from a spokesman for Kirsan Ilyumzhinov, the controversial president of Kalmykia, who the CIA says earned $300,000 from illicit oil sales, who denied any impropriety. It was all about ... chess! 
Buyancha Galzanov told the Times, As for Ilyumzhinov's visits to Iraq in the 1990s and early 2000s, they were dedicated to issues related to the organization of international chess tournaments or the economic issues of Kalmykia. 
There was a lot more to the scandal than financial skullduggery, however. 
As reported by Claudia Rosett, the best-informed journalist on the Oil-for-Food scam, a resident fellow at the Foundation for the Defense of Democracies and an adjunct fellow with the Hudson Institute, the program could well be called Saddam Hussein's weapons program. 
Writing in Thursday's National Review Online, Rosett notes that the program allowed Saddam to replenish his empty coffers, firm up his networks for hiding money and buying arms ... and deliberately prep the ground for further rearming ... a depraved ... dangerous mockery of ... a relief program for sick and starving Iraqis. 
Rosett charges that the U.N. provided cover for Saddam to steal, smuggle, deal, and bribe his way back toward becoming precisely the kind of entrenched menace that the U.N. was created, and purported, to prevent. 
And while Duelfer reports that no weapons of mass destruction have been found, Saddam had made a point of preserving the weapons know-how. 
Ominously, Duelfer found that the Oil-for-Food loot would have made it possible for Saddam to restart chemical-weapons production in a matter of months. 
Rep. Joe Barton, who heads one of the assorted congressional inquiries into Oil-for-Food, wrote U.N. Secretary-General Kofi Annan, saying, Given Mr. Duelfer's findings, we now ask for your personal involvement in the expeditious discovery and public release of any information in possession of the United Nations related to the diversion of Oil-for-Food funding into Iraqi chemical weapons programs.