Italian governor to be named in UN's Iraq oil-for-food investigation

By Claudio Gatti
October 26, 2005
Financial Times
Original Source: http://news.ft.com/cms/s/43b6a5a8-45be-11da-981b-00000e2511c8.html
Roberto Formigoni, the governor of Lombardy and one of the top leaders of Forza Italia, the party of Silvio Berlusconi, Italian prime minister, will be one of a handful of international political figures named in the United Nations inquiry into corruption in the Iraqi oil-for-food programme.
UN investigators found no evidence that Mr Formigoni directly benefited from the sale of Iraqi oil. But the Financial Times and Il Sole 24 Ore have learnt that they did find evidence that allocations were received in his name by Cogep, a Milanese firm controlled by the Catanese family.
The independent committee, headed by Paul Volcker, former chairman of the Federal Reserve, is due to publish details of the role of foreign companies and individuals in the scandal when it releases its final report tomorrow. Through a spokesperson, Mr Formigoni said yesterday: I reiterate what I already said: I never took a single drop of oil,nor a single [Iraqi] dinar.
An official from the Iraqi State Oil Marketing Organization (Somo) said that the minister of oil came back from a trip to Italy in April 1997 mentioning Mr Formigoni as a person who should receive allocations. In June of that year, Cogep was added to the list of beneficiaries of oil allocations.
In the 1990s, up to the invasion of Iraq in 2003, Mr Formigoni was one of the most prominent voices in the campaign to lift the embargo against Saddam Hussein's regime.
More than 25m barrels appear to have been assigned to the governor of Lombardy. Investigators found evidence that Marco Mazarino de Petro, a friend and political associate of Mr Formigoni, received more than $700,000 in commissions from the sale of of Iraqi oil allocated to Mr Formigoni. Mr de Petro declined to comment yesterday.
It was determined that Mr de Petro went to Baghdad and signed the first contract Cogep received from Somo, something he denied when the FT and Il Sole broke the story of the UN investigation in February this year. Mr de Petro now admits working with Cogep, sending invoices to Cogep and being paid by Cogep.
Cogep paid more than $700,000 in commissions to three Irish, English and Dutch registered shell companies, all called Candonly. In testimony to the Volcker committee, Mr de Petro admitted being the only person working for Candonly and the only one authorised to give instructions to the fiduciary companies that ran it. One of the Candonly invoices for Iraqi oil commissions was sent to Cogep from Mr de Petro's home fax machine.
UN investigators discovered that at least $60,000 out of the $943,000 secretly paid by Cogep to the Iraqi regime for its oil came from a Candonly account controlled by Mr de Petro. He says the transfer was in connection with a deal with an Albanian company.
A fax sent on June 8 1998 to Tariq Aziz, the former Iraqi vice-premier, and found by the Volcker Committee states: Following our meeting in Rome, for what I'm grateful to you, since I know that Somo is signing the new contracts, let me to remember to you the names of the Italian oil companies I pointed out to you.
The fax mentioned Cogep and appeared to be signed by Roberto Formigoni, although the signature did not match that of the governor of Lombardy. Mr de Petro admitted to UN investigators that he sent the fax from his home near Genoa, Italy.
The Volcker Committee will say in its report that, despite several attempts, it was unable to obtain the co-operation of Mr Formigoni, who denied receiving oil allocations. Mr de Petro insisted that he did not give Mr Formigoni any of the proceeds from his Iraqi deals.
Claudio Gatti is a New York-based investigative reporter for Il Sole 24 Ore, the leading Italian business daily