Oil-for-food report details kickbacks paid

October 27,2005http://news.ft.com/c.gif \* MERGEFORMATINET
Financial  Times
Original Source: http://news.ft.com/cms/s/3ea6c5a4-46fc-11da-b8e5-00000e2511c8.html


The independent committee headed by Paul Volcker, former chairman of the Federal Reserve, on Thursday published its final report accusing more than 2,000 foreign companies of paying illegal kickbacks in the oil-for-food scandal.
The now-defunct programme was developed to provide food and medicine to Iraqis while their country was under international sanctions stemming from the first Gulf war in 1990. Saddam Hussein, however, used bribes and kick-backs on sales of oil to foreign governments, companies and individuals to divert about $1.8bn into his own coffers, according to the report.
Foreign entities that took part in the programme included Russia and France and more than 4,000 companies, said the report. 
It accuses more than 2,000 companies of paying the surcharges and kick-backs, including DaimlerChrysler, Siemens and Volvo.
BNP Paribas, the French oil group which held the escrow account for the programme, came under particular attack, with the report accusing it of poor handling of potential conflicts of interest related to the scheme. “BNP was clearly inhibited from disclosing fully the first hand knowledge it acquired of the true nature of financial relationships that fostered the payment of illicit surcharges,” the report said.
Mr Hussein was able to benefit from the $64bn programme because Iraq was able to choose both the recipients of its oil and the suppliers of the food and medicines it received in return. He was thus able to demand surcharges on sales and kickbacks from suppliers.