Volcker accuses European groups of kickbacks

By Mark Turner 
October 28, 2005
Financial Times
Original Source: http://news.ft.com/cms/s/5d753a94-474f-11da-b8e5-00000e2511c8.html

DaimlerChrysler, Siemens and Volvo were among a number of companies that paid kickbacks for contracts with Saddam Hussein's regime in Iraq, the final Volcker report into the United Nations oil-for-food programme has alleged.
More than 2,000 companies from 66 states were involved in illicit payments, whether on oil purchases or goods sales, which allowed Iraq to raise $1.8bn in illicit revenue, found the independent UN investigation led by Paul Volcker, a former US Federal Reserve chairman.
As the scheme took shape in 2000, the [UN] secretariat, the Security Council and UN contractors failed most grievously in their responsibilities, he said.
The report claims Wolfgang Denk, an area manager at DaimlerChrysler, agreed in 2001 to pay a 10 per cent kickback on a contract to sell an armoured van to Iraq, worth DM13,000, and submitted an inflated contract price to the UN.
DaimlerChrysler did not disclose this agreement or any documents in response to the committee's request, the report says. DaimlerChrysler told the committee it did not knowingly pay a kickback.
The Volcker committee said three subsidiaries or affiliates of Siemens, the German electronics company, also paid kickbacks to the Iraqi regime in order to obtain programme contracts.
Siemens told the committee it could not confirm the allegations and felt the conclusions were
 premature and unjustified.
Volvo Construction Equipment, a subsidiary of the Swedish vehicle maker, 
knowingly caused IEG [a Jordanian agent] to pay kickbacks in connection with a ¬ 6.6m contract to sell loaders to the Ministry of Housing, the report says. Volvo said IEG acted in its own name, for its own account, at its own expense.