Report on Oil-for-Food Scheme Gives Details of Bribes to Iraq 
By Doreen Carvajal and Andrew Kramer
October 28,2005
The New York Times
Original Source: http://www.nytimes.com/2005/10/28/international/28companies.html

PARIS, Oct. 27 - An independent report on the United Nations' $64 billion oil-for-food program for Iraq shed light Thursday on a circle of political aides and fixers in Russia and France who the report said made company connections, paid kickbacks and reaped benefits through contracts granted by the government of Saddam Hussein.
The report by a committee led by Paul A. Volcker, named major multinational companies as well as individuals who were involved.The committee reported that the Iraqi government developed a policy of favoring France, as well as Russia; it considered France a friend for opposing the United Nations' sanctions against Iraq. Other companies from different countries tried to reposition themselves with French connections and the help of well-placed people.
The findings cast a harsh spotlight on a circle of people who, investigators said, manipulated the system and gained favors from the Iraqi government for opposing sanctions.
Tariq Aziz, who at the time was Iraq's deputy prime minister, told investigators that beneficiaries received oil barrel allocations based on their level of opposition to the sanctions.The report is filled with records of transactions kept by Iraqi officials who demanded special surcharges. DaimlerChrysler is listed as paying $7,000 for a $70,000 contract, while Volvo Construction Equipment in Brussels paid $317,000 in extra fees for a $6.4 million contract.
The report also cited Banque Nationale de Paris, or B.N.P., for playing a double role in handling the oil-for-food escrow account, but not revealing knowledge about certain financial relationships that enabled the payment of illegal surcharges. B.N.P., however, issued a company statement that the illicit surcharges were detected only through the enormous investigative efforts of the Volcker committee and the C.I.A.. The bank called it unjustified to suggest that alleged deficiencies in its screening of payments contributed to illicit surcharges.
In Russia, the outline of the system was already known, but the report provided new information tying Russian energy companies to cash payments to the Iraqi Embassy. 
One-third of the oil exported from Iraq through the program ended up in the hands of Russian companies, the report said. Russia had argued for lifting the sanctions.
An Iraqi document accompanying the report contended that Russian companies including Lukoil, the country's largest private energy company, and TNK, now merged in a joint venture with BP, paid surcharges in cash to the Iraqi Embassy in Moscow.
The embassy accepted $52 million between March 2002 and December 2002, the report contended.
The money was packed in red canvas diplomatic bags sealed with wax and sent by diplomatic courier, the report said. Each bag could hold $1.5 million in $100 bills.
The report said that three Siemens companies Siemens-France, Siemens-http://topics.nytimes.com/top/news/international/countriesandterritories/turkey/index.html?inline=nyt-geo \o More news and information about Turkey. Turkey and Osram Middle East knowingly paid kickbacks of at least $1.6 million. There was no response from Siemens in the report.
Weir Group, an engineering services company based in Scotland, made about $4.5 million in illicit payments to the Iraqi government, the report said. The report said that when Iraq's regular customers balked in late 2000 at buying oil with surcharges, four oil traders merged to dominate the market.
Bayoil Supply & Trading Limited from the Bahamas, Glencore International from Switzerland, the Vitol Group from the Netherlands and the Taurus Group from New Zealand employed intermediaries in Italy, Liechtenstein, Malaysia and Switzerland to purchase 60 percent of Iraqi oil until the overthrow of Mr. Hussein in 2003.
Afiliates of other American companies were listed in the report, including Coastal Corporation and NuCoastal Corporation.This was a report that came out with a conclusion they set out to come up with, said Catherine Recker, a lawyer for Bayoil U.S.A. Incorporated, a Houston-based oil trading company named as a defendant in an indictment brought by the United States attorney in New York. The company has pleaded not guilty.
Oscar S. Wyatt, a Texas oilman who was also named in the report and owns NuCoastal, was indicted Friday on charges that he paid millions of dollars in kickbacks to obtain rights to sell Iraqi oil. He pleaded not guilty Thursday in Federal District Court in Manhattan.
Doreen Carvajal of The International Herald Tribune reported from Paris for this article and Andrew Kramer from Moscow. Julia Preston contributed reporting from New York and Simon Romero from Houston.