February 14, 2005
Senate Investigators Say Iraq Bribed Inspector in U.N. Program
By JUDITH MILLER 

Investigators for the Senate Permanent Investigations subcommittee said yesterday that they had determined that one United Nations-contracted inspector had been bribed to help Iraq export more oil than was authorized under the oil-for-food program.
The investigators said they would present at a hearing tomorrow what they called overwhelming evidence that an inspector employed by Saybolt International, the Dutch company hired to monitor oil exports under the program, was given more than $100,000 to help the former Iraqi government export more than $9 million worth of oil outside of the program in 2001.
If confirmed, the payments would be the first documented instance of a United Nations inspector for a major contractor having been bribed by Saddam Hussein's government. At least five United States Congressional committees, the Justice Department, and an independent panel headed by Paul A. Volcker are investigating the oil-for-food program, which ended in 2003 and allowed limited oil sales so Iraq could buy crucial aid goods to alleviate the effects of sanctions. 
Senate investigators said their inquiry had not found other instances of bribery involving Saybolt or other contractors in the program.
According to two letters in Arabic from Iraq's former oil minister, payments totaling $105,819 were authorized by the leader God saves, or Saddam Hussein, to a Portuguese oil inspector named Armando Carlos. The letters say the money was for the man's services in helping a French company export two extra shipments of Iraqi oil in 2001 that were not authorized by the oil-for-food program. Copies of the letters were provided to The New York Times by Iraqi critics of the program.
Saybolt officials have confirmed that an employee was being investigated in the case, and a records search listed one of the company's inspectors as a Portuguese man named Armando Carlos Oliveira. In response to questions yesterday, Senate officials confirmed that Mr. Oliveira was the focus of their investigation.
Contacted in Portugal by telephone yesterday, Mr. Oliveira, who identified himself as the manager of Saybolt's operations in the country, denied that he had received payments from Iraq or that he had ever worked there. 
Saybolt did not respond to numerous e-mail and telephone messages left at its Dutch headquarters, with its Washington lawyers, and at an office in Houston. In testimony before a House committee in October, Peter W. G. Boks, the company's managing director, said it had investigated reports that one of its inspectors had permitted topping off - the loading of unauthorized oil onto an approved oil shipment - but had found no evidence that Saybolt inspectors were aware of the additional unauthorized loadings. 
Mr. Boks also said the company had concluded that it was extremely unlikely that other instances of such unauthorized shipments had occurred.
Allegations that a Saybolt inspector had received a bribe were first reported by The Wall Street Journal in October. The Financial Times reported Saturday that documents identified Armando Carlos Oliveira as the employee who had been offered money. 
Senate investigators said yesterday that they would present overwhelming evidence in the hearing tomorrow that Mr. Oliveira had worked in Iraq as a United Nations oil inspector and had accepted money from Saddam Hussein. They said Saybolt officials would testify at the hearing. 
In a separate statement issued in response to Mr. Oliveira's denial, Senator Norm Coleman, the Minnesota Republican who is chairman of the Senate investigations subcommittee, said: These are grave allegations. We are going to present evidence to shine light on the issue. We must keep in mind that the bribe of a U.N. oil inspector is troubling in and of itself, and to make matters worse, it allowed Saddam to generate millions of dollars under the table and outside of U.N. control. 
Senator Coleman has been among the most vehement critics of the oil-for-food program and the United Nations officials who ran and oversaw it. He has called for the resignation of Kofi Annan as United Nations secretary general.
Mr. Annan, speaking to David Frost of the BBC in an interview broadcast yesterday, said he would not resign and intended to press forward with reforms of the United Nations. 
Resignation is not on the cards for me at the moment, Mr. Annan said of investigations that have already prompted the suspension with full pay of the program's former director and another senior United Nations official.
I think when the report comes out the public will begin to understand how complex this scheme was, Mr. Annan said. He said the program was a political arrangement, a transaction intended to force Saddam Hussein to comply with inspection requirements, disarmament requirements, and in the process concessions were also made to him.
Mr. Annan said those concessions were made because Mr. Hussein was resisting the program and indifferent to the suffering of his own people. In retrospect one may criticize it, but at the time because of the urgency and the need to help the Iraqi people, some concessions were made, he said.