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The Oil-for-Food Programme (OIP), established by the
United Nations The United Nations (UN) is an intergovernmental organization whose stated purposes are to maintain international peace and security, develop friendly relations among nations, achieve international cooperation, and be a centre for harmoni ...
in 1995 (under
UN Security Council The United Nations Security Council (UNSC) is one of the six principal organs of the United Nations (UN) and is charged with ensuring international peace and security, recommending the admission of new UN members to the General Assembly, an ...
Resolution 986) was established to allow
Iraq Iraq,; ku, عێراق, translit=Êraq officially the Republic of Iraq, '; ku, کۆماری عێراق, translit=Komarî Êraq is a country in Western Asia. It is bordered by Turkey to Iraq–Turkey border, the north, Iran to Iran–Iraq ...
to sell oil on the world market in exchange for food, medicine, and other humanitarian needs for ordinary Iraqi citizens without allowing Iraq to boost its military capabilities. The programme was introduced by United States President
Bill Clinton William Jefferson Clinton (né Blythe III; born August 19, 1946) is an American politician who served as the 42nd president of the United States from 1993 to 2001. He previously served as governor of Arkansas from 1979 to 1981 and again ...
's
administration Administration may refer to: Management of organizations * Management, the act of directing people towards accomplishing a goal ** Administrative Assistant, traditionally known as a Secretary, or also known as an administrative officer, admini ...
in 1995, as a response to arguments that ordinary Iraqi citizens were inordinately affected by the international
economic sanctions Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions are not necessarily imposed because of economic circumstances—they ...
aimed at the
demilitarisation Demilitarisation or demilitarization may mean the reduction of state armed forces; it is the opposite of militarisation in many respects. For instance, the demilitarisation of Northern Ireland entailed the reduction of British security and military ...
of
Saddam Hussein Saddam Hussein ( ; ar, صدام حسين, Ṣaddām Ḥusayn; 28 April 1937 – 30 December 2006) was an Iraqi politician who served as the fifth president of Iraq from 16 July 1979 until 9 April 2003. A leading member of the revolutio ...
's Iraq, imposed in the wake of the first
Gulf War The Gulf War was a 1990–1991 armed campaign waged by a 35-country military coalition in response to the Iraqi invasion of Kuwait. Spearheaded by the United States, the coalition's efforts against Iraq were carried out in two key phases: ...
. The sanctions were discontinued on 21 November 2003 after the
U.S. invasion of Iraq The 2003 invasion of Iraq was a United States-led invasion of the Republic of Iraq and the first stage of the Iraq War. The invasion phase began on 19 March 2003 (air) and 20 March 2003 (ground) and lasted just over one month, including 26 ...
, and the humanitarian functions turned over to the
Coalition Provisional Authority ) , capital = Baghdad , largest_city = capital , common_languages = Arabic Kurdish English (''de facto'') , government_type = Transitional government , legislature = Iraqi Governing Council , title_leader = Administrator , leader1 = Ja ...
. The programme was ''de jure'' terminated in 2003 and ''de facto'' terminated in 2010. Although the sanctions were effective, there were revelations of widespread corruption in the programme and abuse of its funds.


Background and design

The Oil-for-Food Programme was instituted to relieve the extended suffering of civilians as the result of the United Nations' imposition of comprehensive sanctions on Iraq following Iraq's invasion of
Kuwait Kuwait (; ar, الكويت ', or ), officially the State of Kuwait ( ar, دولة الكويت '), is a country in Western Asia. It is situated in the northern edge of Eastern Arabia at the tip of the Persian Gulf, bordering Iraq to Iraq–Ku ...
in August 1990. Security Council Resolution 706 of 15 August 1991 was introduced to allow the sale of Iraqi oil in exchange for food. Security Council Resolution 712 of 19 September 1991 confirmed that Iraq could sell up to US$1.6 billion in oil to fund an Oil-For-Food Programme. After an initial refusal, Iraq signed a memorandum of understanding (MOU) in May 1996 for arrangements to be taken to implement that resolution. The Oil-for-Food Programme started in December 1996, and the first shipments of food arrived in March 1997. Sixty percent of Iraq's twenty-six million people were solely dependent on rations from the oil-for-food plan. The programme used an
escrow An escrow is a contractual arrangement in which a third party (the stakeholder or escrow agent) receives and disburses money or property for the primary transacting parties, with the disbursement dependent on conditions agreed to by the transacti ...
system. Oil exported from Iraq was paid for by the recipient into an escrow account possessed until 2001 by
BNP Paribas BNP Paribas is a French international banking group, founded in 2000 from the merger between Banque Nationale de Paris (BNP, "National Bank of Paris") and Paribas, formerly known as the Banque de Paris et des Pays-Bas. The full name of the grou ...
bank, rather than to the Iraqi government. The money was then apportioned to pay for
war reparations War reparations are compensation payments made after a war by one side to the other. They are intended to cover damage or injury inflicted during a war. History Making one party pay a war indemnity is a common practice with a long history. ...
to
Kuwait Kuwait (; ar, الكويت ', or ), officially the State of Kuwait ( ar, دولة الكويت '), is a country in Western Asia. It is situated in the northern edge of Eastern Arabia at the tip of the Persian Gulf, bordering Iraq to Iraq–Ku ...
, ongoing coalition and United Nations operations within Iraq. The remainder, the majority of the revenue, was available to the Iraqi government to purchase regulated items. The Iraqi government was permitted to purchase only items that were not
embargo Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions are not necessarily imposed because of economic circumstances—they m ...
ed under the economic sanctions. Certain items, such as raw foodstuffs, were expedited for immediate shipment, but requests for most items, including such simple things as
pencil A pencil () is a writing or drawing implement with a solid pigment core in a protective casing that reduces the risk of core breakage, and keeps it from marking the user's hand. Pencils create marks by physical abrasion, leaving a tra ...
s and
folic acid Folate, also known as vitamin B9 and folacin, is one of the B vitamins. Manufactured folic acid, which is converted into folate by the body, is used as a dietary supplement and in food fortification as it is more stable during processing a ...
, were reviewed in a process that typically took six months before shipment was authorized. Items deemed to have any potential application in chemical, biological or nuclear weapons systems development were not available to the regime, regardless of stated purpose.


Financial statistics

Over US$53 billion worth of
Iraq Iraq,; ku, عێراق, translit=Êraq officially the Republic of Iraq, '; ku, کۆماری عێراق, translit=Komarî Êraq is a country in Western Asia. It is bordered by Turkey to Iraq–Turkey border, the north, Iran to Iran–Iraq ...
i oil was sold on the world market. About US$46 billion of this was intended to provide for the
humanitarian Humanitarianism is an active belief in the value of human life, whereby humans practice benevolent treatment and provide assistance to other humans to reduce suffering and improve the conditions of humanity for moral, altruistic, and emotional ...
needs of the Iraqi people such as food and
medicine Medicine is the science and practice of caring for a patient, managing the diagnosis, prognosis, prevention, treatment, palliation of their injury or disease, and promoting their health. Medicine encompasses a variety of health care pr ...
, given the context of international
economic sanctions Economic sanctions are commercial and financial penalties applied by one or more countries against a targeted self-governing state, group, or individual. Economic sanctions are not necessarily imposed because of economic circumstances—they ...
. A considerable portion was spent on
Gulf War The Gulf War was a 1990–1991 armed campaign waged by a 35-country military coalition in response to the Iraqi invasion of Kuwait. Spearheaded by the United States, the coalition's efforts against Iraq were carried out in two key phases: ...
reparations paid through a compensation fund (25% starting December 2000). UN administrative and operational costs for the programme was US$1.2 billion; the cost of the weapons inspection programme was also paid from these funds. Internal audits have not been made public.


End of the programme

Shortly before US-led
Coalition forces ' ps, کمک او همکاري ' , allies = Afghanistan , opponents = Taliban Al-Qaeda , commander1 = , commander1_label = Commander , commander2 = , commander2_label = , commander3 = , command ...
launched an
invasion of Iraq The 2003 invasion of Iraq was a United States-led invasion of the Republic of Iraq and the first stage of the Iraq War. The invasion phase began on 19 March 2003 (air) and 20 March 2003 (ground) and lasted just over one month, including 26 ...
, UN Secretary-General
Kofi Annan Kofi Atta Annan (; 8 April 193818 August 2018) was a Ghanaian diplomat who served as the seventh secretary-general of the United Nations from 1997 to 2006. Annan and the UN were the co-recipients of the 2001 Nobel Peace Prize. He was the founde ...
suspended the programme and evacuated more than 300 workers monitoring the distribution of supplies. On 28 March 2003, Annan, the United States, and Britain asked the
UN Security Council The United Nations Security Council (UNSC) is one of the six principal organs of the United Nations (UN) and is charged with ensuring international peace and security, recommending the admission of new UN members to the General Assembly, an ...
to ensure that nearly US$10 billion in goods Iraq had ordered and that were already approved—including US$2.4 billion for food—could enter the country once conditions allowed. The resolution under discussion made clear that the chief responsibility for addressing humanitarian consequences of the war would fall to the United States and Britain if they took control of the country. Under the 1949
Fourth Geneva Convention The Geneva Convention relative to the Protection of Civilian Persons in Time of War, more commonly referred to as the Fourth Geneva Convention and abbreviated as GCIV, is one of the four treaties of the Geneva Conventions. It was adopted in Augu ...
these are the responsibilities of the occupying power. On 22 May 2003, UN Security Council Resolution 1483 granted authority to the
Coalition Provisional Authority ) , capital = Baghdad , largest_city = capital , common_languages = Arabic Kurdish English (''de facto'') , government_type = Transitional government , legislature = Iraqi Governing Council , title_leader = Administrator , leader1 = Ja ...
to use Iraq's oil revenue. The programme's remaining funds, $10 billion, were transferred over a six-month winding-up period to the Development Fund for Iraq under the Coalition Provisional Authority's control; this represented 14% of the programme's total income over 5 years. The programme was formally terminated on 21 November 2003 and its major functions were turned over to the
Coalition Provisional Authority ) , capital = Baghdad , largest_city = capital , common_languages = Arabic Kurdish English (''de facto'') , government_type = Transitional government , legislature = Iraqi Governing Council , title_leader = Administrator , leader1 = Ja ...
.


Abuse

The programme also suffered from widespread
corruption Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...
and abuse. Throughout its existence, the programme was dogged by accusations that some of its profits were unlawfully diverted to the government of Iraq and to UN officials. These accusations were made in many countries, including the US and Norway. Until 2001, the money for the Oil-for-Food Programme went through
BNP Paribas BNP Paribas is a French international banking group, founded in 2000 from the merger between Banque Nationale de Paris (BNP, "National Bank of Paris") and Paribas, formerly known as the Banque de Paris et des Pays-Bas. The full name of the grou ...
, whose main private share-holder is Iraqi-born Nadhmi Auchi, a man estimated worth about $1 billion according to ''Forbes'' estimates, the 13th-richest man in Britain according to ''
The Guardian ''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers '' The Observer'' and '' The Guardian Weekly'', ''The Guardian'' is part of the ...
''. Auchi received a 15-month suspended sentence for his involvement in the Elf scandal, which the British newspaper called "the biggest fraud inquiry in Europe since the Second World War", saying "Elf became a private bank for its executives who spent £200 million on political favours, mistresses, jewellery, fine art, villas and apartments". Elf, an oil company, merged with TotalFina to become Total S.A. in 2003.


Misapplication of funding

According to information from
Aqila al-Hashimi Aqila al-Hashimi (Arabic عقيلة الهاشمي ''cAqīla al-Hāshimī''; 1953 - September 25, 2005) was an Iraqi politician who served on the Iraqi Governing Council. Aqila al-Hashimi was born in 1953 into a prominent Shi'ite religious family ...
, who was senior bureaucrat with the Oil-for-Food Programme in Iraq, of the programme's total of $60 billion, "roughly 65% was actually applied to aid". Over 193 so-called electrical consultants each received $15,000 per month while the electricity only worked a few hours at a time.
Benon Sevan Benon Vahe Sevan (born December 18, 1937 Nicosia, Cyprus) was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food ...
of
Cyprus Cyprus ; tr, Kıbrıs (), officially the Republic of Cyprus,, , lit: Republic of Cyprus is an island country located south of the Anatolian Peninsula in the eastern Mediterranean Sea. Its continental position is disputed; while it is ...
, who headed the programme, defended it, claiming that it had only a 2.2% administrative cost and that it was subject to more than 100 internal and external
audit An audit is an "independent examination of financial information of any entity, whether profit oriented or not, irrespective of its size or legal form when such an examination is conducted with a view to express an opinion thereon.” Auditing ...
s. He blamed
Security Council The United Nations Security Council (UNSC) is one of the six principal organs of the United Nations (UN) and is charged with ensuring international peace and security, recommending the admission of new UN members to the General Assembly, an ...
restrictions for making the situation difficult and said that 90 per cent of Iraq's population relied on the programme for its monthly food basket. Sevan stonewalled efforts to review and investigate the programme. He ordered his staff to enforce a policy that complaints about illegal payoffs should be formally filed with the
whistleblower A whistleblower (also written as whistle-blower or whistle blower) is a person, often an employee, who reveals information about activity within a private or public organization that is deemed illegal, immoral, illicit, unsafe or fraudulent. Whi ...
's country, making them public and allowing Iraq to bar any whistleblowers. In 2000, Dileep Nair, the UN corruption watchdog, wanted to determine the programme's level of vulnerability. Sevan and UN Deputy Secretary-General Louise Frechette, rejected any such investigation, claiming that it would be too expensive to be worthwhile. UN Chef de Cabinet
Iqbal Riza Iqbal Riza (EEK-bahl Ree-zah) (born 20 May 1934 in Lonavla, India) is a retired Pakistani diplomat. He is currently a special adviser to the Secretary-General of the United Nations, and has worked for Spanish Foundation Concordia 21. He served as th ...
ordered the shredding of years' worth of documents in his office concerning the programme. He said that they were from a working file that contained copies of documents received by his office, and were purged due to lack of space, and also that the originals were held elsewhere. In response to these criticisms, and to evidence acquired after the
2003 invasion of Iraq The 2003 invasion of Iraq was a United States-led invasion of the Republic of Iraq and the first stage of the Iraq War. The invasion phase began on 19 March 2003 (air) and 20 March 2003 (ground) and lasted just over one month, including ...
, accusations were made that skimmed profits were being used to buy influence at the UN and with
Kofi Annan Kofi Atta Annan (; 8 April 193818 August 2018) was a Ghanaian diplomat who served as the seventh secretary-general of the United Nations from 1997 to 2006. Annan and the UN were the co-recipients of the 2001 Nobel Peace Prize. He was the founde ...
himself. An investigation cleared Annan of any personal wrongdoing.


Adulterated foods

According to an interim report released on 3 February 2005 by former Federal Reserve chairman Paul Volcker's commission (see #Investigations below), much of the food aid supplied under the programme "was unfit for human consumption". The report concluded that Sevan had accepted nearly $150,000 in bribes over the course of the programme, and in 2005 he was suspended from his position at the United Nations as a result of the fraud investigation.


''Al Mada'' list

One of the earliest allegations of wrongdoing in the programme surfaced on 25 January 2004, when '' al Mada'', a daily newspaper in Iraq, published a list of individuals and organizations alleged to have received oil sales contracts via the UN's Oil-for-Food Programme. The list came from over 15,000 documents which were reportedly found in the state-owned Iraqi oil corporation, the
Iraq National Oil Company The Iraq National Oil Company (INOC) was founded in 1966 by the Iraqi government. It was empowered to operate all aspects of the oil industry in Iraq except for refining which was already being run by the Oil Refineries Administration (1952) and l ...
, which had close links to the
Iraqi Oil Ministry The Ministry of Oil ( ar, وزارة النفط) is the Iraqi government agency responsible for Iraqi petroleum. The Minister of Oil since May 2020 is Ihsan Abdul Jabbar Ismail. Establishments * North Oil Company (NOC) * South Oil Company ...
. Named in the list of beneficiaries were
George Galloway George Galloway (born 16 August 1954) is a British politician, broadcaster, and writer who is currently leader of the Workers Party of Britain, serving since 2019. Between 1987 and 2010, and then between 2012 and 2015, Galloway was a Member o ...
, then a British
Member of Parliament A member of parliament (MP) is the representative in parliament of the people who live in their electoral district. In many countries with bicameral parliaments, this term refers only to members of the lower house since upper house members o ...
(MP), and his charity, the Mariam Appeal; former French
Interior Minister An interior minister (sometimes called a minister of internal affairs or minister of home affairs) is a cabinet official position that is responsible for internal affairs, such as public security, civil registration and identification, emergency ...
Charles Pasqua Charles Victor Pasqua (18 April 192729 June 2015) was a French businessman and Gaullist politician. He was Interior Minister from 1986 to 1988, under Jacques Chirac's '' cohabitation'' government, and also from 1993 to 1995, under the government ...
; Shaker al-Kaffaji, an Iraqi-American businessman; Indian Foreign Minister
Natwar Singh Kunwar Natwar Singh, IFS (born 16 May 1931) is an Indian diplomat and politician who served as the Minister of External Affairs from May 2004 to December 2005. Singh was selected into the Indian Foreign Service, one of the most competitive an ...
, and Bheem Singh. Many prominent Russian firms and individuals were also included on the ''al Mada'' list. Even the
Russian Orthodox Church , native_name_lang = ru , image = Moscow July 2011-7a.jpg , imagewidth = , alt = , caption = Cathedral of Christ the Saviour in Moscow, Russia , abbreviation = ROC , type ...
was supposedly involved in illegal oil trading. The former assistant to the Vatican secretary of state, Reverend Jean-Marie Benjamin, is said to have received the rights to sell . George Galloway subsequently won two
libel Defamation is the act of communicating to a third party false statements about a person, place or thing that results in damage to its reputation. It can be spoken (slander) or written (libel). It constitutes a tort or a crime. The legal defi ...
actions against the ''
Christian Science Monitor Christians () are people who follow or adhere to Christianity, a monotheistic Abrahamic religion based on the life and teachings of Jesus Christ. The words ''Christ'' and ''Christian'' derive from the Koine Greek title ''Christós'' (Χρισ ...
'' and ''
Daily Telegraph Daily or The Daily may refer to: Journalism * Daily newspaper, newspaper issued on five to seven day of most weeks * ''The Daily'' (podcast), a podcast by ''The New York Times'' * ''The Daily'' (News Corporation), a defunct US-based iPad new ...
'', which had reported the allegations. The president of Oilexco Ltd, Arthur Millholland, whose name also appeared on the ''al Mada'' list, denied wrongdoing but confirmed that illegal surcharges were being paid to the Iraqi government by contractors. Few deny that in Iraq, like in many third-world countries, bribes and kickbacks were regularly paid to the leadership in order to get contracts; however, the ''al Mada'' list does not discuss bribes paid to Iraq – it discusses bribes paid to individuals to support Iraq.


Operation of the scheme

The scheme is alleged to have worked in this way: individuals and organizations sympathetic to the Iraqi regime, or those just easily bribed, were offered oil contracts through the Oil-for-Food Programme. These contracts for Iraqi oil could then be sold on the open world market and the seller was allowed to keep a transaction fee, said to be between $0.15 and $0.50/barrel (0.94 and 3.14 $/m³) of oil sold. The seller was then to refund the Iraqi government a certain percentage of the commission. Contracts to sell Iraq humanitarian goods through the Oil-for-Food Programme were given to companies and individuals based on their willingness to kick back a certain percentage of the contract profits to the Iraqi regime. Companies that sold commodities via the Oil-for-Food Programme were overcharging by up to 10%, with part of the overcharged amount being diverted into private bank accounts for Saddam Hussein and other regime officials and the other part being kept by the supplier. The involvement of the UN itself in the scandal began in February 2004 after the name of
Benon Sevan Benon Vahe Sevan (born December 18, 1937 Nicosia, Cyprus) was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food ...
, executive director of the Oil-for-Food Programme, appeared on the Iraqi Oil Ministry's documents. Sevan received vouchers for at least 11,000,000 barrels (1,700,000 m³) of oil, worth some $3.5 million in profit. Sevan denied the charges.


BNP Paribas

The sole bank handling funds transfers for the Oil-for-Food Programme was the New York branch of the Banque Nationale de Paris-Paribas, or
BNP Paribas BNP Paribas is a French international banking group, founded in 2000 from the merger between Banque Nationale de Paris (BNP, "National Bank of Paris") and Paribas, formerly known as the Banque de Paris et des Pays-Bas. The full name of the grou ...
. This French bank was the sole bank administering the $64 billion UN programme. An investigation by the US House Committee on International Relations found that BNP Paribas made payments for goods without proof of delivery and allowed payments to third parties not identified as authorized recipients. Investigators estimate that the bank received more than $700 million in fees under the UN programme, which began in 1996 and ended after the ouster of Saddam in March 2003.


Duelfer Report

The
Iraq Survey Group The Iraq Survey Group (ISG) was a fact-finding mission sent by the multinational force in Iraq to find the weapons of mass destruction alleged to be possessed by Iraq that had been the main ostensible reason for the invasion in 2003. Its final re ...
, which was tasked with finding evidence of
weapons of mass destruction A weapon of mass destruction (WMD) is a chemical, biological, radiological, nuclear, or any other weapon that can kill and bring significant harm to numerous individuals or cause great damage to artificial structures (e.g., buildings), natu ...
in Iraq, found that OFF saved the Iraqi economy from decline after the imposition of sanctions. Furthermore, the Iraqi regime found that it could corrupt OFF to get hard currency that could be used to manipulate the Iraq Sanctions Committee and undermine sanctions as well as to obtain more weapons. The final official version of the Iraq Survey Group report, known as the Duelfer Report, cited only France, Russia and China (countries who were also strongly anti-war) as violators who paid kickbacks. According to the report, the top three recipients of oil included Russia (30%), France (15%), and China (10%), which are all members of the UN Security Council. The US received 2–3% of the oil. US recipients included
ExxonMobil ExxonMobil Corporation (commonly shortened to Exxon) is an American multinational oil and gas corporation headquartered in Irving, Texas. It is the largest direct descendant of John D. Rockefeller's Standard Oil, and was formed on November 3 ...
,
ChevronTexaco Corp. Chevron Corporation is an American multinational energy corporation. The second-largest direct descendant of Standard Oil, and originally known as the Standard Oil Company of California (shortened to Socal or CalSo), it is headquartered in Sa ...
and the
El Paso Corp. El Paso Corporation was a provider of natural gas and related energy products and was one of North America's largest natural gas producers until its acquisition by Kinder Morgan in 2012. It was headquartered in Houston, Texas. United States. Prio ...
The list of US companies was originally censored by CIA lawyers, citing privacy issues, but was later leaked. On 5 June 2007, the German chapter of the anti-corruption organisation
Transparency International Transparency International e.V. (TI) is a German registered association founded in 1993 by former employees of the World Bank. Based in Berlin, its nonprofit and non-governmental purpose is to take action to combat global corruption with civil ...
(TI) lodged a complaint with the German
Federal Ministry for Economic Affairs and Energy The Federal Ministry for Economic Affairs and Climate Action (german: Bundesministerium für Wirtschaft und Klimaschutz, ), abbreviated BMWK (was BMWi), is a cabinet-level ministry of the Federal Republic of Germany. It was previously known as ...
(BMWi) against 57 German companies for allegedly paying $11.9m in kickbacks in the United Nations' Oil for Food Programme in Iraq.


Oil coupons as bribes

The US-funded satellite network Al Hurra broadcast a story on 6 January 2005 detailing allegations that Saddam's regime had bribed news reporters with oil coupons. Reporters named include Ahmed Mansour of
Al Jazeera Al Jazeera ( ar, الجزيرة, translit-std=DIN, translit=al-jazīrah, , "The Island") is a state-owned Arabic-language international radio and TV broadcaster of Qatar. It is based in Doha and operated by the media conglomerate Al Jazee ...
and , a writer based in France known for her pro-Saddam positions. Two types of oil coupons were used: silver coupons that entitled holders to nine million barrels of oil, and gold coupons worth more. Hamida Naanaa is said to have received a gold coupon.


Ingersoll-Rand pays $2.5m in fines for kickbacks

In October 2007, the SEC brought a case against
Ingersoll-Rand Ingersoll Rand is an American multinational company that provides flow creation and industrial products. The company was formed in February 2020 through the spinoff of the industrial segment of Ingersoll-Randplc (now known as Trane Technologies) ...
alleging kickbacks by three different subsidiaries to Iraqi Government officials. Ingersoll-Rand's German subsidiary ABG, subsidiary I-R Italiana and the Irish subsidiary
Thermo King Thermo King is an American manufacturer of transport temperature control systems for refrigerator trucks and trailers, refrigerated containers and refrigerated railway cars along with heating, ventilation and air conditioning systems for bus and ...
paid "after-sales service fees" (ASSFs), although no bona fide services were performed. Ingersoll-Rand, without admitting or denying the allegations in the commission's complaint, consented to the entry of a final judgment permanently enjoining it from future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the
Securities Exchange Act of 1934 The Securities Exchange Act of 1934 (also called the Exchange Act, '34 Act, or 1934 Act) (, codified at et seq.) is a law governing the secondary trading of securities ( stocks, bonds, and debentures) in the United States of America. A land ...
, ordering it to disgorge $1,710,034 in profits, plus $560,953 in pre-judgment interest, and to pay a civil penalty of $1,950,000. Ingersoll-Rand was also ordered to comply with certain undertakings regarding its compliance program for the
Foreign Corrupt Practices Act The Foreign Corrupt Practices Act of 1977 (FCPA) (, ''et seq.'') is a United States federal law that prohibits U.S. citizens and entities from bribing foreign government officials to benefit their business interests. The FCPA is applicable worl ...
, and to pay a $2,500,000 fine pursuant to a deferred prosecution agreement with the U.S. Department of Justice, Fraud Section.


Complaints by Kurds

The
Iraqi Kurds Iraqi Kurds ( ar, العراقيين الكرد, ku, کوردەکانی عێراق) are people born in or residing in Iraq who are of Kurdish origin. The Kurds are the largest ethnic minority in Iraq, comprising between 15% and 20% of the count ...
complained since the programme began that they were not being paid their fair share of the oil revenues. According to the guidelines set up by the Oil-for-Food Programme, the revenues were to be divided up in such a way as to protect Iraq's predominantly Kurdish regions. The allegations include claims that the
Cairo Cairo ( ; ar, القاهرة, al-Qāhirah, ) is the capital of Egypt and its largest city, home to 10 million people. It is also part of the largest urban agglomeration in Africa, the Arab world and the Middle East: The Greater Cairo metr ...
office of the UN's
World Health Organization The World Health Organization (WHO) is a specialized agency of the United Nations responsible for international public health. The WHO Constitution states its main objective as "the attainment by all peoples of the highest possible level o ...
, run by an individual alleged to have received oil sales contracts, managed to stall the building of a new general hospital for the Kurdish city of
Sulaymaniya Sulaymaniyah, also spelled as Slemani ( ku, سلێمانی, Silêmanî, ar, السليمانية, as-Sulaymāniyyah), is a city in the east of the Kurdistan Region of Iraq, not far from the Iran–Iraq border. It is surrounded by the Azmar, Go ...
, even though the funds for the project had been available since 1998.


Potential Annan link

On 14 June 2005, two 1998 memos surfaced that appeared to link Kofi Annan to Cotecna Inspection S.A. The first one described a meeting between Annan and Cotecna while the company was bidding on the programme, after which the company raised its bid. A second one mentioned that Cotecna was confident that they would get the bid due to "effective but quiet
lobbying In politics, lobbying, persuasion or interest representation is the act of lawfully attempting to influence the actions, policies, or decisions of government officials, most often legislators or members of regulatory agencies. Lobbying, whic ...
" in New York diplomatic circles. The source of the documents was a Cotecna executive. The Second Interim Report by the IIC confirmed that Cotecna won the Oil for Food contract fairly and based on merit. The Committee concluded that there was no link between Kofi Annan and the award of Cotecna's contract, and Cotecna has been transparent and cooperative through this investigation.


Alleged involvement of Russian intelligence

According to high-ranking Russian SVR defector Sergei Tretyakov, the Oil-for-Food Programme was sabotaged by an undercover Russian intelligence officer, Alexander Kramar, a UN employee who set up the artificially low oil prices in 1998 to allow Saddam to use the oil vouchers as lucrative bribes. The difference between the market price and the price defined by Kramar was pocketed by people who received the vouchers from Saddam. Among the bribed were top officials from Russia, France, and China.Pete Earley, "Comrade J: The Untold Secrets of Russia's Master Spy in America After the End of the Cold War", Penguin Books, 2007, , pages 210–223. The biggest part of vouchers (to buy of oil) went to forty-six individuals or organizations in Russia, including the
Russian Orthodox Church , native_name_lang = ru , image = Moscow July 2011-7a.jpg , imagewidth = , alt = , caption = Cathedral of Christ the Saviour in Moscow, Russia , abbreviation = ROC , type ...
. They pocketed $476 million. Among Russians who received the money were Alexander Voloshin and
Vladimir Zhirinovsky Vladimir Volfovich Zhirinovsky, ''né'' Eidelshtein (russian: link=false, Эйдельштейн) (25 April 1946 – 6 April 2022) was a Russian right-wing populist politician and the leader of the Liberal Democratic Party of Russia (LDPR) fr ...
. Sergei Isakov, a friend of Voloshin, carried "bags with money" from Moscow to Baghdad taking the "earned" money as kickbacks to Saddam.


Alleged use for financing of Saddam Hussein regime

Fox News The Fox News Channel, abbreviated FNC, commonly known as Fox News, and stylized in all caps, is an American multinational conservative cable news television channel based in New York City. It is owned by Fox News Media, which itself is o ...
broke the story that Alexander Yakovlev, a Russian official in the UN Procurement Department, was involved; he later resigned and pleaded guilty to corruption charges. The program was also linked to Ahmed Idris Nasreddin, designated as a terrorist financier by Britain, the US and according to the UN "belonging to or affiliated with
Al Qaeda Al-Qaeda (; , ) is an Islamic extremism, Islamic extremist organization composed of Salafist jihadists. Its members are mostly composed of Arab, Arabs, but also include other peoples. Al-Qaeda has mounted attacks on civilian and military ta ...
." Nasreddin was removed from these lists in 2007 after he demonstrated that he had severed all business ties with Youssef Nada, who co-founded the Al Taqwa Bank with him, and pledged to have no further dealings with either Nada or the bank. Petra Navigation Group was a company that was on the blacklist of firms blocked from doing business with the U.S. for sanctions-busting activities designed to help Saddam's regime. According to some sources, Saddam provided millions of dollars from the Oil-for-Food program to the
Mujahedin-e-Khalq The People's Mojahedin Organization of Iran (PMOI), also known as Mojahedin-e-Khalq (MEK) or Mojahedin-e-Khalq Organization (MKO) ( fa, سازمان مجاهدين خلق ايران, sâzmân-e mojâhedīn-e khalq-e īrân), is an Iranian pol ...
.


Oil for wheat

A report by UN investigator Paul Volcker released in October 2005 found that the
Australian Wheat Board AWB Limited was a major grain marketing organisation based in Australia. Founded in 1939 by the Government of Australia as the Australian Wheat Board, in 1999 it was sold off by the government, initially to be owned by wheat growers. It was acq ...
, later AWB Limited, was the biggest single source of kickbacks for the Iraqi government. In exchange for trouble-free disembarkation of wheat purchased under the Oil-for-Food Programme, the Australian Wheat Board paid 'trucking charges' totalling A$300 million to Alia. Alia is a real Jordanian trucking company, but one with no role in the distribution of Australian wheat in Iraq. Alia kept a small percentage of 'charges', and passed the remainder on to Saddam's government. The AWB was fully compensated for the charges by increases in the price paid; the payments were approved by the Australian
Department of Foreign Affairs and Trade The Department of Foreign Affairs and Trade (DFAT) is the department of the Australian federal government responsible for foreign policy and relations, international aid (using the branding Australian Aid), consular services and trade and ...
. The Australian Government commissioned judge Terence Cole to further investigate whether Australian companies had indeed paid kickbacks to the Saddam regime. The
Cole Inquiry The Cole Inquiry, formally the Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme, was a Royal Commission established by the Australian government pursuant to the to investigate "whether decisions, actions, ...
commenced in December 2005. The
Cole Inquiry The Cole Inquiry, formally the Inquiry into certain Australian companies in relation to the UN Oil-For-Food Programme, was a Royal Commission established by the Australian government pursuant to the to investigate "whether decisions, actions, ...
has received testimony from senior Australian Government officials, including Prime Minister
John Howard John Winston Howard (born 26 July 1939) is an Australian former politician who served as the 25th prime minister of Australia from 1996 to 2007, holding office as leader of the Liberal Party. His eleven-year tenure as prime minister is the ...
, Deputy Prime Minister
Mark Vaile Mark Anthony James Vaile (born 18 April 1956) is a former deputy prime minister of Australia and former leader of the National Party of Australia. Vaile is currently a non-executive director of a number of public listed corporations. Early l ...
, Foreign Minister
Alexander Downer Alexander John Gosse Downer (born 9 September 1951) is an Australian former politician and diplomat who was leader of the Liberal Party from 1994 to 1995, Minister for Foreign Affairs from 1996 to 2007, and High Commissioner to the United King ...
and various officials from the Department of Foreign Affairs and Trade. During the course of the inquiry numerous AWB officials have resigned, including managing director
Andrew Lindberg Andrew Alexander Lindberg (born 29 April 1953) is an Australian businessman. From 2000 until February 2006, he held the positions of managing director and board member of AWB Limited. He resigned from these positions in the wake of his appearance ...
. In 2009, the Australian Federal Police ended the investigation related to the scandal.


Investigations


GAO investigation

After the
2003 invasion of Iraq The 2003 invasion of Iraq was a United States-led invasion of the Republic of Iraq and the first stage of the Iraq War. The invasion phase began on 19 March 2003 (air) and 20 March 2003 (ground) and lasted just over one month, including ...
and subsequent
Coalition A coalition is a group formed when two or more people or groups temporarily work together to achieve a common goal. The term is most frequently used to denote a formation of power in political or economical spaces. Formation According to ''A Gui ...
victory over the
Iraqi Army The Iraqi Ground Forces (Arabic: القوات البرية العراقية), or the Iraqi Army (Arabic: الجيش العراقي), is the ground force component of the Iraqi Armed Forces. It was known as the Royal Iraqi Army up until the coup ...
, the US
Government Accountability Office The U.S. Government Accountability Office (GAO) is a legislative branch government agency that provides auditing, evaluative, and investigative services for the United States Congress. It is the supreme audit institution of the federal gover ...
(GAO) was given the task of finalizing all Oil-for-Food-related supply contracts made with the now-defunct regime and of tracking down the personal fortunes of former regime members. During the execution of this task, the GAO found weaknesses in the programme that allowed kickbacks and other sources of wealth for Saddam Hussein. The GAO estimates that the Saddam Hussein regime generated $10.1 billion in illegal revenues. This figure includes $5.7 billion from oil smuggling and $4.4 billion in illicit surcharges on oil sales and after-sales charges on suppliers. The scale of the fraud was far more extensive than the GAO had previously estimated. A U.S. Department of Defense study, cited by the GAO, evaluated 759 contracts administered through the Oil-for-Food Programme and found that nearly half had been overpriced, by an average of 21 percent. Unlike the 661 committee, members of the Security Council had the authority to launch investigations into contracts and to stop any contract they did not like. The British and the Americans had turned down hundreds of Oil-for-Food contract requests, but these were blocked primarily on the grounds that the items being imported were dual-use technologies. To quote the GAO report, in its summary: : Both the UN Secretary-General, through the Office of the Iraqi Programme (OIP) and the Security Council, through its sanctions committee for Iraq, were responsible for overseeing the Oil-for-Food Programme. However, the Iraqi government negotiated contracts directly with purchasers of Iraqi oil and suppliers of commodities, which may have been one important factor that allowed Iraq to levy illegal surcharges and commissions. Joseph A. Christoff, director of international affairs and trade at the General Accounting Office, told a House hearing that UN auditors had refused to release the internal audits of the Oil-for-Food Programme.
Benon Sevan Benon Vahe Sevan (born December 18, 1937 Nicosia, Cyprus) was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food ...
, with support from
Kofi Annan Kofi Atta Annan (; 8 April 193818 August 2018) was a Ghanaian diplomat who served as the seventh secretary-general of the United Nations from 1997 to 2006. Annan and the UN were the co-recipients of the 2001 Nobel Peace Prize. He was the founde ...
, had written letters to all former Oil-for-Food contractors asking them to consult Sevan before releasing any documents to GAO or US congressional inquiry panels. Throughout its history, the programme had received both complaints from critics saying that it needed to be more open and complaints from companies about proprietary information being disclosed. The United Nations has denied all requests by the GAO for access to confidential internal audits of the Oil-for-Food Programme. While attempting to determine the complexity of the Oil-for-Food Programme for articles in ''
The Wall Street Journal ''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'', investigative journalist Claudia Rosett of th
Foundation for the Defence of Democracies
and the
Hudson Institute The Hudson Institute is a conservative American think tank based in Washington, D.C. It was founded in 1961 in Croton-on-Hudson, New York, by futurist, military strategist, and systems theorist Herman Kahn and his colleagues at the RAND Co ...
discovered that the UN treated details such as the identities of Oil-for-Food contractors; the price, quantity and quality of goods involved in the relief deals; and the identities of the oil buyers and the precise quantities that they received as confidential. The bank statements, the interest paid, and the transactions were all secret as well. Rosett has come under harsh criticism from
Denis Halliday Denis J. Halliday (born c.1941) was the United Nations Humanitarian Coordinator in Iraq from 1 September 1997 until 1998. He was previously Deputy Resident Representative to Singapore of the United Nations Development Programme.Murphy, C.N., 2006 ...
and
Benon Sevan Benon Vahe Sevan (born December 18, 1937 Nicosia, Cyprus) was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food ...
, who have claimed that many of Rosett's claims (such as Oil-for-Food funding the approval of an Olympic stadium, and where responsibility for various issues lay according to the UN resolutions) were incorrect. The US House Committee on International Relations investigated the Oil-for-Food Programme and discovered that money was provided by Sabah Yassen, the former Iraqi ambassador to Jordan, to pay the families of Palestinian suicide bombers between $15,000 to $25,000. From September 2000 until the invasion of Iraq, the families of Palestinians killed or wounded in the conflict with Israel (including 117 responsible for suicide bombings in Israel) received over $35 million. It is alleged that this money came from the UN Oil-for-Food Programme.


Independent Inquiry Committee

After initial opposition to an investigation, UN Secretary-General
Kofi Annan Kofi Atta Annan (; 8 April 193818 August 2018) was a Ghanaian diplomat who served as the seventh secretary-general of the United Nations from 1997 to 2006. Annan and the UN were the co-recipients of the 2001 Nobel Peace Prize. He was the founde ...
stated on 19 March 2004 that a full independent investigation would be launched. In an official press interview, Annan said " ..it is highly possible that there has been quite a lot of wrongdoing, but we need to investigate ..and see who was responsible.
"00:00:03"
(''audio clip, @5:56'') However, Annan was emphatic that most of the claims were "outrageous and exaggerated", and that most of the criticisms had to do with things over which the programme had no authority. The following individuals were chosen in April 2004 to head the United Nations' '' Independent Inquiry Committee'': * Paul Volcker, former United States
Federal Reserve System The Federal Reserve System (often shortened to the Federal Reserve, or simply the Fed) is the central banking system of the United States of America. It was created on December 23, 1913, with the enactment of the Federal Reserve Act, after ...
chairman and director of the United Nations Association of the United States of America; *
Mark Pieth Mark Pieth (born 9 March 1953) is Professor of Criminal Law at the University of Basel, Switzerland and a prominent anti-corruption expert. Pieth's career as a legal expert, defence lawyer, judge and compliance advisor includes several roles on t ...
of Switzerland, an expert on money-laundering in the
Organisation for Economic Co-operation and Development The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate ...
(OECD); and * Richard Goldstone of South Africa, former Prosecutor of the
International Criminal Tribunal for the former Yugoslavia The International Criminal Tribunal for the former Yugoslavia (ICTY) was a body of the United Nations that was established to prosecute the war crimes that had been committed during the Yugoslav Wars and to try their perpetrators. The tribunal ...
(ICTY) and the
International Criminal Tribunal for Rwanda The International Criminal Tribunal for Rwanda (ICTR; french: Tribunal pénal international pour le Rwanda; rw, Urukiko Mpanabyaha Mpuzamahanga Rwashyiriweho u Rwanda) was an international court established in November 1994 by the United Nation ...
(ICTR). On 22 April 2004, the
United Nations Security Council The United Nations Security Council (UNSC) is one of the six principal organs of the United Nations (UN) and is charged with ensuring international peace and security, recommending the admission of new UN members to the General Assembly, ...
passed a unanimous resolution endorsing the Volcker inquiry into
corruption Corruption is a form of dishonesty or a criminal offense which is undertaken by a person or an organization which is entrusted in a position of authority, in order to acquire illicit benefits or abuse power for one's personal gain. Corruption m ...
in the United Nations Oil-for-Food Programme for Iraq, calling upon all 191 member states to cooperate. The definitive report was presented by Paul Volcker to the Security Council on 7 September 2005. A leaked internal UN audit, which surfaced on mineweb.com, shows massive discrepancies between Cotecna reports and UN agency reports for the value of the shipments into northern Iraq. The audit found that Cotecna did no "value" inspections on nearly US$1 billion worth of aid shipments for the Inter-Agency Humanitarian Programme into northern Iraq. However, in a subsequent report published by the Independent Inquiry Committee (IIC) (27 October 2005) it was concluded that "there were no major complaints by the United Nations or its member states about Cotecna's performance" and that "the audit did not report any deficiencies in Cotecna's inspections".Independent Inquiry Committee into the United Nations Oil-for-Food Programme �
(27 October 2005)
p. 475
Benon Sevan Benon Vahe Sevan (born December 18, 1937 Nicosia, Cyprus) was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food ...
was briefed in December 2002 on the findings of the audit. The audit is available here. Its summary states: :OIOS' overall conclusion is that the management of the Contract has not been adequate and certain provisions of the Contract had not been adhered to. In addition, the incorporation of additional costs, such as rehabilitation of camps in the man-day-rate was an unacceptable arrangement. Also, the contract had been amended prior to its commencement, which was inappropriate. OIP needs to strengthen its management of contracts and the Procurement Division (PD) should ensure that the basis of payment is appropriate in order to avoid additional costs to the Organization After reading the leaked audit, congressman
Henry Hyde Henry John Hyde (April 18, 1924 – November 29, 2007) was an American politician who served as a Republican member of the United States House of Representatives from 1975 to 2007, representing the 6th District of Illinois, an area of Chicago' ...
wrote to Kofi Annan wondering why "The U.S. Congress – which provides 22 percent of the U.N.'s budget and which has publicly requested copies of the 55 internal audits – should be required to depend on media leaks for source documents."


Interim report results

In a 219-page initial report, the Volcker Commission documented how OIF chairman
Benon Sevan Benon Vahe Sevan (born December 18, 1937 Nicosia, Cyprus) was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food ...
used his position to solicit and receive allocations of oil from Iraq during the years he oversaw the humanitarian relief programme. Internal records from SOMO (Iraq's State Oil Marketing Organization), as well as interviews with former Iraqi officials involved in illicit oil deals, show that Sevan had requested and received allocations of of oil on behalf of a Panama-registered trading company called African Middle East Petroleum Co. Although the report makes no specific allegations of criminal activity by Sevan, Volcker does not rule out the possibility that charges might be filed by authorities in countries with relevant jurisdiction. The report called Sevan's conduct "ethically improper", noting that Sevan had received large cash payments totalling $160,000 dollars each year he had headed the programme. Sevan claims the money came from an aunt in Cyprus who has since died, but the panel found no evidence to back this claim. Volcker also reported in January that a review of 58 confidential UN internal OIF audits showed UN officials ignored early signs that humanitarian goods shipped to Iraq before the 2003 Invasion war were given little if any inspections by the Swiss company Cotecna. However, Volker concluded on 27 October 2005 IIC report that "the audit did not report any deficiencies in Cotecna's inspections". Cotecna paid Kojo Annan, Kofi Annan's son, consulting fees until November 2003. Volcker said that future reports would deal with questions regarding Kojo Annan.


Investigations by Iraqi Governing Council

International accounting firm
KPMG KPMG International Limited (or simply KPMG) is a multinational professional services network, and one of the Big Four accounting organizations. Headquartered in Amstelveen, Netherlands, although incorporated in London, England, KPMG is a net ...
had been selected by the Iraqi Governing Council to investigate the ''al Mada claims'', along with Freshfields Bruckhaus Deringer. It was due to release its findings to the Iraqi Governing Council in May 2004. However, in June 2004, KPMG stopped working on the project because it was owed money by the IGC. The US has been harshly critical of the KPMG probe led by associates of Ahmed Chalabi, accusing it of undermining the main probe established by Paul Bremer. That probe had been run by the head of Iraq's independent Board of Supreme Audit, Ehsan Karim, with assistance from
Ernst & Young Ernst & Young Global Limited, trade name EY, is a multinational professional services partnership headquartered in London, England. EY is one of the largest professional services networks in the world. Along with Deloitte, KPMG and Pricewat ...
. The Board of Supreme Audit is within the Iraqi Finance Ministry. In June 2004, Karim's investigation agreed to share information with the Volcker panel. However, on 1 July 2004, Karim was killed by a bomb magnetically attached to his car. Claude Hankes-Drielsma, a British national and long-time friend of Ahmed Chalabi, was appointed by the IGC to coordinate its investigation of the Oil-for-Food Programme. Drielsma testified in front of the US Congress (on 21 April 2004) that the KPMG investigation "is expected to demonstrate the clear link between those countries which were quite ready to support Saddam Hussein's regime for their own financial benefit, at the expense of the Iraqi people, and those that opposed the strict application of sanctions and the overthrow of Saddam". He also testified that Chalabi was in charge of the investigation for the IGC. In late May 2004, on the same day that Chalabi's offices at the Iraqi National Congress were raided by coalition forces, Drielsma claimed that an individual or individuals hacked into his computer and deleted every file associated with his investigation. He also claimed that "a back-up databank" was also deleted. When asked by Claudia Rosett if he had been physically threatened as well, Drielsma replied with "no comment". Drielsma has also been an outspoken critic of the UN's refusal to release any internal Oil-for-Food audit information to the IGC.


Beneficiaries


Russia

According to the paper ''The Beneficiaries of Saddam's Oil Vouchers: the List of 270'', included many Russian beneficiaries.


Other

Other beneficiaries have been alleged: Austria: * The Arab-Austrian Society (chaired by
Fritz Edlinger Rudolf Edlinger (Austria, 20 February 1940 – 21 August 2021) was a Social Democratic Party of Austria politician who served as Austrian Finance Minister (1997–2000) under Chancellor Viktor Klima. He was the president of the football club ...
) – . Belarus: * Liberal Party – * The
Communist Party of Belarus The Communist Party of Belarus (CPB; russian: Коммунисти́ческая па́ртия Белару́си, Kommunisticheskaya Partiya Belarusi; be, Камуністы́чная па́ртыя Белару́сі, Kamunistyčnaja Partyja B ...
– Brazil: * The
Revolutionary Movement 8th October 8th October Revolutionary Movement (''Movimento Revolucionário 8 de Outubro'', MR8) was a Marxist political organization that took part in armed struggle against the Military dictatorship in Brazil. It was formed in 1964 among college students ...
, a Brazilian Communist group – Canada: * Arthur Millholland, president and CEO of the Oilexco company FR Yugoslavia (De facto:Serbia and Montenegro): * The
Yugoslav Left , colours = Red , seats1_title = National Assembly of Serbia (1997) , seats1 = , headquarters = Venizelosova 31, Belgrade , predecessor = League of Communists – Movement for Yugoslavia , international ...
party – * The
Socialist Party Socialist Party is the name of many different political parties around the world. All of these parties claim to uphold some form of socialism, though they may have very different interpretations of what "socialism" means. Statistically, most of ...
– * The Italian Party – * "kokstuntsha" – possibly Kostunica's party – Other parties: * The
Romanian Labor Party Romanian may refer to: *anything of, from, or related to the country and nation of Romania ** Romanians, an ethnic group ** Romanian language, a Romance language *** Romanian dialects, variants of the Romanian language **Romanian cuisine Roman ...
– * The Party of the Hungarian Interest – * The
Bulgarian Socialist Party The Bulgarian Socialist Party ( bg, Българска социалистическа партия, translit=Balgarska sotsialisticheska partiya, BSP), also known as The Centenarian ( bg, Столетницата, links=no, translit=Stoletnitsat ...
– * The Communist Party of Slovakia – France: * The French-Arab Friendship Association – * Former French Interior Minister
Charles Pasqua Charles Victor Pasqua (18 April 192729 June 2015) was a French businessman and Gaullist politician. He was Interior Minister from 1986 to 1988, under Jacques Chirac's '' cohabitation'' government, and also from 1993 to 1995, under the government ...
– * Patrick Maugein, the
Trafigura Trafigura Group Pte. Ltd. is a Singaporean-based Swiss multinational commodity trading company founded in 1993 that trades in base metals and energy. It is the world's largest private metals trader and second-largest oil trader having built or ...
company – * Michel Grimard, "founder of the French-Iraqi Export Club" – . Egypt: * Khaled Gamal Abd Al-Nasser, "son of the late Egyptian president" – * Imad Al-Galda, "a businessman and a member of the Egyptian parliament from President Mubarak's National Democratic Party" – * Abd Al-Azim Mannaf, "editor of the Sout Al-Arab newspaper" – * Muhammad Hilmi, "editor of the Egyptian paper Sahwat Misr" – an undisclosed number of barrels. * The United Arab Company – * The Nile and Euphrates Company – * The Al-Multaqa Foundation for Press and Publication – . Libya: * Prime Minister Shukri Ghanem – India: * The
Indian National Congress The Indian National Congress (INC), colloquially the Congress Party but often simply the Congress, is a political party in India with widespread roots. Founded in 1885, it was the first modern nationalist movement to emerge in the British E ...
– Indonesia: * Indonesian President
Megawati Sukarnoputri Diah Permata Megawati Setiawati Sukarnoputri (; born 23 January 1947) is an Indonesian politician who served as the fifth president of Indonesia from 2001 to 2004. She previously served as the eighth vice president from 1999 to 2001. Megawati i ...
– Italy: * The Italian Petrol Union – *
West Petrol West or Occident is one of the four cardinal directions or points of the compass. It is the opposite direction from east and is the direction in which the Sunset, Sun sets on the Earth. Etymology The word "west" is a Germanic languages, German ...
, an Italian company that trades crude oil and oil products – *
Roberto Formigoni Roberto Formigoni (born 30 March 1947) is a former Italian politician born in Lecco, Italy. He was the President of Lombardy from 1995 to 2013. He is the former unofficial political spokesperson of the Communion and Liberation movement. On 21 F ...
, possibly the president of Lombardia – * Salvatore Nicotra, an oil merchant – Myanmar: * Myanmar's Forestry Minister – Palestine: * The
Palestinian Liberation Organization The Palestine Liberation Organization (PLO; ar, منظمة التحرير الفلسطينية, ') is a Palestinian nationalist political and militant organization founded in 1964 with the initial purpose of establishing Arab unity and s ...
(PLO) – * The PLO Political Bureau – * Abu Al-Abbas – * Abdallah Al-Horani – * The PFLP – * Wafa Tawfiq Al-Sayegh – Qatar: * Qatari Horseracing Association Chairman Hamad bin Ali Aal Thani – * Gulf Petroleum – Spain: * Basem Qaqish, "a member of the Spanish Committee for the Defense of the Arab Cause" – * Ali Ballout, "a pro-Saddam Lebanese journalist" – * Javier Robert – Syria: * Farras Mustafa Tlass, "the son of Syrian Defense Minister Mustafa Tlass" – * Audh Amourah – * Ghassan Zakariya – * Anwar Al-Aqqad – * Hamida Na'Na', the owner of the
Al Wefaq Al-Wefaq National Islamic Society ( ar, جمعية الوفاق الوطني الإسلامية; ), sometimes shortened to simply Al-Wefaq, was a Shi'a Bahraini political party, that operates clandestinely after being ordered by the highest co ...
Al-Arabi periodical – . Switzerland: *
Glencore Glencore plc is a Swiss multinational commodity trading and mining company with headquarters in Baar, Switzerland. Glencore's oil and gas head office is in London and its registered office is in Saint Helier, Jersey. The current company wa ...
, the largest commodity trader in Switzerland – * Taurus Petroleum – * Petrogas, which is "listed under three sub-companies – Petrogas Services, Petrogas Distribution, and Petrogas Resources – and is associated with the Russian company
Rosneft PJSC Rosneft Oil Company ( stylized as ROSNEFT) is a Russian integrated energy company headquartered in Moscow. Rosneft specializes in the exploration, extraction, production, refining, transport, and sale of petroleum, natural gas, and petro ...
egazetroy" – * Alcon, "listed in Lichtenstein and associated with larger oil companies" – * Finar Holdings, which is "listed in Lugano, Switzerland, and is under liquidation" – received Ukraine: * The
Social Democratic Party The name Social Democratic Party or Social Democrats has been used by many political parties in various countries around the world. Such parties are most commonly aligned to social democracy as their political ideology. Active parties For ...
– . * The
Communist Party A communist party is a political party that seeks to realize the socio-economic goals of communism. The term ''communist party'' was popularized by the title of '' The Manifesto of the Communist Party'' (1848) by Karl Marx and Friedrich Engel ...
– . * The
Socialist Party Socialist Party is the name of many different political parties around the world. All of these parties claim to uphold some form of socialism, though they may have very different interpretations of what "socialism" means. Statistically, most of ...
– . * The FTD oil company – , as did other Ukrainian companies. United Kingdom: *
George Galloway George Galloway (born 16 August 1954) is a British politician, broadcaster, and writer who is currently leader of the Workers Party of Britain, serving since 2019. Between 1987 and 2010, and then between 2012 and 2015, Galloway was a Member o ...
– * Fawwaz Zreiqat – . Zreiqat also appears in the Jordanian section as having received * The
Mujahideen Khalq ''Mujahideen'', or ''Mujahidin'' ( ar, مُجَاهِدِين, mujāhidīn), is the plural form of ''mujahid'' ( ar, مجاهد, mujāhid, strugglers or strivers or justice, right conduct, Godly rule, etc. doers of jihād), an Arabic term t ...
– United States: * Samir Vincent, "organized a delegation of Iraqi religious leaders to visit the U.S. and meet with former president Jimmy Carter" – * Shaker Al-Khafaji, "the pro-Saddam chairman of the 17th conference of Iraqi expatriates" – . Other beneficiaries were companies and individuals from the Sudan, Yemen, Cyprus, Turkey, Vietnam, Bangladesh, Malaysia, Pakistan, Romania, the UAE, Morocco, Algeria, Tunisia, Panama, Thailand, Chad, China, Nigeria, Kenya, Ireland, Bahrain, and the Philippines as well as two Saudi Arabian companies.


Criminal investigation in France

The French criminal justice system is investigating the alleged involvement of two former officials from the French Ministry of Foreign Affairs, Jean-Bernard Mérimée and Serge Boidevaix. The two are accused of having used their extensive network of connections in the Arab world in order to commit "influence peddling" and "corruption of foreign public agents". They have been put under formal criminal investigation by investigating magistrate Philippe Courroye, a famous specialist in cases of corruption and other financial dealings. Both men had retired at the time of the alleged crimes and acted in their personal capacity, not as official envoys of the French government; however, Boidevaix claims that he kept the Ministry of Foreign Affairs informed of his actions in Iraq. The Ministry claims to have warned both men formally in 2001 (during the administration of
Lionel Jospin Lionel Robert Jospin (; born 12 July 1937) is a French politician who served as Prime Minister of France from 1997 to 2002. Jospin was First Secretary of the Socialist Party from 1995 to 1997 and the party's candidate for President of France in ...
). Some other people, including
Bernard Guillet Bernard (''Bernhard'') is a French language, French and West Germanic masculine given name. It is also a surname. The name is attested from at least the 9th century. West Germanic ''Bernhard'' is composed from the two elements ''bern'' "bear" an ...
, an aide to French senator
Charles Pasqua Charles Victor Pasqua (18 April 192729 June 2015) was a French businessman and Gaullist politician. He was Interior Minister from 1986 to 1988, under Jacques Chirac's '' cohabitation'' government, and also from 1993 to 1995, under the government ...
, are also under formal investigation. Guillet and Pasqua deny any wrongdoing.


US Senate investigations

US Senator The United States Senate is the upper chamber of the United States Congress, with the House of Representatives being the lower chamber. Together they compose the national bicameral legislature of the United States. The composition and power ...
Norm Coleman Norman Bertram Coleman Jr. (born August 17, 1949) is an American politician, attorney, and lobbyist. From 2003 to 2009, he served as a United States Senator for Minnesota. From 1994 to 2002, he was mayor of Saint Paul, Minnesota. First elec ...
called for
Kofi Annan Kofi Atta Annan (; 8 April 193818 August 2018) was a Ghanaian diplomat who served as the seventh secretary-general of the United Nations from 1997 to 2006. Annan and the UN were the co-recipients of the 2001 Nobel Peace Prize. He was the founde ...
to resign over the scandal and held a number of hearings on the matter. The most spectacular of these hearings occurred after the subcommittee released a report that accused (then) British
Member of Parliament A member of parliament (MP) is the representative in parliament of the people who live in their electoral district. In many countries with bicameral parliaments, this term refers only to members of the lower house since upper house members o ...
(MP)
George Galloway George Galloway (born 16 August 1954) is a British politician, broadcaster, and writer who is currently leader of the Workers Party of Britain, serving since 2019. Between 1987 and 2010, and then between 2012 and 2015, Galloway was a Member o ...
, Russian politician
Vladimir Zhirinovsky Vladimir Volfovich Zhirinovsky, ''né'' Eidelshtein (russian: link=false, Эйдельштейн) (25 April 1946 – 6 April 2022) was a Russian right-wing populist politician and the leader of the Liberal Democratic Party of Russia (LDPR) fr ...
, and former French Interior Minister
Charles Pasqua Charles Victor Pasqua (18 April 192729 June 2015) was a French businessman and Gaullist politician. He was Interior Minister from 1986 to 1988, under Jacques Chirac's '' cohabitation'' government, and also from 1993 to 1995, under the government ...
of receiving oil allocations from Iraq in return for being political allies of
Saddam Hussein Saddam Hussein ( ; ar, صدام حسين, Ṣaddām Ḥusayn; 28 April 1937 – 30 December 2006) was an Iraqi politician who served as the fifth president of Iraq from 16 July 1979 until 9 April 2003. A leading member of the revolutio ...
's regime. Galloway, in an unusual appearance of a British MP before a US Senate subcommittee, responded angrily to the allegations against him in a confrontational public hearing which drew much media attention in both America and Britain. Galloway denied the allegations. It is estimated that as much as $10 billion to $21.3 billion went unaccounted for and/or was directed to Saddam Hussein and his government in the form of kickbacks and oil smuggling. Record keeping of illegal behaviour is hard to come by and rare at best. To date, only 1 of 54 internal UN audits of the Oil-for-Food Programme has been made public. The UN has refused all requests for its audits.
Warren Hoge Warren McClamroch Hoge (born April 13, 1941) is an American journalist, much of whose long career has been at ''The New York Times''. Life and career Hoge is the son of James F. Hoge, Sr. (1901–72) and Virginia McClamroch Hoge. His elder br ...
alleged that the American government was aware of the scandal and chose to not prevent the smuggling because their allies Turkey and Jordan benefited from the majority of the smuggled oil. US Senator
Carl Levin Carl Milton Levin (June 28, 1934 – July 29, 2021) was an American attorney and politician who served as a United States senator from Michigan from 1979 to 2015. A member of the Democratic Party, he was the chair of the Senate Armed Services ...
(D-
Michigan Michigan () is a state in the Great Lakes region of the upper Midwestern United States. With a population of nearly 10.12 million and an area of nearly , Michigan is the 10th-largest state by population, the 11th-largest by area, and t ...
) is quoted in an interview for the ''New York Times'' as saying, "There is no question that the bulk of the illicit oil revenues came from the open sale of Iraqi oil to Jordan and to Turkey, and that that was a way of going around the Oil-for-Food Programme nd thatwe were fully aware of the bypass and looked the other way."


Indictments

On 6 January 2006,
South Korea South Korea, officially the Republic of Korea (ROK), is a country in East Asia, constituting the southern part of the Korea, Korean Peninsula and sharing a Korean Demilitarized Zone, land border with North Korea. Its western border is formed ...
n businessman
Tongsun Park Tongsun Park (born in 1935 Sunch'ŏn, Korea) is a former South Korean lobbyist. He was involved in two political money-related scandals: Koreagate scandal in the 1970s, and the Oil-for-Food Program scandal of the 2000s. Park had a reputation a ...
was arrested by the FBI in
Houston Houston (; ) is the most populous city in Texas, the most populous city in the Southern United States, the fourth-most populous city in the United States, and the sixth-most populous city in North America, with a population of 2,304,580 ...
after he was indicted for illegally accepting millions of dollars from Iraq in the UN Oil-for-Food Programme. The criminal charges against him were unsealed in a U.S. District Court in Manhattan. After an investigation by the
Federal Bureau of Investigation The Federal Bureau of Investigation (FBI) is the domestic intelligence and security service of the United States and its principal federal law enforcement agency. Operating under the jurisdiction of the United States Department of Justice ...
's New York Field Office, on 16 January 2007,
Benon Sevan Benon Vahe Sevan (born December 18, 1937 Nicosia, Cyprus) was the head of the United Nations' Oil-for-Food Programme, established in 1996 and charged with preventing Iraq's government from using the proceeds from oil exports for anything but food ...
was indicted by prosecutors from the Southern District of New York for taking about $160,000 in bribes.
Michael J. Garcia Michael John Garcia (born October 8, 1961) is an American lawyer, judge and former Republican government official. Since February 2016, he has served as an Associate Judge of the New York Court of Appeals, that state's highest court. He is a form ...
, the U.S. Attorney for the Southern District of New York, issued a warrant through
Interpol The International Criminal Police Organization (ICPO; french: link=no, Organisation internationale de police criminelle), commonly known as Interpol ( , ), is an international organization that facilitates worldwide police cooperation and cr ...
for the arrest of Sevan at his home in Cyprus, as well as a warrant for Efraim "Fred" Nadler, a New York businessman who was indicted on charges of channelling the illegal payments to Sevan. Nadler's whereabouts are unknown.


Daimler AG Kickbacks Case

On 1 April 2010,
Daimler AG The Mercedes-Benz Group AG (previously named Daimler-Benz, DaimlerChrysler and Daimler) is a German multinational automotive corporation headquartered in Stuttgart, Baden-Württemberg, Germany. It is one of the world's leading car manufactu ...
pleaded guilty to bribery charges brought by the U.S. Department of Justice and the U.S. Securities and Exchange Commission and will pay $185 million (US) as settlement, but remains subject to a two-year deferred prosecution agreement and oversight by an independent monitor. The German automaker of
Mercedes-Benz Mercedes-Benz (), commonly referred to as Mercedes and sometimes as Benz, is a German luxury and commercial vehicle automotive brand established in 1926. Mercedes-Benz AG (a Mercedes-Benz Group subsidiary established in 2019) is headquarte ...
vehicles was accused of violating the terms of the United Nations' Oil for Food Program with Iraq by including kickbacks 10 percent of the contract values to the Iraqi government. The SEC said the company earned more than $4 million from the sale of vehicles and spare parts. The SEC case was sparked in 2004 after David Bazzetta, a former
auditor An auditor is a person or a firm appointed by a company to execute an audit.Practical Auditing, Kul Narsingh Shrestha, 2012, Nabin Prakashan, Nepal To act as an auditor, a person should be certified by the regulatory authority of accounting and a ...
at then DaimlerChrysler Corp, filed a whistle-blower complaint after he was fired for raising questions about
bank account A bank account is a financial account maintained by a bank or other financial institution in which the financial transactions between the bank and a customer are recorded. Each financial institution sets the terms and conditions for each type of ...
s controlled by Mercedes-Benz units in South America. Bazzetta alleged that he learned in a July 2001 corporate audit
executive committee A committee or commission is a body of one or more persons subordinate to a deliberative assembly. A committee is not itself considered to be a form of assembly. Usually, the assembly sends matters into a committee as a way to explore them more ...
meeting in
Stuttgart Stuttgart (; Swabian: ; ) is the capital and largest city of the German state of Baden-Württemberg. It is located on the Neckar river in a fertile valley known as the ''Stuttgarter Kessel'' (Stuttgart Cauldron) and lies an hour from the Sw ...
that
business unit A strategic business unit (SBU) in business strategic management, is a profit center which focuses on product offering and market segment. SBUs typically have a discrete marketing plan, analysis of competition, and marketing campaign, even though ...
s "continued to maintain secret bank accounts to bribe foreign
government official An official is someone who holds an office (function or mandate, regardless whether it carries an actual working space with it) in an organization or government and participates in the exercise of authority, (either their own or that of their su ...
s", though the company knew the practice violated U.S. laws. The investigation for the case also revealed that Daimler made some $56 million in bribes related to more than 200 transactions in 22 countries that earned the company $1.9 billion in revenue and at least $91.4 million in illegal profits. "Using offshore bank accounts, third-party agents and deceptive pricing practices, these companies aimler AG and its subsidiariessaw foreign bribery as a way of doing business", said
Mythili Raman Mythili Raman is a Tamil American lawyer and the former acting Assistant Attorney General for the United States Department of Justice's Criminal Division. Early life and family Mythili is the daughter of Athishdam Tharmaratnam and grand daughte ...
, a principal deputy in the Justice Department's criminal division. "It is no exaggeration to describe corruption and bribe-paying at Daimler as a standard business practice",
Robert Khuzami Robert S. Khuzami (; born August 2, 1956) was the Deputy U.S. Attorney for the United States Attorney's Office for the Southern District of New York until March 22, 2019. He previously was a United States federal prosecutor and Assistant United ...
, director of the SEC's enforcement division, said in a statement. Judge Richard J. Leon of United States District Court in Washington, approved the plea agreement and settlement, calling it a "just resolution."


See also

* Iraq sanctions *
Economy of Iraq The economy of Iraq is dominated by the oil sector, which has provided about 99.7% of foreign exchange earnings during its modern history. As of 2021, the oil sector provides about 92% of foreign exchange earnings. Iraq's hitherto agrarian econom ...
* Management of Iraq Reconstruction Programme * Oil-for-Food Program Hearings *
Fuel vs food Food versus fuel is the dilemma regarding the risk of diverting farmland or crops for biofuels production to the detriment of the food supply. The biofuel and food price debate involves wide-ranging views, and is a long-standing, controversial o ...
* Oil price


Endnotes

*


External links


Sites


Independent Inquiry into the United Nations Oil-for-Food Programme

Resolution 986 authorizing the Oil-for-Food Programme



Oil-for-Food Facts
– website of the UN Foundation an independent UN political booster organization * SourceWatch o
Oil-for-Food Programme
*


Articles

''2007'' * europaticker
oils for Food – scandal in Iraq: Transparency Germany inserts complaint against 57 German enterprises


Oil-for-Food scandal: the Houston-based defendants ''2005''
Putting Oil-for-Food in Perspective
JURIST A jurist is a person with expert knowledge of law; someone who analyses and comments on law. This person is usually a specialist legal scholar, mostly (but not always) with a formal qualification in law and often a legal practitioner. In the U ...
, 2 November 2005
Oil for food: A shared failure – Still a long way to gotransparency.org
27 October 2005
"U.N.: 2,200 Companies Gave Iraq Illicit Funds"
Nick Wadhams & Edith Lederer,
Associated Press The Associated Press (AP) is an American non-profit news agency headquartered in New York City. Founded in 1846, it operates as a cooperative, unincorporated association. It produces news reports that are distributed to its members, U.S. new ...
,
Yahoo Yahoo! (, styled yahoo''!'' in its logo) is an American web services provider. It is headquartered in Sunnyvale, California and operated by the namesake company Yahoo! Inc. (2017–present), Yahoo Inc., which is 90% owned by investment funds ma ...
News, 27 October 2005 * ''
Financial Times The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...
'', 13 January 2005
"US ignored warning on Iraqi oil smuggling"
* CNN.com
Documents: U.S. condoned Iraq oil smuggling
2 February 2005 * BBC, 15 April 2005
Row deepens over UN oil scandal
* ''
The Guardian ''The Guardian'' is a British daily newspaper. It was founded in 1821 as ''The Manchester Guardian'', and changed its name in 1959. Along with its sister papers '' The Observer'' and '' The Guardian Weekly'', ''The Guardian'' is part of the ...
'', 17 May 2005
US 'backed illegal Iraqi oil deals'
* ''AlterNet'', 4 October 2005
"Kofi and the Scandal Pimps"
* ''
Le Monde ''Le Monde'' (; ) is a French daily afternoon newspaper. It is the main publication of Le Monde Group and reported an average circulation of 323,039 copies per issue in 2009, about 40,000 of which were sold abroad. It has had its own website si ...
'', 13 October 2005
M. Boidevaix aurait été "en contact constant avec le quai d'Orsay"
* ''
India Today ''India Today'' is a weekly Indian English-language news magazine published by Living Media India Limited. It is the most widely circulated magazine in India, with a readership of close to 8 million. In 2014, ''India Today'' launched a new on ...
'', 13 December 2005
"Oil-for-food scandal: How Natwar Singh used 2001 Iraq visit to secure deals"
''2004''
The U.N. Oil for Food scandal
– ''
Washington Times ''The Washington Times'' is an American conservative daily newspaper published in Washington, D.C., that covers general interest topics with a particular emphasis on national politics. Its broadsheet daily edition is distributed throughout ...
'', March 2004 * BBC, 19 March 2004
Galloway accepts libel damages
*
Jean-David Levitte Jean-David Levitte (born 14 June 1946) is a French diplomat who was France's Permanent Representative to the United Nations from 2000 to 2002 and Ambassador to the United States from 2002 to 2007. He was also a diplomatic advisor and sherpa to ...
, ''
Los Angeles Times The ''Los Angeles Times'' (abbreviated as ''LA Times'') is a daily newspaper that started publishing in Los Angeles in 1881. Based in the LA-adjacent suburb of El Segundo since 2018, it is the sixth-largest newspaper by circulation in the ...
'', 7 April 2004
First 'Freedom Fries,' Now Oil-for-Food Lies; Op ed of French ambassador to the US
* Claudia Rosett, ''Commentary'', May 2004
"What Did Kofi Annan Know, and When Did He Know It?"

Hankes-Drielsma connections to Chalabi
May 2004
The U.N. Is Us: Exposing Saddam Hussein's Silent Partner
U.S. Complicity in the Oil Smuggling
Harper's Magazine ''Harper's Magazine'' is a monthly magazine of literature, politics, culture, finance, and the arts. Launched in New York City in June 1850, it is the oldest continuously published monthly magazine in the U.S. (''Scientific American'' is older, b ...
December 2004 {{DEFAULTSORT:Oil-For-Food Programme United Nations Oil-for-Food scandal 986 1995 in international relations Sanctions against Iraq