Over 2,000 Companies Paid Oil-for-Food Bribes

[theHawk]

WASHUNITED NATIONS — About 2,200 companies in the U.N. Oil-for-Food program, including corporations in France, Germany and Russia, paid a total of $1.8 billion in kickbacks and illicit surcharges to Saddam Hussein's government, a U.N.-backed investigation said in a report released Thursday.

The report from the committee probing claims of wrongdoing in the $64 billion program said prominent politicians also made money from extensive manipulation of the U.N. Oil-for-Food program in Iraq.

The investigators reported that companies and individuals from 66 countries paid illegal kickbacks using a variety of ways, and those paying illegal oil surcharges came from, or were registered in, 40 countries.

• Click here to view the full report. (pdf)

Germany-based automaker DaimlerChrysler, meanwhile, appears to have paid just $7,000 on a contract worth $70,000. DaimlerChrysler AG didn't immediately return a call seeking comment from its offices in Stuttgart, Germany.

In July, DaimlerChrysler said it had been asked for a statement and documents regarding its role in the oil-for-food program, according to documents filed with the Securities and Exchange Commission.

The report said, for example, that Brussels-based Volvo Construction Equipment paid $317,000 in extra fees to the Iraqi government on a $6.4 million contract. Volvo Construction is part of Swedish-based Volvo Group, which referred all questions to Volvo Construction Equipment's headquarters in Brussels. The group is separate from Volvo automobiles, which is owned by Ford.


Beatrice Cardon, a Volvo spokeswoman, said she was unaware the company was listed in the U.N. report, or what the alleged payments were for.

"I have no clue. This is the first I hear about it," Cardon said.

The report alleged that Jean-Bernard Merrimee, France's former U.N. ambassador, received $165,725 in commissions from oil allocations awarded to him by the Iraqi regime. He is now under investigation by the French authorities.

Merrimee "began receiving oil allocations that would ultimately total approximately 6 million barrels from the government of Iraq," the report said.

Other so-called "political beneficiaries" included British lawmaker George Galloway; Roberto Formigoni, the president of the Lombardi region in Italy, and the Rev. Jean-Marie Benjamin, a priest who once worked as an assistant to the Vatican secretary of state and became an activist for lifting Iraqi sanctions.

Thursday's final report of the investigation led by former Federal Reserve chairman Paul Volcker strongly criticizes the U.N. Secretariat and Security Council for failing to monitor the program and allowing the emergence of front companies and international trading concerns prepared to make illegal payments.

In a letter to U.N. Secretary General Kofi Annan, the committee said its task had been to find mismanagement and evidence of corruption, and "unhappily, both were found and have been documented in great detail."

It said responsibility for the program's failure should start with the U.N. Security Council, which is dominated by its five permanent members: Britain, China, France, Russia and the United States.

"The program left too much initiative with Iraq," the letter said. "It was, as one past member of the council put it, a compact with the devil, and the devil had means of manipulating the program to his ends."

The Oil-for-Food program was one of the world's largest humanitarian aid operations, running from 1996-2003.

Under the program, Iraq was allowed to sell limited and then unlimited quantities of oil provided most of the money went to buy humanitarian goods. It was launched to help ordinary Iraqis cope with U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait.

But Saddam, who could choose the buyers of Iraqi oil and the sellers of humanitarian goods, corrupted the program by awarding contracts to — and getting kickbacks from — favored buyers, mostly parties who supported his regime or opposed the sanctions.

Tracing the politicization of oil contracts, the new report said Iraqi leaders in the late 1990s decided to deny American, British and Japanese companies allocations to purchase oil because of their countries' opposition to lifting sanctions on Iraq.

At the same time, it said, Iraq gave preferential treatment to France, Russia and China which were perceived to be more favorable to lifting sanctions and were also permanent members of the Security Council.

Volcker's previous report, released in September, said lax U.N. oversight allowed Saddam's regime to pocket $1.8 billion in kickbacks and surcharges in the awarding of contracts during the program's operation from 1997-2003.

According to the new findings, Iraq's largest source of illicit income from the Oil-for-Food program was the more than $1.5 billion from kickbacks on humanitarian contracts.

Volcker's Independent Inquiry Committee calculated that more than 2,200 companies worldwide paid kickbacks to Iraq in the form of "fees" for transporting goods to the interior of the country or "after-sales-service" fees, or both.

Tables accompanying the report give a detailed look at the value of each company's contracts and the amount of money it paid in kickbacks.

According to the findings, the Banque Nationale de Paris S.A., known as BNP, which held the U.N. Oil-for-Food escrow account, had a dual role and did not disclose fully to the United Nations the firsthand knowledge it acquired about the financial relationships that fostered the payment of illegal surcharges.

The report chronicles Saddam's manipulation of the program and examines in detail 23 companies that paid kickbacks on humanitarian contracts including Iraqi front companies, major food providers, major trading companies, and major industrial and manufacturing companies.

According to the findings, the program was just under three years old when the Iraqi regime began openly demanding illicit payments from its customers. The report said that while U.N. officials and the Security Council were informed, little action was taken.

The report is the fifth by Volcker and wraps up a year-long, $34 million investigation that has faulted Annan, his deputy, Canada's Louise Frechette, and the Security Council for tolerating corruption and doing little to stop Saddam's manipulations.

The smuggling of Iraqi oil outside the program in violation of U.N. sanctions poured much more money — $11 billion — into Saddam's coffers during the same period, according to the report.

http://www.foxnews.com/story/0,2933,173707,00.html


And I thought it was just the Imperialist American companies that were exploiting the people of the world !!

 

[musicman]

Tried to point you, Hawk - gotta wait awhile. Great info!

 

[Annie]

Tried to point you, Hawk - gotta wait awhile. Great info!

I did so.

 

[Annie]

As you can see, this link is rather old, but I do find it so interesting today, did back then too! There are links, but how many are still to be found? I do know the definition of American Jacksonians should still be there:

http://denbeste.nu/cd_log_entries/2003/01/Supposetherewastreachery.shtml

Stardate 20030120.1652

(Captain's log): Let's do some supposing.

Suppose we (the UK and US) do ignore all the pressure and last-minute finagling and do actually attack Iraq, which I think now is virtually certain.

Suppose we win, which is absolutely certain.

And suppose, once we've done so, and have occupied Iraq and have full (really full, not UN full) access to Iraq's records and can truly find what they have, that we find that everything we've been saying about their WMDs is really true; that they have chem and bio weapons and banned delivery systems, and are near to developing nukes, which I also think is extremely likely.

One more and the most important: suppose that the records also show that during the 1990's companies in France or Germany (or both) actively and deliberately broke the sanctions and sold equipment and supplies to Iraq which helped it to create these things, and that the governments of Germany and France knew and approved of this and actively helped. That's the biggest and most speculative suppose.

On that I can't place a probability; there's no way of knowing right now whether this happened, or whether such records will be found. But I don't consider the possibility of this to be vanishingly small. I think the chance is decent that some such illegal sales to Iraq took place, but I can't say how likely it is that the governments there actively approved of it, or at least deliberately ignored it (which is bad enough). That's the wild card.

But we're supposing now, and so what we've supposed is that after we conquer Iraq we come into possession of undisputable proof of treachery by the German and/or French governments, who are supposedly our allies. What should be done in that case? What result would this have?

The first question our governments would face is whether to reveal it. There's a case to be made for keeping it secret and using it for blackmail. (Which is why I will become extraordinarily suspicious if there's a notable change in tone and behavior from either or both nations about two months after the war ends.)

But if such information existed and were revealed, either deliberately or because it couldn't be concealed, then what?

I think at that point that anything resembling formal alliance would have to end. The degree of fury this would cause in the American people should not be underestimated, and it would become politically impossible for the US government to continue to treat either nation in a friendly manner. Our relations with them would come to resemble those we have with China if not being worse.

Either the US would formally pull out of NATO or else issue an "either they go or we do" ultimatum to get Germany and France ejected. And all American forces in Germany would leave as soon as they possibly could. (Such forces as we kept in Europe would probably move to either Poland or the Czech Republic, both of which have expressed interest in hosting them.)

NATO without the US is a meaningless joke, and everyone knows it, especially since the UK would almost certainly also leave, and they have the second most powerful military in the alliance. But it's not clear the alliance could survive anyway when it turned out that members had done that kind of thing against one another. And enthusiasm by eastern European nations about joining NATO would fizzle. So I don't see how NATO would survive in any meaningful sense.

It seems unlikely that this would lead to an immediate and direct war with the US, though formal diplomatic relations would obviously go into the toilet as a result. And even without any formal government action, I think that the European companies involved would find it difficult thereafter to make any business deals in America, and this would cause quite substantial economic havoc, here certainly, but particularly in Europe. In fact, there would be a de facto economic boycott here of the majority of German and French products (and to a lesser extent of other European producers as well, as a practical matter) as the direct result of millions of citizens making their own choices, whether the US government declared formal trade sanctions or not. (Which means that the big winner would be Japan, whose trade with the US would rise. This might well be enough lift them out of their economic malaise and give them the slack to work on the underlying structural problems in their economy.)

This would also really hurt the tourist industries in both nations. That happened to some extent after 9/11 because people feared to fly, but this would be worse and very long lasting, and that too would contribute to a general downturn in their economies. You can basically forget about any significant number of Americans traveling to either nation and spending their dollars there. What you're looking at is the distinct possibility of Europe's economy imploding as a result of cascading failures.

And if it were shown that at least one UNSC veto power had been violating UNSC-approved sanctions, the UN is dead. Just as with NATO, the UN without the US is an empty joke and the majority of the people of the US would never again support it.

A different question would be what political effect this would have on the EU. How would other nations in the EU react to this kind of perfidy? Certainly it would mean that the UK would become far less likely to integrate, but it would surely also affect the attitudes in Italy and Spain and the Netherlands.

The biggest question, and the one I'm least able to analyze, would be how German and French voters would react to this. If the voters of both nations immediately repudiated the governments involved, and if new elections in both nations resulted in something other than "meet the new boss, same as the old boss", and if there were immediate criminal investigations against the executives at the corporations in question, then it might be possible to salvage something from the diplomatic wreckage.

But if the voters of either or both nations actually ended up demonstrating approval, or even just apathy, via their voting patterns then you face the possibility that this actually could lead, eventually, to another war in Europe, between nuclear armed powers.

It's evident that no matter how it developed it would be really, really bad. Even the best plausible case outcome would be a catastrophe.

The reason I bring this up is that the sheer tenacity with which Chirac and Schröder continue to do everything in their power, even at this late date, to try to prevent our attack seems to go well beyond pandering to their own internal leftist power bases, or any exercise of true conscience (even if I believed that had anything to do with their opposition to this war). It's reached the point where their efforts are demonstrably damaging their relationships with us, for instance, and that doesn't seem to have diverted them even though their chance now of stopping us is damned near nil. They're paying a big certain long term price in hopes of achieving something which is very unlikely. Why?

France is even threatening a veto, despite the fact that it's become obvious even to the Guardian that it won't matter, and that the US is going to move with or without any further UNSC resolution. (I don't actually think we're even going to ask.)

It doesn't make sense in terms of trying to preserve economic interests (i.e. contracts, reimbursement of debts). If that's what they were concerned about, they'd have switched over by now to toadying up to us. The more they resist now, the more likely it is that any contracts they've made will be null and any debts owed them from Iraq won't be paid.

Indeed, it doesn't even make sense to me in terms of fear of an uprising by their Muslim minorities. Were that it, then they'd be accepting the inevitability of the attack and we'd be hearing about internal mobilization of the German and French militaries to prevent internal revolt. A Muslim insurrection can be dealt with in more than one way, and other ways may not have as good a result but definitely have a higher likelihood of success. Why have they bet all their chips on this one, which is such a long shot?

It seems as if they're trying to avoid some much more awful fate, and as the odds against them lengthen and their efforts to prevent war become ever more frantic, it seems to suggest that the fate they're trying to avoid is monumentally bad.

If they (Chirac and Schröder) know that they face the scenario I described above after we invade, that would definitely explain their behavior, because preventing Anglo-American occupation of Iraq is the only conceivable way they could prevent it. If this is the case, then since no other way exists to avoid this fate and since the consequences of it are dreadful, it would make sense to continue the lost cause of trying to prevent our attack.

So the more they persist even as it becomes ever more hopeless, the more I find myself worrying that they are trying to cover up something really, really big.

I do hope I'm wrong, though.

Update: At least three people have written to say they thought I was exaggerating the degree to which Americans would be infuriated by this, and wondering if I was deliberately exaggerating for effect. No, I was completely serious, but I guess it wasn't obvious so I'll explain it.

It would not be the case that 100% of Americans would get angry, because you won't find anything that 100% of Americans agree on. But America's Jacksonians would be enraged. Mead says, in part:

To understand how Crabgrass Jacksonianism is shaping and will continue to shape American foreign policy, we must begin with another unfashionable concept: Honor. Although few Americans today use this anachronistic word, honor remains a core value for tens of millions of middle-class Americans, women as well as men. The unacknowledged code of honor that shapes so much of American behavior and aspiration today is a recognizable descendent of the frontier codes of honor of early Jacksonian America. The appeal of this code is one of the reasons that Jacksonian values have spread to so many people outside the original ethnic and social nexus in which Jacksonian America was formed.

 

[Annie]

... Jacksonian society draws an important distinction between those who belong to the folk community and those who do not. Within that community, among those bound by the code and capable of discharging their responsibilities under it, Jacksonians are united in a social compact. Outside that compact is chaos and darkness. The criminal who commits what, in the Jacksonian code, constitute unforgivable sins (cold-blooded murder, rape, the murder or sexual abuse of a child, murder or attempted murder of a peace officer) can justly be killed by the victims’ families, colleagues or by society at large—with or without the formalities of law. In many parts of the United States, juries will not convict police on almost any charge, nor will they condemn revenge killers in particularly outrageous cases. The right of the citizen to defend family and property with deadly force is a sacred one as well, a legacy from colonial and frontier times.

For fifty years, Americans have thought of the Europeans as being "our folks", of being part of our community. That's part of why Jacksonians supported NATO even when others didn't, and were willing to risk nuclear destruction of the US in order to keep western Europe safe. But when someone who is part of the "community", someone who is "our folks", treacherously betrays the other members of the community, then that person is no longer thought of as being part of the community and if they're not killed outright or otherwise deeply punished, they will at the very least no longer be trusted and will be dealt with as one of the outsiders, to be watched warily and to which one never turns one's back. If you betray a Jacksonian once, you don't get a chance to do it twice.

Jacksonians have been the solid core of the large group of Americans who have favored taking Saddam out for all of the last ten years, and they're the solid core of those who favor war now. They're also the solid core of Bush's constituency; he ignores them at his peril. (And in any case, Bush himself is a Jacksonian. One of the reasons why he announced his refusal to deal with Arafat was that he decided Arafat wasn't honorable, which is fucking well true.)

This has happened before. There's a clear historical precedent. A lot of people think that America finally got into WWI because of the sinking of the Lusitania. The problem with that idea is that the Lusitania was sunk in 1915, but the US didn't actually enter the war until 1917.

It was actually because of the Zimmermann telegram, which is widely considered to be the most important single decryption of all time in terms of its overall influence on the course of war and the path of history. In 1917, German foreign secretary Zimmerman sent an encrypted message to the German ambassador in Mexico offering an alliance to the Mexican government, and offering them legal recognition of their right to retake the territory they'd lost in 1848 (which is to say, California, Nevada, Arizona, New Mexico, and Texas earlier); the idea was that if the US came into the war against Germany that Mexico would then attack the US and keep us busy. The British intercepted the message and decrypted it, and used it to bring the US into the war. (Mexico declined the offer, with thanks.) This was seen by Americans (especially America's Jacksonians) as a deep and intolerable betrayal by Germany.

At the time Germany wasn't considered a friend, but the general Jacksonian impulse at the time was to stay the hell out of Europe's war. This turned that tide, and it was mainly America's Jacksonians who were then firmly in favor of fighting the Kaiser and of not stopping until he was gone. Jacksonians will not stand for that kind of thing. Mead, again, says:

Another aspect of Jacksonian foreign policy is the aforementioned deep sense of national honor and a corresponding need to live up to—in actuality and in the eyes of others—the demands of an honor code. The political importance of this code should not be underestimated; Americans are capable of going to war over issues of national honor. The War of 1812 is an example of Jacksonian sentiment forcing a war out of resentment over continual national humiliations at the hand of Britain. (Those who suffered directly from British interference with American shipping, the merchants, were totally against the war.) At the end of the twentieth century, it is national honor, more than any vital strategic interest, that would require the United States to fulfill its promises to protect Taiwan from invasion.

... Jacksonian America has clear ideas about how wars should be fought, how enemies should be treated, and what should happen when the wars are over. It recognizes two kinds of enemies and two kinds of fighting: honorable enemies fight a clean fight and are entitled to be opposed in the same way; dishonorable enemies fight dirty wars and in that case all rules are off.

An honorable enemy is one who declares war before beginning combat; fights according to recognized rules of war, honoring such traditions as the flag of truce; treats civilians in occupied territory with due consideration; and—a crucial point—refrains from the mistreatment of prisoners of war. Those who surrender should be treated with generosity. Adversaries who honor the code will benefit from its protections, while those who want a dirty fight will get one.

America's Jacksonians were the ones who were also most infuriated by the Pearl Harbor attack. So if an enemy can raise that degree of ire, how much worse would it be if we discovered that nations we had considered friends, nations we had actively been protecting for fifty years, were then discovered to have been actively collaborating with a nation Jacksonians considered and still consider an enemy, to create weapons that Jacksonians consider a threat to the US? Who had been pretending to be friends while actually acting as enemies?

No, I do not think that they would ignore it, shrug their shoulders, and move on. Others, maybe, but America's Jacksonian core would consider that to be deeply dishonorable, and any nation found to have done something like that would never be trusted again and would never be dealt with on any basis besides suspicion. And any American politician who tried to make up would find himself voted out of office.

The situation with respect to Saudi Arabia is somewhat different. I don't think that America's Jacksonians consider the Saudis to be "friends", and so far they don't really trust the Saudi government. But they don't yet consider it to have been an active party in the attacks against us. It's true that the majority of those who attacked us were Saudis, but they're also considered renegades for the moment. If that ever changes, watch out!

It's noteworthy that it is America's Jacksonians who remain the biggest stumbling block to normalization of relations with Viet Nam (30 years after the war). They're also the ones who most strongly favor keeping sanctions against Cuba in place (45 years after the revolution), and as Mead points out above they're the ones who most steadfastly support Taiwan (55 years after the Nationalists retreated there from mainland China). Jacksonians have a very long memory.

Again, these are generalizations; I'm Jacksonian and I do favor normalization of relations with Viet Nam (though not with Cuba, and I don't favor Taiwanese reunification). But though this nation has made some movement towards lowering barriers between us and Viet Nam, and though the government there has spent the last twenty years trying to bring that about, it hasn't happened. If anything Viet Nam suffered more in that war than we did, but they seem to have forgiven us. America's Jacksonians have not forgotten, though, and that's why we now have an envoy there, but we do not yet have an ambassador. If you see someone with a sticker on his car that says, "Hanoi! Give us back our POW-MIAs!" then you're looking at a Jacksonian.

It's entirely possible that this kind of evidence would have no effect at all in Europe. They might shrug their sophisticated nuanced shoulders and go about their business. America's tranzi leftist fringe would secretly cheer. Wilsonians would roll their eyes, roll up their sleeves, and get back to negotiating. But not Jacksonians.

A very large number of Americans would consider this a deep and important discovery of absolutely intolerable behavior, and there would be too many of them to ignore politically. Even if the Europeans themselves didn't care, it would be impossible for the US government to not react strongly. The political effect of US withdrawal from NATO and the UN, which would be unavoidable, and the economic effect of American de facto broad boycott of European goods and European vacations would have drastic negative effect on the European economy. And the international side effects of extremely cool relations between the US and France and Germany would also radiate outwards.

The US and France/Germany have already been playing some of the "them or us but not both" game with third parties. The US has been making military deals with nations in Eastern Europe (especially regarding things like the ICC, where several nations have already agreed that they would not refer any American soldier to the ICC as a result of things done in their territory), and that's become a political issue in Europe, with the EU condemning those kinds of deals. But so far that kind of thing has been low level.

What happens if nations like Poland and Ukraine are basically faced with having to choose sides? For that is what it amounts to; no one would be permitted to be extremely friendly with both. Anyone being extremely friendly with either Germany or France would not be permitted to be extremely friendly with the US. What I see resulting from this would be a drastic increase in the rate at which the trans-Atlantic political gulf has been widening, as a result of that gulf coming out in the open and formally becoming American policy no matter what the Europeans did about it.

The only thing that would even remotely mollify American Jacksonians would be a clear indication that the people of France and Germany had themselves repudiated the leaders responsible for this. If French and German voters clearly indicate that they hate what happened, and dump all of the leaders responsible, and put a lot of them in jail, and if the new governments there clearly state that those who did it were indeed renegades, and apologize, then America's Jacksonians would then permit relations at a somewhat cooler level to continue.

If that doesn't happen, you can forget about warm relations between the US and France/Germany for at least fifty years (or until the next revolution in either nation). As long as there was perceived to be political continuity, they'd be on the same shitlist as Cuba.

All of this, of course, based on the original supposition that we come into indisputable evidence of treachery against us committed with the approval of the French and German governments.

 

[Johnney]

And I thought it was just the Imperialist American companies that were exploiting the people of the world !!

so now we get to sit back and watch all the buttholes defend this. how much you want to bet haliburton will be dragged back up...(well they did it too and first!)

 

[ekrem]

Russia is very much in this scandal.

since 1990 almost 1/3 of the oil-contracts where signed with russians. Mjor russian policians are in this such like 2nd president of the Parliament "Wladimir Schirinowski" and head of the communistic Party Mr. Gennadi Sjuganow...


The foreign minister Lawrow said today that almost all documents from which this UN-Investigation was made are falsified and not true...


P.S: also 133 turkish firms are mentioned in this document.