Thousands of firms being probed in UN-Iraq program
(Reuters)
Updated: 2005-08-10 13:44

Thousands of companies among the 4,500 that bought oil and sold goods to Iraq under a U.N. program are being investigated for kickbacks, bribes and illegal surcharges, a key investigator said on Tuesday, reported Reuters.

A U.N.-established inquiry into the now-defunct oil-for-food program plans a comprehensive analysis in September on the role of U.N. officials and agencies in administering the $64 billion humanitarian program for Iraq.

Another report is due in October on thousands of the companies that contracted for Iraqi oil or sold food, medicine and other supplies.

"Our very last report is going to deal with some thousands of companies in tens of countries that paid kickbacks, that paid bribes to solicit oil allocations and the sale of humanitarian goods," said South African Judge Richard Goldstone, one of three commissioners heading the probe.

Goldstone, in an interview with the BBC program "Hardtalk," said companies and people would be named and those fingered would have a chance to respond.

"Thousands of letters have gone out to them telling them that we are going to name them and what we are going to say about them and offering them the opportunity of making representations before we do so," he said.

The U.N. program, which began in December 1996 and ended in 2003, was set up to ease the impact of economic sanctions imposed after Baghdad's troops invaded Kuwait in 1990. But Iraq was allowed to choose contractors, leaving ample room for fraud.

Goldstone said the October report would also "deal with the huge oil smuggling" by then-President Saddam Hussein's government.

A CIA report last October found that corruption in the oil-for-food program amounted to some $1.7 billion. It said Saddam made another $8 billion through oil exports outside of the program to Jordan, Syria and elsewhere.

On Monday, the inquiry, headed by Paul Volcker, a former U.S. Federal Reserve chairman, released an explosive interim report that cited Benon Sevan, the Cypriot head of the U.N. program, for getting kickbacks of nearly $150,000.

It also accused a procurement official, Alexander Yakovlev, a Russian, of accepting bribes of about $1 million for contracts he negotiated, most of them outside of the program.

"These are senior officers of the United Nations," Goldstone told Reuters in an earlier interview. "It is serious for any organization to have senior officials benefiting illegally."

CONGRESSIONAL POLITICS?

Goldstone dismissed U.S. congressional investigations criticizing his panel for not handing over documents. "If anyone ... expected us to open all of our documents before the investigation is complete for public examination, this is just really a ridiculous way to suggest that an investigation such as ours should be conducted," he said.

He said while there was a "genuine interest" on the part of Congress in probing corruption in the program, politics played a large part.

"My impression is that for political ends many members of Congress want to get in on this act because it suits them politically. It is good publicity. They get television time," he said.

On the other hand, Goldstone acknowledged that the publicity about abuses of the program forced U.N. Secretary-General Kofi Annan to call for a wide-ranging investigation.

"There can be no doubt that it was the increasing publicity ... about allegations of corruption with the oil-for-food program that, I think, forced the secretary-general's hand," he said.