Saddam corrupted oil-for-food deals, interviews reveal

Officials were flown out of Iraq for their own safety during the interviews.
NEW YORK (AP) -- Interviews with dozens of former and current Iraqi officials by congressional investigators have produced new evidence that Saddam Hussein micro-managed business deals under the U.N. oil-for-food program to maximize political influence with important foreign governments like Russia and neighboring Arab states.
The Iraqi officials, who were flown outside of Iraq for their own safety during the interviews, provided a list of foreign companies favored by Saddam and his top lieutenants for import contracts under the U.N. program. They also revealed a parallel blacklist of companies that the then-Iraq leader disqualified from getting deals, investigators told The Associated Press.
The precaution of redoubled secrecy comes after an Iraqi official involved in the oil-for-food investigation of corruption died in a car bombing in late June after speaking with investigators from the House International Relations Committee. The official, Ehsan Karim, who headed the Iraqi Finance Ministry's audit board, was interviewed in Amman, Jordan, on May 21.
Front companies
The Iraqi officials also helped investigators identify Iraqi front companies, which operated abroad to solicit and process alleged bribes from foreign companies and to help facilitate imports for the Iraqi government, including dual-use military goods such as vehicles.
The oil-for-food program, which ran from 1996 to 2003, was created to permit the former Iraqi government to sell limited amounts of oil in exchange for humanitarian goods as an exception to U.N. sanctions imposed after Iraq's 1990 invasion of Kuwait.
One of the documents, known as "the exempt list" and obtained by AP from congressional investigators at the House International Relations Committee chaired by Rep. Henry Hyde, R-Ill., catalogs companies personally approved by Saddam and top lieutenants to circumvent Iraqi regulations to sign deals. The list contains hundreds of names of companies from more than two dozen countries.
No French, Chinese or American companies are on the list, but more than 280 Russian and 100 Saudi companies account for well over half of the list. The investigator who provided the document to AP said Congress might not have the full list.
Earlier this month, the top U.S. arms inspector, Charles Duelfer, published a report that listed foreign companies and individuals who had received vouchers for oil contracts under the U.N. program from the former Iraqi government. The report said Saddam himself approved companies.
Allegations of kickbacks
Duelfer's report alleged that Saddam's government had used the oil vouchers to both solicit kickbacks and to reward countries and individuals willing to cooperate with Iraq's political goals. Companies and individuals from Russia, France and China dominated the list.
Saddam was able to "subvert" the $60 billion U.N. oil-for-food program to generate an estimated $1.7 billion in revenue outside U.N. control from 1997-2003, the Duelfer report said. In addition to oil-for-food schemes, Iraq brought in over $8 billion in illicit oil deals with Jordan, Syria, Turkey and Egypt through smuggling or illegal pumping through pipelines during the full period that sanctions were in place, the report added.
But the new lists obtained by AP of both companies favored and spurned by the Iraqi government are a more overt illustration of Saddam's manipulation of the program.
One investigator described the exempt list as the equivalent of the list in Duelfer's report of oil voucher recipients, but in this case for goods imported under the U.N. program.
"Until now, it had been thought that only vouchers for oil were handed out, but due to disclosures by Iraqi officials from the Ministry of Trade, we now understand that the practice was spread even further," said the investigator, who spoke on condition of anonymity.
Companies on Saddam's special lists got vouchers giving them priority for deals in humanitarian goods under oil-for-food, or to act as middlemen for companies providing goods.
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