Senior UN officials stole from oil-for-food program: report
AFP
20 April 2004

WASHINGTON, April 20 (AFP) - At least three senior UN officials may have looted millions of dollars from the aid program that oversaw Saddam Hussein's oil sales in Iraq, ABC news reported Tuesday, citing US and European intelligence sources.
Documents from Saddam's oil ministry linked the program's director, Benon Sevan, to a payoff scheme that allowed some 270 foreign officials to deal in Iraqi oil at dramatically reduced prices, ABC news said.

A letter to former Iraqi oil minister Amer Mohammed Rasheed -- which UN officials have not yet seen -- said that Sevan indicated which company should handle his own oil deal valued at up to 3.5 million dollars.

"It's almost like having coupons of bonds or shares. You can sell those coupons to other people who are normal oil traders," said Claude Hankes-Drielsma, a British adviser to the Iraq Governing Council.

Sevan has denied the accusations, which came a day before the UN Security Council is set to give its backing for an investigation into alleged fraud and corruption in the program led by former US Federal Reserve chairman Paul Volcker.

Sevan has been on vacation in Australia since the scandal broke.

"Tomorrow we will officially announce the independent inquiry into the oil-for-food program. An important aspect of the panel's work is to thoroughly investigate allegations against any UN officials," UN spokesman Stephane Dujarric said in response to the ABC report.

UN officials said they did not know the identities of the other two officials mentioned in the report. They were not named by ABC.

The United Nations has been struggling to contain a mounting scandal over the now defunct oil-for-food program, which comes at a sensitive time as the world body prepares to take on a central role in Iraq's political future.

What started out in 1996 as a humanitarian effort to help ease the effects of international sanctions on ordinary Iraqis evolved into a complex bureaucracy that oversaw 100 billion dollars in trade contracts.

Saddam's regime was put under sanctions after invading Kuwait in 1990, and the program allowed Baghdad to sell oil to buy food and other essential humanitarian supplies.

But by the time oil-for-food was closed last year after Saddam's ouster, an alleged system of kickbacks, fraud and inflated cost figures had developed that critics say allowed officials and friends of the regime to profit. US officials told ABC the lost money could amount to five billion dollars.

In January, Iraq's Al-Mada newspaper published a list of hundreds of individuals alleged to have been involved, including Sevan. The allegations have since intensified under the probing of western journalists.

The list included the names of more than 270 people, political organizations and religious figures from more than 40 countries -- including Britain, Canada, France, Russia, the United States and several Arab countries -- whom it said received free crude oil.