Oil-for-Food Programme

TheOil-for-Food Programme(OIP) was established by theUnited Nationsin 1995 (underUN Security CouncilResolution 986)to allowIraqto selloilon 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 PresidentBill Clinton'sadministrationin 1995,as a response to arguments that ordinary Iraqi citizens were inordinately affected by the internationaleconomic sanctionsaimed at thedemilitarisationofSaddam Hussein's Iraq, imposed in the wake of the firstGulf War. The sanctions were discontinued on 21 November 2003 after theU.S. invasion of Iraq, and the humanitarian functions turned over to theCoalition Provisional Authority.
The programme wasde factoterminated in 2003 andde jureterminated in 2010. Although the sanctions were effective, there were revelations of widespread corruption in the programme and abuse of its funds.
The Oil-for-Food Programme was instituted to relieve the extended suffering of civilians as the result of the United Nations' imposition ofcomprehensive sanctions on Iraqfollowing Iraq's invasion ofKuwaitin August 1990.Security Council Resolution 706of 15 August 1991 was introduced to allow the sale of Iraqi oil in exchange for food.
Security Council Resolution 712of 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 amemorandum 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 anescrowsystem. Oil exported from Iraq was paid for by the recipient into an escrow account possessed until 2001 byBNP Paribasbank, rather than to the Iraqi government. The money was then apportioned to pay forwar reparationstoKuwait, 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 notembargoedunder the economic sanctions.  Certain items, such as raw foodstuffs, were expedited for immediate shipment, but requests for most items, including simple things such aspencilsandfolic acid, 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.
Over US$53 billion worth ofIraqioil was sold on the world market. About US$46 billion of this was intended to provide for thehumanitarianneeds of the Iraqi people such as food andmedicine, given the context of internationaleconomic sanctions. A considerable portion was spent onGulf Warreparations 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 theweapons inspection programmewas also paid from these funds. Internal audits have not been made public.
Shortly before US-ledCoalition forceslaunched aninvasion of Iraq,UN Secretary-GeneralKofi Annansuspended the programme and evacuated more than 300 workers monitoring the distribution of supplies.
On 28 March 2003, Annan, the United States, and Britain asked theUN Security Councilto 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 1949Fourth Geneva Conventionthese are the responsibilities of the occupying power.
On 22 May 2003,UN Security Council Resolution 1483granted authority to theCoalition Provisional Authorityto use Iraq's oil revenue. The programme's remaining funds, $10 billion, were transferred over a six-month winding-up period to theDevelopment Fund for Iraqunder 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 theCoalition Provisional Authority.
The programme also suffered from widespreadcorruptionand 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 throughBNP Paribas, whose main private share-holder is Iraqi-bornNadhmi Auchi, a man whose estimated worth is about $1 billion according toForbesestimates, the 13th-richest man in Britain according toThe Guardian. Auchi received a 15-month suspended sentence for his involvement in theElf 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 withTotalFinato becomeTotal S.A.in 2003.
According to information fromAqila al-Hashimi, 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 SevanofCyprus, 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 externalaudits. He blamedSecurity Councilrestrictions for making the situation difficult and said that 90 percent 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 thewhistleblower'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-GeneralLouise Frechette, rejected any such investigation, claiming that it would be too expensive to be worthwhile. UN Chef de CabinetIqbal Rizaordered 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 the2003 invasion of Iraq, accusations were made that skimmed profits were being used to buy influence at the UN and withKofi Annanhimself. An investigation cleared Annan of any personal wrongdoing.
According to an interim report released on 3 February 2005 by former Federal Reserve chairmanPaul Volcker's commission (seeInvestigationsbelow), 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.
One of the earliest allegations of wrongdoing in the programme surfaced on 25 January 2004, whenal 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, theIraq National Oil Company, which had close links to theIraqi Oil Ministry.
Named in the list of beneficiaries wereGeorge Galloway, then a BritishMember of Parliament(MP), and his charity, theMariam Appeal; former FrenchInterior MinisterCharles Pasqua;Shaker al-Kaffaji, an Iraqi-American businessman; Indian Foreign MinisterNatwar Singh, and Bheem Singh. Many prominent Russian firms and individuals were also included on theal Madalist. Even theRussian Orthodox Churchwas supposedly involved in illegal oil trading.The former assistant to theVatican secretary of state, ReverendJean-Marie Benjamin, is said to have received the rights to sell 4.5 million barrels (720,000 m). George Galloway subsequently won twolibelactions against theChristian Science MonitorandDaily Telegraph, which had reported the allegations.
The president ofOilexcoLtd, Arthur Millholland, whose name also appeared on theal Madalist, denied wrongdoing but confirmed that illegal surcharges were being paid to the Iraqi government by contractors.Few denythat in Iraq, like in many third-world countries, bribes andkickbackswere regularly paid to the leadership in order to get contracts; however, theal Madalist does not discuss bribes paid to Iraq – it discusses bribes paid to individuals to support Iraq.
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 $/m) 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 ofBenon Sevan, 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 m) of oil, worth some $3.5 million in profit. Sevan denied the charges.
The sole bank handling funds transfers for the Oil-for-Food Programme was the New York branch of the Banque Nationale de Paris-Paribas, orBNP Paribas. This French bank was the sole bank administering the $64 billion UN programme. An investigation by theUS House Committee on International Relationsfound 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.
TheIraq Survey Group, which was tasked with finding evidence ofweapons of mass destructionin 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 gethard currencythat 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 includedExxonMobil,ChevronTexaco Corp.and theEl Paso Corp.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 organisationTransparency International(TI) lodged a complaint with the GermanFederal Ministry for Economic Affairs and Energy(BMWi) against 57 German companies for allegedly paying $11.9m in kickbacks in the United Nations' Oil for Food Programme in Iraq.
The US-funded satellite networkAl Hurrabroadcast a story on 6 January 2005 detailing allegations that Saddam's regime had bribed news reporters with oil coupons. Reporters named includeAhmed MansourofAl JazeeraandHamida Na'na[fr], 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 saidto have received a gold coupon.
In October 2007,the SEC brought a case againstIngersoll-Randalleging kickbacks by three different subsidiaries to Iraqi Government officials. Ingersoll-Rand's German subsidiaryABG, subsidiary I-R Italiana and the Irish subsidiaryThermo Kingpaid "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 theSecurities Exchange Act of 1934, 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 theForeign Corrupt Practices Act, and to pay a $2,500,000 fine pursuant to a deferred prosecution agreement with the U.S. Department of Justice, Fraud Section.
TheIraqi Kurdscomplained 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 predominantlyKurdish regions. The allegations include claims that theCairooffice of the UN'sWorld Health Organization, run by an individualalleged to have received oil sales contracts, managed to stall the building of a new general hospital for the Kurdish city ofSulaymaniya, even though the funds for the project had been available since 1998.
On 14 June 2005, two 1998 memos surfaced that appeared to linkKofi Annanto 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 quietlobbying" 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.
According to high-ranking RussianSVRdefectorSergei 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.The biggest part of vouchers (to buy 1,366 billion barrels (2.172×10m) of oil) went to forty-six individuals or organizations in Russia, including theRussian Orthodox Church.They pocketed $476 million.Among Russians who received the money wereAlexander VoloshinandVladimir Zhirinovsky. Sergei Isakov, a friend of Voloshin, carried "bags with money" from Moscow to Baghdad taking the "earned" money as kickbacks to Saddam.
Fox Newsbroke the story thatAlexander 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 withAl Qaeda." Nasreddin was removed from these lists in 2007 after he demonstrated that he had severed all business ties withYoussef Nada, who co-founded theAl Taqwa Bankwith 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 theMujahedin-e-Khalq.
A report by UN investigatorPaul Volckerreleased in October 2005 found that theAustralian Wheat Board, laterAWB 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 AustralianDepartment of Foreign Affairs and Trade. The Australian Government commissioned judgeTerence Coleto further investigate whether Australian companies had indeed paid kickbacks to the Saddam regime. TheCole Inquirycommenced in December 2005.
TheCole Inquiryhas received testimony from senior Australian Government officials, including Prime MinisterJohn Howard, Deputy Prime MinisterMark Vaile, Foreign MinisterAlexander Downerand various officials from the Department of Foreign Affairs and Trade. During the course of the inquiry numerous AWB officials have resigned, including managing directorAndrew Lindberg.In 2009, the Australian Federal Police ended the investigation related to the scandal.
After the2003 invasion of Iraqand subsequentCoalitionvictory over theIraqi Army, the USGovernment Accountability Office(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. AU.S. Department of Defensestudy, 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:
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, with support fromKofi Annan, 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 inThe Wall Street Journal,investigative journalistClaudia Rosettof theFoundation for the Defence of Democraciesand theHudson Institutediscovered 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 fromDenis HallidayandBenon Sevan,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 bySabah Yassen, the former Iraqi ambassador to Jordan, to pay the families ofPalestinian suicide bombersbetween $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.
After initial opposition to an investigation, UN Secretary-GeneralKofi Annanstated 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:
On 22 April 2004, theUnited Nations Security Councilpassed a unanimous resolution endorsing the Volcker inquiry intocorruptionin the United Nations Oil-for-Food Programme for Iraq, calling upon all 191 member states to cooperate.
The definitivereport 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".Benon Sevanwas briefed in December 2002 on the findings of the audit.
The audit is available here.Its summary states:
After reading the leaked audit, congressmanHenry Hydewrote 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."
In a 219-page initial report, the Volcker Commission documented how OIF chairmanBenon Sevanused 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 7.3 million barrels (1,160,000 m) 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 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 paidKojo Annan, Kofi Annan's son, consulting fees until November 2003. Volcker said that future reports would deal with questions regarding Kojo Annan.
International accounting firmKPMGhad been selected by the Iraqi Governing Council to investigate theal Mada claims, along withFreshfields Bruckhaus Deringer. It was due to release its findings to theIraqi Governing Councilin 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 ofAhmed Chalabi, accusing it of undermining the main probe established byPaul Bremer. That probe had been run by the head of Iraq's independent Board of Supreme Audit, Ehsan Karim, with assistance fromErnst & Young. 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.
The French criminal justice system is investigating the alleged involvement of two former officials from theFrench 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 byinvestigating magistratePhilippe 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 ofLionel Jospin).
Some other people, includingBernard Guillet, an aide to French senatorCharles Pasqua, are also under formal investigation. Guillet and Pasqua deny any wrongdoing.
US SenatorNorm Colemancalled forKofi Annanto resign over the scandal and helda number of hearingson the matter. The most spectacular of these hearings occurred after the subcommittee released a report that accused (then) BritishMember of Parliament(MP)George Galloway, Russian politicianVladimir Zhirinovsky, and former French Interior MinisterCharles Pasquaof receiving oil allocations from Iraq in return for being political allies ofSaddam Hussein's regime. Galloway, in an unusual appearance of a British MP before a US Senate subcommittee, responded angrily to the allegations against him in aconfrontational public hearingwhich 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 Hogealleged 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 SenatorCarl Levin(D-Michigan) is quoted in an interview for theNew York Timesas 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 [and that] we were fully aware of the bypass and looked the other way."
On 6 January 2006,South KoreanbusinessmanTongsun Parkwas arrested by the FBI inHoustonafter 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 theFederal Bureau of Investigation's New York Field Office, on 16 January 2007,Benon Sevanwas indicted by prosecutors from the Southern District of New York for taking about $160,000 in bribes.Michael J. Garcia, theU.S. Attorney for the Southern District of New York, issued a warrant throughInterpolfor 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.
On 1 April 2010,Daimler AGpleaded guiltyto bribery charges brought by theU.S. Department of Justiceand theU.S. Securities and Exchange Commissionand 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 ofMercedes-Benzvehicles was accused of violating the terms of the United Nations' Oil for Food Program with Iraq by includingkickbacks10 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 formerauditorat then DaimlerChrysler Corp, filed awhistle-blowercomplaint after he was fired for raising questions aboutbank accountscontrolled by Mercedes-Benz units in South America.Bazzetta alleged that he learned in a July 2001 corporate auditexecutive committeemeeting inStuttgartthatbusiness units"continued to maintain secret bank accounts tobribeforeigngovernment officials", 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 [Daimler AG and its subsidiaries] saw foreign bribery as a way of doing business", saidMythili Raman, 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, 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."
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