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Despite the damning headline, the following from the Times of London[1] offers little that's new and little of substance*. And one might add: oil-for-food would be a rare multi-billion dollar international project, indeed, if it were totally corruption-free. The timing of this story -- which credits Western diplomatic sources -- is interesting, coming on the heels of State Department leaks to the Washington Post (last week's story on 'breaking through the shell' of the Security Council deadlock) and the New York Times (Russia's reported offer to trade its Iraq support for U.S. silence on Chechnya). There appears to be a concerted effort to stampede the P5 into accepting continuation of sanctions. By way of financial context, I've also attached an AFP report[2] which details the OFF money trail. Regards, Drew Hamre Golden Valley, MN USA ---[1] <*Note: Following is the web version of this story in its entirety. If the print version was more substantive, could someone please post?> http://www.sunday-times.co.uk/news/pages/tim/99/11/22/timfgnmid01002.html?19 96766 November 22 1999 MIDDLE EAST West finds evidence of Iraqi fraud IRAQ'S President Saddam Hussein is believed to be skimming off hundreds of thousands of pounds a day from the United Nations "oil-for-food" scheme and using the cash to cement his grip on power (James Bone and Michael Theodoulou write). The alleged fraud has been reported by Western envoys and oil experts. "We have some intelligence on some of it - that there is a lot of it going on," a senior Western diplomat said. The US has gone so far as to block UN approval of a number of contracts to sell humanitarian goods to Iraq. "We have trouble with some companies paying percentages to government officials in Iraq," Peter Burleigh, Deputy US Ambassador to the UN, said. "We go back to those countries in which these companies function and tell them what our problem is." With the price of oil rising rapidly, the five permanent members of the Security Council are now discussing an entirely new oversight system. ---[2] http://asia.dailynews.yahoo.com/headlines/world/afp/article.html?s=asia/head lines/991118/world/afp/UN_worried_about_unspent_Iraqi_oil_revenues_in_one_Fr ench_bank.html Thursday, November 18 8:43 AM SGT UN worried about unspent Iraqi oil revenues in one French bank UNITED NATIONS, Nov 17 (AFP) - The United Nations expressed concern on Wednesday that five billion dollars in unspent revenue from Iraq's UN-controlled oil sales had accumulated in one French bank, BNP-Paribas. "The over-concentration of funds at BNP-Paribas poses a serious investment risk," under secretary general for management Joseph Connor said in a letter to the UN Security Council's sanctions committee on Iraq. "For operational as well as credit reasons, this is an unacceptable exposure," he added. The letter was addressed to Dutch ambassador Peter van Walsum, who heads the sanctions committee. A member of the Security Council made it available to AFP. The Council imposed comprehensive sanctions on Iraq on August 6, 1990, four days after it invaded Kuwait. Since December 1996 it has allowed Iraq to sell limited amounts of oil to pay for imports of badly needed food and medicine. None of the revenue from the oil sales is allowed to pass through Iraqi government hands. Instead, it is paid into an escrow account at BNP-Paribas, which is paid a fee for operating the account. About two-thirds of the revenue may be spent on humanitarian imports approved by the sanctions committee. Thirty percent goes to a compensation fund for Kuwaiti victims of the 1990-91 Gulf war and the remainder covers the cost of administering the oil-for-food programme and the arms inspection team (UNSCOM), which left Iraq in December. In his letter, Connor wrote that "as of November 11, 1999, the balance in the United Nations Iraq account at BNP-Paribas passed the five billion dollar level." The director of the oil-for-food programme, Benon Sevan, told the Security Council on Wednesday that a total 1.042 billion dollars of import contracts had been placed on hold by the sanctions committee. Diplomats said part of the other four billion dollars was money that had not yet been transferred to the compensation fund or for imports that had been approved but not delivered. The rest, they said, was money that Iraq had not yet applied to spend. Diplomats said that the interest would go back into the escrow account, not to BNP-Paribas. So far, 188 million dollars interest has accrued since the start of the oil-for-food programme in December 1996, they said. Connor recalled that the auditors had previously recommended "diversification of the investment portfolio." Diplomats said that UN Secretary General Kofi Annan had suggested "at least twice" to the Iraqi government that some of the oil revenues might be channeled through Swedish or Dutch banks, but did not identify the banks. The UN secretary general and the Iraqi government originally agreed to have BNP-Paribas hold the escrow account. -- ------------------------------------------------------------------------- This is a discussion list run by the Campaign Against Sanctions on Iraq. To be removed/added, email soc-casi-discuss-request@lists.cam.ac.uk, NOT the whole list. Please do not send emails with attached files to the list *** Archived at http://linux.clare.cam.ac.uk/~saw27/casi/discuss.html ***