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U.N. oil-for-food probe hindered by ghost firms
Investigators find web of companies with hidden owners that exported Iraqi oil.
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Associated Press
December 26, 2004
GENEVA – The United Nations probe into oil-for-food corruption is being seriously hampered by a web of ghost firms set up around the world to cover the tracks of bribes to Saddam Hussein as he cheated the $60 billion program, a top investigator said.
Some front companies in this global oil trading center and elsewhere that dealt with Hussein have been liquidated or have hidden ownership, complicating the search for evidence of financial improprieties, said Swiss criminal lawyer Mark Pieth. He’s one of three commission members leading the probe headed by former U.S. Federal Reserve Chairman Paul Volcker.
Major oil trading companies and individuals – from American businessmen to French, Chinese and Russian politicians – are suspected of benefiting from Iraqi oil contracts that involved kickbacks, according to the independent panel’s initial findings.
Those who profited might have been able to hide by making transactions through ghost firms that exist mostly on paper, Pieth said.
Despite the thin trail, Pieth said he was confident investigators would ultimately trace the funds to those who might have made illicit profits – or allowed Hussein and his regime to profit illegally – during the program, which existed from 1996 until 2003.
“It is a problem. . . . But on the other hand, we also have means of finding the beneficial owners,” Pieth said. “There is usually a file, if the banks have done their job.”
Pieth said national authorities and banks in Switzerland and other nations where front companies handled oil-for-food deals should have their own records of who was behind the firms.
“Switzerland and Liechtenstein have promised to help,” Pieth said of the two countries where about 25 firms got oil under the program, according to an AP examination of records.
According to a list Volcker released of 248 companies that exported Iraqi oil under the program, firms based in Switzerland took more than those from any other country except France and Russia. Liechtenstein – which has 33,000 inhabitants – came in eighth on the list.
Volcker has said that being on the list doesn’t necessarily imply guilt in paying kickbacks.
Switzerland and Liechtenstein are among countries whose lax regulations and traditions of discretion in business and banking make them attractive for trading companies.
Front companies registered in other tax havens – such as Cyprus, Jordan and Panama – also figure in the oil-for-food probe.
The program, which was begun in 1996 and ended last year after Hussein was ousted, allowed Iraq to trade $60 billion worth of oil for food, medicine and other necessities that became scarce under U.N. economic sanctions imposed after the Gulf War.
Congressional investigators said in November that they had uncovered evidence Iraq raised more than $21.3 billion in illegal revenue by subverting U.N. sanctions and the oil-for-food program.
indystar.com/articles/0/204872-3390-010.html
Investigators find web of companies with hidden owners that exported Iraqi oil.
http://www.indystar.com/images/clear.gif
http://www.indystar.com/images/clear.gif
Associated Press
December 26, 2004
GENEVA – The United Nations probe into oil-for-food corruption is being seriously hampered by a web of ghost firms set up around the world to cover the tracks of bribes to Saddam Hussein as he cheated the $60 billion program, a top investigator said.
Some front companies in this global oil trading center and elsewhere that dealt with Hussein have been liquidated or have hidden ownership, complicating the search for evidence of financial improprieties, said Swiss criminal lawyer Mark Pieth. He’s one of three commission members leading the probe headed by former U.S. Federal Reserve Chairman Paul Volcker.
Major oil trading companies and individuals – from American businessmen to French, Chinese and Russian politicians – are suspected of benefiting from Iraqi oil contracts that involved kickbacks, according to the independent panel’s initial findings.
Those who profited might have been able to hide by making transactions through ghost firms that exist mostly on paper, Pieth said.
Despite the thin trail, Pieth said he was confident investigators would ultimately trace the funds to those who might have made illicit profits – or allowed Hussein and his regime to profit illegally – during the program, which existed from 1996 until 2003.
“It is a problem. . . . But on the other hand, we also have means of finding the beneficial owners,” Pieth said. “There is usually a file, if the banks have done their job.”
Pieth said national authorities and banks in Switzerland and other nations where front companies handled oil-for-food deals should have their own records of who was behind the firms.
“Switzerland and Liechtenstein have promised to help,” Pieth said of the two countries where about 25 firms got oil under the program, according to an AP examination of records.
According to a list Volcker released of 248 companies that exported Iraqi oil under the program, firms based in Switzerland took more than those from any other country except France and Russia. Liechtenstein – which has 33,000 inhabitants – came in eighth on the list.
Volcker has said that being on the list doesn’t necessarily imply guilt in paying kickbacks.
Switzerland and Liechtenstein are among countries whose lax regulations and traditions of discretion in business and banking make them attractive for trading companies.
Front companies registered in other tax havens – such as Cyprus, Jordan and Panama – also figure in the oil-for-food probe.
The program, which was begun in 1996 and ended last year after Hussein was ousted, allowed Iraq to trade $60 billion worth of oil for food, medicine and other necessities that became scarce under U.N. economic sanctions imposed after the Gulf War.
Congressional investigators said in November that they had uncovered evidence Iraq raised more than $21.3 billion in illegal revenue by subverting U.N. sanctions and the oil-for-food program.
indystar.com/articles/0/204872-3390-010.html
