More Oil-Food Deception Detailed

Former Iraqi President Saddam Hussein’s regime reaped more than $21 billion from kickbacks and smuggling before and during the U.N. “oil-for-food” program, twice as much as previous estimates, Senate investigators said Monday.

The revenue, taken in between 1991 and 2003, was obtained by imposing surcharges on oil, taking kickbacks on civilian goods and smuggling oil directly to willing governments, Senate investigators said at a hearing.

“The magnitude of fraud perpetrated by Saddam Hussein in contravention of U.N. sanctions and the oil-for-food program is staggering,” said Sen. Norm Coleman (R-Minn.), chairman of the Senate Permanent Subcommittee on Investigations. “This is like an onion -- we just keep uncovering more layers and more layers.”

The new figures on Iraq’s alleged surcharges, kickbacks and smuggling are based on documents obtained by the subcommittee. The documents illustrate how Iraqi officials and foreign companies and politicians apparently contrived to bring vast illicit gains to Hussein’s government and how he tried to buy support abroad for a move to get the United Nations to lift sanctions, officials said.

The new Senate figure is about double the amount estimated by the U.S. Government Accountability Office, which had pegged the gains at $10.1 billion.

The oil-for-food program began in December 1996 to alleviate the impact of U.N. sanctions, imposed after Iraq invaded Kuwait in 1990, on the Iraqi people. The Security Council allowed Iraq to sell oil and buy food, medicine and other goods and let Baghdad draw up its own contracts.

This left room for abuse in the $64-billion program, administered by the United Nations and monitored by a Security Council panel, including the United States, investigators say.

Oil smuggling netted Hussein’s regime about $9.7 billion, with other funds flowing from switching substandard goods for top-grade ones, as well as exploiting food and medicine shipments to Kurds in Iraq’s north.

Coleman said the investigation was just beginning and criticized the United Nations for not providing documents.