Foes of Iraq Sanctions Got Oil

Three U.S. citizens, all of whom campaigned against Iraq sanctions, were among those who received special grants from a scandal-ridden oil program overseen by Saddam Hussein, according to congressional officials and a CIA report released this week.

Five U.S. corporations were also among the beneficiaries of the so-called oil vouchers Hussein gave to top political figures and key firms in a bid to win diplomatic or military favors, sources said. They included major companies such as ChevronTexaco and Exxon Mobil, as well as smaller ones such as Houston-based Bayoil USA.

Oscar Wyatt, a Texas oil baron who received more money than any other individual, announced in March 1997 that he would retire and begin lobbying in Washington to lift sanctions against Iraq and Libya. In addition to personal vouchers he received between 1999 and 2003, his company was awarded oil vouchers in 1996 and 1997 to pump 11.8 million barrels of oil, according to Iraqi documents contained in the CIA report.

Wyatt did not respond to a request for comment.

A massive report released to the public this week by Charles A. Duelfer, who headed the CIA effort to document Hussein’s purported weapons of mass destruction, did not include names. A version containing the names was given to some congressional representatives Thursday.

It remains unclear whether any of the named companies’ transactions were illegal because all of them had been cleared to purchase oil from Iraq in the early days of the United Nations’ “oil-for-food” program, which began in 1996.

But an individual’s award of an oil grant appears to have violated U.N. sanctions, because petroleum in the program was supposed to be sold to corporate end users, analysts said.

House investigators said they planned to look into whether any of the individuals or firms were given the oil contracts in exchange for carrying out propaganda or other activities for Hussein.

The program, under which Hussein sold oil in return for food and humanitarian supplies, is the subject of nine investigations, including one by federal prosecutors in New York who have sent subpoenas to several U.S. oil companies seeking information on their participation.

Analysts say the oil-for-food program was poorly monitored and riddled with opportunity for corruption.

The CIA report says Hussein used oil vouchers to pay bribes to top political officials throughout the world, including in France, Russia and at the U.N.

Typically, he would personally approve the issuance of the vouchers, which provided the holder the right to buy a certain amount of oil at a discount, the report says. If issued to an individual, the vouchers could be sold to a middleman who would then purchase the oil. The money was supposed to end up in a U.N.-monitored bank account, though kickbacks and surcharges were common, according to the report.

The report contains documents from Iraq’s state oil company that indicate a greater level of involvement by U.S. individuals than previously known. An Iraqi newspaper article in January named at least two of them.

In 2000, Shakir al Khafaji, a Detroit businessman, provided $400,000 to fund the production of a documentary by former weapons inspector Scott Ritter that claimed inspections had succeeded in removing Iraq’s weapons of mass destruction.

Khafaji was listed as having been awarded 2 million barrels of oil, for a profit of $931,000 in 2001, according to Duelfer’s report and congressional investigators. Khafaji was awarded three more vouchers for a total of 5 million barrels between 2001 and 2003, but he never collected on them, the records show.

Khafaji did not return calls, though in the past he has said he did not support Hussein.

Samir Vincent, who headed a Virginia-based firm called Phoenix International, was also on the list, according to investigators. In 1999 and 2000, Vincent helped organize a tour through the U.S. in which Iraqi religious leaders met with U.S. religious leaders and political figures including former President Carter.

Vincent told a Catholic magazine in 2000 that one of the Iraqi religious leaders told the Rev. Billy Graham, “Help our people by using your influence on the decision-makers in your country to see clearly what they have done to Iraq, their malicious actions.”

Phoenix was awarded 1.5 million barrels of oil in 1999 and 2000 that netted Vincent $1 million, the CIA report says. Vincent and Phoenix received vouchers for 7.9 million barrels for a profit of $3.6 million between 1997 and 2001, the Duelfer report shows.

Vincent was also given four vouchers for 4 million barrels between 2000 and 2003 that he did not use.

Vincent could not be reached for comment.

Wyatt has had a long relationship with Hussein, dating to before the 1991 Persian Gulf War when his company, Coastal Corp., was a major buyer of Iraqi oil. He won fame in 1991 by taking his company’s plane to Iraq to pick up American citizens being held hostage during the run-up to the war.

Wyatt received six personal vouchers between 1999 and 2003 for 29.7 million barrels of oil that netted him $12.6 million, according to the records in Duelfer’s report. Coastal was given vouchers for 42 million barrels for a profit of $10.1 million between 1996 and 2000, the report says.

Bob Baer, a former CIA officer, said Hussein’s regime dealt with Wyatt because it believed he could open a back channel to the Clinton White House.

“The Iraqis were coming to me and saying this guy was coming to Baghdad and saying he could speak for Clinton,” Baer recalled. “The Iraqis were saying, ‘Saddam has cut a deal with the Clinton administration and this guy was the channel to the White House.’ Of course he wasn’t.

“Personally, I don’t think Saddam believed it. But he wanted people to believe he was doing back channel deals.”

Oil giants ChevronTexaco and Exxon Mobil or their predecessor companies were also listed in the Iraqi documents in Duelfer’s reports, congressional investigators said.

Chevron and Texaco, then separate firms, were listed as having purchased 11.3 million barrels of oil for a profit of $2 million between 1996 and 1998. Mobil, which later merged with Exxon, bought 9.2 million barrels for a profit of $1.7 million, the records show.

Both companies said Friday that any oil pumped from Iraq was done in accordance with U.S. and U.N. regulations.

The fifth company on the list was Bayoil, run by David Chalmers. He was a former business associate of Wyatt, according to Platts, an industry trade publication.

Bayoil bought 5.7 million barrels that netted $1 million under the voucher program, according to the Duelfer report and congressional investigators.

Chalmers, who did not receive vouchers personally, did not return phone calls.