Former Iraqi president Saddam Hussein diverted money from the UN oil-for-food program to pay millions of dollars to families of Palestinian suicide bombers who carried out attacks on Israel, say congressional investigators who uncovered evidence of the money trail.
Hussein tapped secret bank accounts in Jordan -- where he collected bribes from foreign companies and individuals doing illicit business under the humanitarian program -- to reward the families up to US$25,000 each, investigators told reporters.
Documents prepared for a hearing yesterday by the House International Relations Committee outline the new findings about how Saddam funneled money to the Palestinian families.
Investigators examining the oil-for-food program felt it was "important for us to determine whether the profits from his corruption were put toward terrorist purposes," committee chairman Henry Hyde, an Illinois Republican, said of Saddam's well-known financial support of suicide bombers.
Yesterday's hearing, however, was to focus on a French bank that handled most of the money for the program. An audit by a US regulatory agency of a small sample of transactions out of the $60 billion (euro46.26 billion) U.N. escrow account managed by BNP-Paribas has raised serious questions concerning the bank's compliance with US money laundering laws, the investigators said.
"There are indications that the bank may have been noncompliant in administering the oil-for-food program," Hyde said in his statement to AP. "If, true these possible banking lapses may have facilitated Saddam Hussein's manipulation and corruption of the program."
While acknowledging that US regulators have raised routine issues with BNP on compliance with banking laws, a lawyer for BNP said Hyde's statement was unfair to the bank.
"No departure from any standard caused or contributed in any way to the abuse at the oil-for-food program," the bank's lead council Robert S. Bennett said. "There are simply no connections."
The humanitarian program that let Iraq trade oil for goods was set up in 1996 to help Iraqis get food, medicine and other items that had been scarce under strict UN economic sanctions imposed after the Gulf War. But investigators say Saddam made more than US$21.3 billion in illegal revenue under the program as well as by evading the sanctions for more than a decade.
Iraq had thousands of secret bank accounts throughout the world, including over 1,500 in Jordan. Money from kickbacks on oil-for-food deals, illegal oil payments from the Jordanian government and other illicit funds were paid into accounts held by a Jordanian branch of the Iraqi government owned Rafidain Bank, investigators said.