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Major companies identified in the oil-for-food probe

An independent inquiry on Thursday linked prominent industrial and oil corporations to the UN oil-for-food scandal, citing evidence of alleged illegal surcharges and kickbacks paid to Iraq.

Major firms in Europe and North America such as Siemens, Texaco, Volvo Group and BNP Paribas are among those named in the report that backs up its findings with copies of signed letters, bank transactions and interviews.

The international inquiry committee, led by former US central bank chief Paul Volcker, spent 18 months examining what went wrong with the UN oil-for-food program that ran from 1996 to 2003.

Amid fears ordinary Iraqis were suffering under international sanctions, the UN Security Council set up the program to allow Baghdad to export limited amounts of its oil to purchase food and medicine under UN supervision.

The inquiry committee, however, found that former Iraqi president Saddam Hussein's regime manipulated the program to extract US$1.8 billion in surcharges and bribes while an inept UN headquarters failed to exert administrative control.

According to the 500-page report, 139 companies paid illegal oil surcharges to Baghdad and 2,253 firms gave Saddam's regime kickbacks on its humanitarian-related goods shipped to Iraq.

While the report raised some serious questions about the practices of the companies, Volcker stopped short of an explicit condemnation or verdict.

"The identification of a particular company in the report does not necessarily mean that that company as opposed to an agent ... made, authorized or even knew about illicit payments," Volcker told reporters in New York.

In written responses included in the report, the named corporations said they had no idea such kickbacks were paid out and that such transactions were never authorized.

The French bank BNP Paribas, which supervised the escrow account for the program on behalf of the UN, came in for detailed criticism.

BNP faced a clear conflict of interest because it was issuing letters of credit on behalf of private firms purchasing Iraqi oil, the report stated.

"BNP's loyalties were divided" between safeguarding the transparency of the program for the UN and protecting the interests and confidentiality of its clients, it said.

The bank also allegedly failed to intervene or question when obscure companies were depositing and withdrawing vast amounts of money in a flurry of transactions, the report alleged.

BNP has defended its conduct and refuted the allegations.

While US lawmakers have emphasized the role of French and Russian companies in the scandal, US firms and individuals are also named in the report.

In one case, oil giant Texaco wrote to BNP bank requesting that its name be left out of an oil transaction involving an intermediary, the report said.

The inquiry found that US$490,790 in illegal surcharges were allegedly paid to the regime in transactions involving Texaco and a company named Bulf.

US federal prosecutors also have charged Texas oil businessman, Oscar Wyatt, with paying bribes to Saddam's regime.
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