Beyond the billions in graft, smuggling, and lavish
living for Saddam Hussein that were the hallmarks of the United Nations Oil-for-Food
program in Iraq.....
It's time to talk about Oil -
for - Terror.
Especially with the U.N.'s own investigation into Oil-for-Food now taking shape, and more
congressional hearings in the works, it is high time to focus on the likelihood that
Saddam may have fiddled Oil-for-Food contracts not only to pad his own pockets, buy pals,
and acquire clandestine arms — but also to fund terrorist groups, quite possibly
including al Qaeda.
There are at least two links documented already. Both involve oil buyers picked by Saddam
and approved by the U.N. One was a firm with close ties to a Liechtenstein trust that has
since been designated by the U.N. itself as "belonging to or affiliated with Al
Qaeda." The other was a Swiss-registered subsidiary of a Saudi oil firm that had
close dealings with the Taliban during Osama bin Laden's 1990's heyday in Afghanistan.
These cases were reported in a carefully researched story published last June by Marc
Perelman of the New York-based Forward, relying not only on interviews, but on
corporate-registry documents and U.S. and U.N. terror-watch lists. It was an important
dispatch but sank quickly from sight. At that stage, the U.N. was still busy praising its
own $100-billion-plus Oil-for-Food program, even while trying quietly to strip out the
huge graft overlay from the remaining $10 billion or so in contracts suddenly slated for
handover to the U.S.-led Coalition Provisional Authority (CPA). That was shortly before
the records kept in Baghdad by Saddam began surfacing in such damning profusion that
Secretary-General Kofi Annan was finally forced last month to stop stonewalling and agree
to an independent investigation — though just how independent remains to be seen.
As it now appears, Oil-for-Food pretty much evolved into a BCCI with a U.N. label. The
stated aim of the program, which ran from 1996-2003, was to reduce the squeeze of
sanctions on ordinary Iraqis by allowing Saddam to sell oil strictly to buy food and other
relief supplies. As Oil-for-Food worked in practice, however, the program gave Saddam rich
opportunity not only to pad his own pockets, but to fund almost anything and anyone else
he chose, while the U.N. assured the world that all was well. (For the full saga, see my
article in the May issue of Commentary, "The Oil-for-Food Scam: What Did Kofi Annan
Know and When Did He Know It?").
For a sample of the latitude enjoyed by Saddam, there's Treasury's announcement last week
that the U.S., in its latest round of efforts to recover Saddam's loot, is asking U.N.
member states to freeze the assets of a worldwide group of eight front companies and five
individuals that were "procuring weapons, skimming funds, operating for the Iraqi
Intelligence Service, and doing business in support of the fallen Saddam Hussein
regime." The list includes a Dubai-based firm, Al Wasel & Babel General Trading,
a major contractor under the Oil-for-Food program that turned out to be a front company
set up by Saddam's regime specifically to sell goods (and procure arms) via the program
— right under the U.N.'s approving eye. Indeed, Al Wasel & Babel's website boasts
that the company was set up in 1999 especially to "cater to the needs of Iraq
Government under 'Oil for Food Program.' "
HOW SADDAM GOT HIS WAY
In this context, which suggests just how easily money might also have been passed right
along to terrorists, Perelman's tale of terrorist links deserves a reprise. We will get to
that below. The details are complex, which in matters of terrorist financing tends to be
part of the point. Complications provide cover. So before we dive into a welter of names
and links, let's take a look at how Oil-for-Food was configured and run by the U.N. in
ways that left the program wide open not only to the abuses and debaucheries by now well
publicized, but also to the funneling of money to terrorists — if Saddam so chose.
And though this avenue remains to be explored, it is at least worth noting that the
explosive growth of Oil-for-Food — from a limited program for Iraqi relief introduced
in 1996 to a kickback-wracked fiesta of fraud and money-laundering by the late 1990s and
beyond — coincided neatly with the period in which al Qaeda really took off. It was
in 1998 that Oil-for-Food began to expand and more fully accommodate Saddam's scams. If
allegations detailed in a Wall Street Journal story on March 11 prove correct, 1998 was
also the year that Saddam may have begun sending oil to a Panamanian front company linked
to the head of the program, Benon Sevan. And it was in 1998 that Osama bin Laden issued
his fatwa, specifically denouncing U.S. intervention in Iraq and urging Muslims to
"Kill the Americans and plunder their money wherever and whenever they can find
it."
To be sure, there is no evidence of a causal connection. But there is certainly room to
wonder whether Saddam, a master of manipulation, on record as sharing bin Laden's
sentiments at least in regard to U.S. involvement in Iraq, would not have been tempted to
involve himself in the terrorist boom of the next few years. In principle he was still
under sanctions, but Oil-for-Food gave him loopholes through which billions of dollars
could pass.
As Oil-for-Food worked in practice, there were two glaring flaws that lent themselves to
manipulation by Saddam. One was the U.N. decision to allow Saddam to choose his own buyers
of oil and suppliers of goods — an arrangement that Annan himself helped set up
during negotiations in Baghdad in the mid-1990s, shortly before he was promoted to
Secretary-General. The other problem was the U.N.'s policy of treating Saddam's deals as
highly confidential, putting deference to Saddam's privacy above the public's right to
know. Even the Iraqi people were denied access to the most basic information about the
deals that were in theory being done in their name. The identities of the contractors, the
amounts paid, the quantity and quality of goods, the sums, fees, interest, and precise
transactions involved in the BNP Paribas bank accounts — all were kept confidential
between Saddam and the U.N.
With Saddam allowed to assemble a secret roster of favorite business partners, the only
hope of preserving any integrity under Oil-for-Food was that the U.N. would ferociously
monitor every deal, and veto anything remotely suspect. Instead, the Security Council
looked for weapons-related goods; the Secretariat looked for ways to expand the program
(while collecting its three-percent commission on Saddam's oil sales); and Saddam looked
for — and found — ways to pervert the program.
To grasp just how easily the U.N. let Saddam turn Oil-for-Food to his own ends, it helps
to see his lists of contractors, which the U.N. kept confidential. Luckily, some lists
have leaked, and in paging through the wonderland of Saddam's U.N.-approved clientele,
including many hundreds of oil buyers and goods suppliers, what one finds is a vast web of
business partners that — had the U.N. followed any reasonable policy of disclosure
— should have set off major alarms from beginning to end of the program. Why, for
instance, was Saddam allowed to peddle oil (especially under-priced oil — yielding fat profits) to clusters of what were clearly
middlemen in such financial hideouts as Cyprus, Liechtenstein, and Panama? Was it wise to
let him kick off the program by including among the first 50 or so oil buyers a full dozen
based in Switzerland? Did nobody at the U.N. wonder about his choice of business partners
— such as a holding company in the Seychelles; the Burmese state lumber enterprise;
and the Center for Joint Projects at the executive committee of the Belarus-Russia Union?
On the suppliers' list, the entries are no less intriguing. To take just one typical
example: On the vague and generic lists provided by the U.N. to the public, you can see
that Saddam bought both milk and oil-industry equipment from Russia. Once you see the
in-house spreadsheet, however, what emerges is that Saddam bought not only oil equipment,
but more than $5 million worth of milk from a Russian state oil company, Zarubezhneft.
What look like diverse suppliers in various countries in some cases track back to fronts
elsewhere, or to parent companies that in the graft-rich environment of Oil-for-Food
clearly had enough of an inside track with Saddam to garner hundreds of millions worth of
business — hidden at least to some extent from both their competitors and the wider
public, which was asked to trust the U.N.
In other words, Saddam did pretty much what he wanted, and the U.N. role seems to have
consisted largely of occupying one more slot — and not a terribly vigilant one —
on his patronage payroll.
AIDING AL QAEDA?
Which brings us to back to terrorist ties, and Perelman's story of June 20, 2003, for
which the reporting checks out. In brief (hang on for the ride): One link ran from a
U.N.-approved buyer of Saddam's oil, Galp International Trading Corp., involved near the
very start of the program, to a shell company called ASAT Trust in Liechtenstein, linked
to a bank in the Bahamas, Bank Al Taqwa. Both ASAT Trust and Bank Al Taqwa were designated
on the U.N.'s own terror-watch list, shortly after 9/11, as entities "belonging to or
affiliated with Al Qaeda." This Liechtenstein trust and Bahamian bank were linked to
two closely connected terrorist financiers, Youssef Nada and Idris Ahmed Nasreddin —
both of whom were described in 2002 by Treasury as "part of an extensive financial
network providing support to Al Qaeda and other terrorist related organizations," and
both of whom appear on the U.N.'s list of individuals belonging to or affiliated with al
Qaeda.
The other tie between Oil-for-Food and al Qaeda, noted by Perelman, ran through another of
Saddam's handpicked, Oil-for-Food oil buyers, Swiss-based Delta Services — which
bought oil from Saddam in 2000 and 2001, at the height of Saddam's scam for grafting money
out of Oil-for-Food by way of under-priced oil contracts. Now shut down, Delta Services
was a subsidiary of a Saudi Arabian firm, Delta Oil, which had close ties to the Taliban
during Osama bin Laden's heyday in Afghanistan in the late 1990s. In discussions of graft
via Oil-for-Food, it has been assumed that the windfall profits were largely kicked back
to Saddam, or perhaps used to sway prominent politicians and buy commercial lobbying
clout. But that begs further inquiry. There was every opportunity here for Saddam not
solely to pocket the plunder, but to send it along to whomever he chose — once he had
tapped into the appropriate networks.
Are there other terrorist links? Did Saddam actually send money for terrorist uses through
those named by the Forward? Given the more than $100 billion that coursed through
Oil-for-Food, it would seem a very good idea to at least try to find out. And while there
has been great interest so far in the stunning sums of money involved in this fraud, there
has been rather less focus on the potential terrorist connections. While Treasury has been
ransacking the planet for Saddam's plunder, there is, as far as I have been able to
discover, no investigation so far in motion, or even in the making, focused specifically
on terrorist ties in those U.N. lists of Saddam's favored partners.
Indeed, the whereabouts of the full U.N. Oil-for-Food records themselves remain, to say
the least, confusing. By some official U.N. accounts, they were all turned over to the
Coalition Provisional Authority; by others they were not. A U.N. source explained to me
last week that some of the records might be in boxes somewhere on Long Island; yet another
says they were sent over to the U.S. Mission to the U.N. Especially crucial, one might
suppose, would be the bank records, which should show into which accounts, and where, the
Oil-for-Food funds were paid. But what is clear is that no one has so far sat down with
access to the full records and begun piecing together the labyrinth of Saddam's financing
with an eye, specifically, to potential terrorist ties.
If there is a silver lining to all this, it is that those contract lists and bank records
could be a treasure trove of information — an insider tour of what Saddam's regime
knew about the dark side of global finance. There are plenty of signs that the secret U.N.
lists became, in effect, Saddam's little black book (papered over with a blue U.N. label).
Though perhaps "little" is not the correct word. The labyrinth was vast. The
wisest move by the U.N., the U.S., or any other authority with full access to these
records, would be to make them fully public — thus recruiting help from observers
worldwide, not least the media, in digging through the hazardous waste left by
Oil-for-Food. The issue is not simply how much Saddam pilfered, or even whether he bought
up half the governments of Russia and France — but whether, under the U.N. charade of
supervision, he availed himself of the huge opportunities to fund carnage under the cover
of U.N. sanctions and humanitarian relief. We are way overdue to pick up that trail.
Article by Claudia Rosett -
senior fellow with the Foundation for the Defense of Democracies, and an adjunct fellow
with the Hudson Institute. |
