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‘Most of Saddam’s money smuggled’

UNITED NATIONS: Most of the money that Saddam Hussein illicitly obtained by cheating on UN sanctions on Iraq came from oil smuggling outside the UN oil-for-food program, the head of an independent inquiry said on Tuesday.

While there have been a number of estimates of the amount of corruption surrounding the oil-for-food program, including several by various US congressional investigators, “the reliability of those figures is in question,” said Paul Volcker, a former chairman of the US Federal Reserve. “When we feel we have reliable figures, we will publish them. But all those figures indicate the bulk of the money that is talked about is smuggling, not oil-for-food, strictly speaking,” Volcker said in a rare media interview.

He spoke with Alhurra, a US government-backed television network aimed at Arab audiences.

The United Nations imposed economic sanctions - including a ban on oil sales - on Iraq in 1990 after Saddam, Iraq’s then-president, invaded Kuwait.

The world body launched the oil-for-food program in December 1996 to ease the impact of the sanctions on ordinary Iraqis. The program, supervised by the 15-nation UN Security Council, authorized the government to sell oil and use the proceeds to buy civilian goods, and it remained in operation until November 2003.

Volcker’s comments appeared to coincide with the findings of Charles Duelfer, a former UN arms inspectors, in a report to the CIA in late September. While staff of the US Senate’s Permanent Subcommittee on Investigations estimated Saddam had pocketed $21 billion by cheating on the sanctions, Duelfer said he amassed $10.9 billion “through illicit means” between 1990, when the sanctions were first imposed, and 2003, when he was ousted. Of this amount, $1.5 billion was through kickbacks from contracts for goods purchased through the oil-for-food program while some $229,000 came from surcharges on oil sold under the program, according to Duelfer.

The remaining money came from smuggling oil to Jordan, Syria, Turkey and Egypt outside the program, Duelfer said.

There were, “without question, problems in the oil-for-food area,” Volcker told Alhurra.

“But when you look at those $10 billion figures, or $20 billion figures, most of those numbers are so-called smuggling, much of which was known and taken note of by the Security Council, but not stopped. That is, in my mind, an entirely different category than what went on within the oil-for-food program itself,” he said. reuters

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