As we all know, repugs in the Congress and the right-wing blabb machine has for the last several months been talking endlessly about the UN's "Oil for Food" scandal. Here is a fine article from the WaPo about how Saddam made his money, and why its obvious repugs sole motivation is attacking the UN, even while overlooking much more. BUt not that I would expect much from House republicans.
Hussein's Illicit Oil Sales Detailed
U.S., Others Acquiesced in Iraqi Transactions Outside U.N. Program
By Colum Lynch
Washington Post Staff Writer
Thursday, February 3, 2005; Page A18
UNITED NATIONS -- In February 2003, a Dutch oil expert monitoring Iraqi crude exports for the United Nations received a troubling tip: A cluster of supertankers had been spotted loading tons of the stuff at the unauthorized port of Khor al-Amaya.
Michel Tellings immediately alerted U.N.-based diplomats from Britain and the United States, which then commanded an international fleet of vessels charged with stopping Iraqi oil smuggling through the Persian Gulf. But the tankers sailed on, unmolested by the flotilla from the Maritime Interdiction Force.
Diplomats and oil brokers now say that the tankers were part of an illicit Iraqi scheme to supply Jordan with hundreds of millions of dollars' worth of oil each year, and that the United States turned a blind eye to it.
While a series of U.N., federal and congressional investigations are probing allegations of mismanagement and corruption in the U.N. oil-for-food program, this episode illustrates how the United States and other Security Council members acquiesced in Saddam Hussein's efforts to sell billions of dollars' worth of oil outside that program -- in violation of U.N. sanctions.
The United Nations imposed sanctions on Iraq to punish it for invading Kuwait in 1990. In 1996, after those measures had effectively crippled Iraq's economy, the United Nations established the oil-for-food program to allow tightly monitored sales of Iraqi oil to fund purchases of food, medications and other humanitarian goods.
Hussein's government earned at least $2 billion from illicit trade through the oil-for-food program, according to a report by CIA adviser Charles A. Duelfer, who has compiled the best-documented figures available. But the government earned more than $8.5 billion outside the oil-for-food program from trade agreements with foreign governments and from oil smuggling to Jordan, Syria and Turkey and others, the report says. Trade with Jordan, Baghdad's largest revenue source, provided Iraq with $4.4 billion.
"These sources of money were enormously lucrative for Saddam, and a much bigger source of corruption for him than the oil-for-food program," said Carne Ross, a former British diplomat who oversaw his government's sanctions policy on Iraq at the United Nations. "The point is, why isn't the Congress investigating why the United States and the U.K. agreed to allow this trade to go on when it was sustaining Saddam's regime?"
Several Republican-led congressional committees investigating the oil-for-food program have shown little interest in pursuing the smuggling allegations. Staff members on those committees said they were focusing on U.N. failures in managing the program to prevent them from recurring.
Democrats on the Senate's Permanent Subcommittee on Investigations are looking into whether the United States or other countries were told that Iraq was trading oil with neighboring countries in violation of the sanctions, a minority investigator said. The minority staff will also look specifically into the shipments from Khor al-Amaya, the investigator said, speaking on the condition of anonymity, citing a committee policy prohibiting staff members from giving on-the-record interviews.
Reports of shipments from Khor al-Amaya were published in February 2003. But the Financial Times and the Italian business daily Il Sole 24 Ore first reported last month that U.S. officials had been notified of the activity.
Bush administration officials have not explained why they did not stop the exports from Khor al-Amaya, but they were fully aware of Jordan's oil trade with Iraq. Both the Clinton and Bush administrations repeatedly notified Congress that they were waiving U.S. restrictions on assistance to Jordan and Turkey for importing Iraqi oil in violation of sanctions, according to documents supplied by congressional investigators.
State Department spokesman Richard Boucher said earlier this month that the department had passed the United Nations' warning on to the Maritime Interdiction Force and is "still looking into" the smuggling allegations.
Jordan declined to comment through its U.N. mission.
Jordan has relied almost entirely on Iraqi crude since the 1991 Persian Gulf War, when its main oil supplier, Saudi Arabia, cut off shipments because of Amman's support of Hussein. After the war, the government of Jordanian King Hussein asked the Security Council for an exemption from the trade sanctions.
The 15-nation council "took note" of the request and then largely ignored Iraq's exports of discounted crude to Jordan outside the oil-for-food program.
The oil trade "was certainly a technical violation of the sanctions," said James Placke, a former deputy assistant secretary of state for Near Eastern and South Asian affairs during the Reagan administration and a retired Middle East analyst at Cambridge Energy Research Associates. "Jordan, to its credit, notified the council, but the council didn't act."
Placke said most of the oil was trucked across the Iraqi border to Jordan's refinery in Zarqa, about 30 miles north of Amman. But several weeks before the United States invaded Iraq in March 2003, Jordan began loading massive quantities of oil from Khor al-Amaya. "They could see they were likely to get caught in an oil squeeze," Placke said.
At the time, the terminals at the Iraqi port of Mina al-Bakr and at Ceyhan, Turkey, were the only ones authorized to handle oil shipments under the oil-for-food program.
Before the invasion, the Jordanians contacted several international brokers to hire tankers willing to ship Iraqi crude from the Persian Gulf, according to Preston Carter, a broker who participated in the trade. During the war, Jordan hired scores of tankers to store crude at sea in the gulf, according to a spokesman for Tankship Transport Ltd., the Bahamian-based company that owned one of the ships.
"As far as I'm aware, there was nothing surreptitious or secret going on, and none of the [tanker] owners were trying to hide," said Carter, the managing director of London-based Petrian Shipbrokers.
Odin Marine Inc. of Stamford, Conn., obtained a contract from a little-known Jordanian firm, Millennium for the Trade of Raw Materials & Mineral Oils, to charter several tankers, Carter said.
David E. Young, a managing director of Odin Marine, said confidentiality agreements prevent him from divulging any details about the shipping arrangements his company has handled. Asked about the allegations of smuggling at Khor al-Amaya, Young said everything his company did was "legitimate."
Ahed Sokhon, a Jordanian businessman who was identified as Millennium's chief executive in a listing of corporations published by Dun & Bradstreet, said: "We do not embark on any transactions that are not legal or legitimate."
Tellings, the Dutch oil expert who served as one of three U.N. oil overseers, said his sources at Mina al-Bakr and independent inspectors posted in vessels reported the activities underway at Khor al-Amaya. "I got messages from different sources that vessels were turning up in Khor al-Amaya," Tellings said. "It is not an authorized spot; there are no inspectors."
"I can confirm we saw manipulation, tankers coming and going," Jan Heinsbroek, president of Saybolt International B.V., which monitored oil exports for the United Nations inside Iraq. He said Saybolt informed the Maritime Interdiction Force "at least on one occasion" about shipments from Khor al-Amaya. "They confirmed reception of the information."
Tellings found it "amazing" that the 20-nation force, which had regularly netted small vessels smuggling tiny amounts of gas oil and diesel fuel, proved "not to be very good at intercepting" 300-ton tankers ferrying the same cargo.
The American and British diplomats who had transmitted his warning to their superiors also seemed "puzzled" by the maritime force's lack of action, he said. The issue was raised informally at a meeting of mid-ranking officials on the U.N. sanctions committee, but there was no follow-up, and the committee's senior diplomats never formally discussed it. "It was not discussed in the committee, as far as I can recall," said Germany's ambassador to the United Nations, Gunter Pleuger, who served as the committee's chairman.
"I'll remind you that the United States did a great deal during this period to enforce Security Council sanctions against Iraq," Boucher said. "The Maritime Interdiction Force, supported by some 20 nations, boarded and inspected over 15,000 vessels during the time of sanctions and diverted over 1,000 of them."
A spokesman for the U.S. Central Command, which oversaw the Maritime Interdiction Force, said he could not establish the facts surrounding the shipments from Khor al-Amaya. "I haven't been able to find any clear record, something we can tie to that specific location," Navy Cmdr. Jeffrey A. Breslau said.
Staff writer Justin Blum and researcher Magda Jean-Louis in Washington contributed to this report.
Hussein's Illicit Oil Sales Detailed
U.S., Others Acquiesced in Iraqi Transactions Outside U.N. Program
By Colum Lynch
Washington Post Staff Writer
Thursday, February 3, 2005; Page A18
UNITED NATIONS -- In February 2003, a Dutch oil expert monitoring Iraqi crude exports for the United Nations received a troubling tip: A cluster of supertankers had been spotted loading tons of the stuff at the unauthorized port of Khor al-Amaya.
Michel Tellings immediately alerted U.N.-based diplomats from Britain and the United States, which then commanded an international fleet of vessels charged with stopping Iraqi oil smuggling through the Persian Gulf. But the tankers sailed on, unmolested by the flotilla from the Maritime Interdiction Force.
Diplomats and oil brokers now say that the tankers were part of an illicit Iraqi scheme to supply Jordan with hundreds of millions of dollars' worth of oil each year, and that the United States turned a blind eye to it.
While a series of U.N., federal and congressional investigations are probing allegations of mismanagement and corruption in the U.N. oil-for-food program, this episode illustrates how the United States and other Security Council members acquiesced in Saddam Hussein's efforts to sell billions of dollars' worth of oil outside that program -- in violation of U.N. sanctions.
The United Nations imposed sanctions on Iraq to punish it for invading Kuwait in 1990. In 1996, after those measures had effectively crippled Iraq's economy, the United Nations established the oil-for-food program to allow tightly monitored sales of Iraqi oil to fund purchases of food, medications and other humanitarian goods.
Hussein's government earned at least $2 billion from illicit trade through the oil-for-food program, according to a report by CIA adviser Charles A. Duelfer, who has compiled the best-documented figures available. But the government earned more than $8.5 billion outside the oil-for-food program from trade agreements with foreign governments and from oil smuggling to Jordan, Syria and Turkey and others, the report says. Trade with Jordan, Baghdad's largest revenue source, provided Iraq with $4.4 billion.
"These sources of money were enormously lucrative for Saddam, and a much bigger source of corruption for him than the oil-for-food program," said Carne Ross, a former British diplomat who oversaw his government's sanctions policy on Iraq at the United Nations. "The point is, why isn't the Congress investigating why the United States and the U.K. agreed to allow this trade to go on when it was sustaining Saddam's regime?"
Several Republican-led congressional committees investigating the oil-for-food program have shown little interest in pursuing the smuggling allegations. Staff members on those committees said they were focusing on U.N. failures in managing the program to prevent them from recurring.
Democrats on the Senate's Permanent Subcommittee on Investigations are looking into whether the United States or other countries were told that Iraq was trading oil with neighboring countries in violation of the sanctions, a minority investigator said. The minority staff will also look specifically into the shipments from Khor al-Amaya, the investigator said, speaking on the condition of anonymity, citing a committee policy prohibiting staff members from giving on-the-record interviews.
Reports of shipments from Khor al-Amaya were published in February 2003. But the Financial Times and the Italian business daily Il Sole 24 Ore first reported last month that U.S. officials had been notified of the activity.
Bush administration officials have not explained why they did not stop the exports from Khor al-Amaya, but they were fully aware of Jordan's oil trade with Iraq. Both the Clinton and Bush administrations repeatedly notified Congress that they were waiving U.S. restrictions on assistance to Jordan and Turkey for importing Iraqi oil in violation of sanctions, according to documents supplied by congressional investigators.
State Department spokesman Richard Boucher said earlier this month that the department had passed the United Nations' warning on to the Maritime Interdiction Force and is "still looking into" the smuggling allegations.
Jordan declined to comment through its U.N. mission.
Jordan has relied almost entirely on Iraqi crude since the 1991 Persian Gulf War, when its main oil supplier, Saudi Arabia, cut off shipments because of Amman's support of Hussein. After the war, the government of Jordanian King Hussein asked the Security Council for an exemption from the trade sanctions.
The 15-nation council "took note" of the request and then largely ignored Iraq's exports of discounted crude to Jordan outside the oil-for-food program.
The oil trade "was certainly a technical violation of the sanctions," said James Placke, a former deputy assistant secretary of state for Near Eastern and South Asian affairs during the Reagan administration and a retired Middle East analyst at Cambridge Energy Research Associates. "Jordan, to its credit, notified the council, but the council didn't act."
Placke said most of the oil was trucked across the Iraqi border to Jordan's refinery in Zarqa, about 30 miles north of Amman. But several weeks before the United States invaded Iraq in March 2003, Jordan began loading massive quantities of oil from Khor al-Amaya. "They could see they were likely to get caught in an oil squeeze," Placke said.
At the time, the terminals at the Iraqi port of Mina al-Bakr and at Ceyhan, Turkey, were the only ones authorized to handle oil shipments under the oil-for-food program.
Before the invasion, the Jordanians contacted several international brokers to hire tankers willing to ship Iraqi crude from the Persian Gulf, according to Preston Carter, a broker who participated in the trade. During the war, Jordan hired scores of tankers to store crude at sea in the gulf, according to a spokesman for Tankship Transport Ltd., the Bahamian-based company that owned one of the ships.
"As far as I'm aware, there was nothing surreptitious or secret going on, and none of the [tanker] owners were trying to hide," said Carter, the managing director of London-based Petrian Shipbrokers.
Odin Marine Inc. of Stamford, Conn., obtained a contract from a little-known Jordanian firm, Millennium for the Trade of Raw Materials & Mineral Oils, to charter several tankers, Carter said.
David E. Young, a managing director of Odin Marine, said confidentiality agreements prevent him from divulging any details about the shipping arrangements his company has handled. Asked about the allegations of smuggling at Khor al-Amaya, Young said everything his company did was "legitimate."
Ahed Sokhon, a Jordanian businessman who was identified as Millennium's chief executive in a listing of corporations published by Dun & Bradstreet, said: "We do not embark on any transactions that are not legal or legitimate."
Tellings, the Dutch oil expert who served as one of three U.N. oil overseers, said his sources at Mina al-Bakr and independent inspectors posted in vessels reported the activities underway at Khor al-Amaya. "I got messages from different sources that vessels were turning up in Khor al-Amaya," Tellings said. "It is not an authorized spot; there are no inspectors."
"I can confirm we saw manipulation, tankers coming and going," Jan Heinsbroek, president of Saybolt International B.V., which monitored oil exports for the United Nations inside Iraq. He said Saybolt informed the Maritime Interdiction Force "at least on one occasion" about shipments from Khor al-Amaya. "They confirmed reception of the information."
Tellings found it "amazing" that the 20-nation force, which had regularly netted small vessels smuggling tiny amounts of gas oil and diesel fuel, proved "not to be very good at intercepting" 300-ton tankers ferrying the same cargo.
The American and British diplomats who had transmitted his warning to their superiors also seemed "puzzled" by the maritime force's lack of action, he said. The issue was raised informally at a meeting of mid-ranking officials on the U.N. sanctions committee, but there was no follow-up, and the committee's senior diplomats never formally discussed it. "It was not discussed in the committee, as far as I can recall," said Germany's ambassador to the United Nations, Gunter Pleuger, who served as the committee's chairman.
"I'll remind you that the United States did a great deal during this period to enforce Security Council sanctions against Iraq," Boucher said. "The Maritime Interdiction Force, supported by some 20 nations, boarded and inspected over 15,000 vessels during the time of sanctions and diverted over 1,000 of them."
A spokesman for the U.S. Central Command, which oversaw the Maritime Interdiction Force, said he could not establish the facts surrounding the shipments from Khor al-Amaya. "I haven't been able to find any clear record, something we can tie to that specific location," Navy Cmdr. Jeffrey A. Breslau said.
Staff writer Justin Blum and researcher Magda Jean-Louis in Washington contributed to this report.
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