More than 2,000 firms implicated in oil scandal

NEW YORK - More than 2,000 companies from around the world, including high profile names like DaimlerChrysler, Volvo Construction and Siemens, paid illicit kickbacks to Iraq, a report claimed yesterday.

The kickbacks allowed the regime of Saddam Hussein to sabotage the oil-for-food programme of the United Nations and pocket US$1.8bn in illegal profits.

A catalogue of companies implicated in the scandal was included in the final report into corruption in the US$64bn humanitarian programme, released yesterday by Paul Volcker, a former chairman of the Federal Reserve.

"Iraq's largest source of income from the programme came from kickbacks paid by companies it selected to receive contracts for humanitarian goods," the report said.

In addition to the 2,253 companies from 40 countries that passed money under the table to win contracts to supply humanitarian goods to Iraq, 139 oil-trading companies paid illicit commissions to win oil allocations from the Iraqi government.

The report also points a finger at some political figures, most notably the former French ambassador to the UN, Jean-Bernard Merimee, who is accused of taking oil allocations and selling them.

Also strongly criticised is France's BNP Paribas Bank, which was chosen by the UN to handle all the funds involved in the programme, under which Iraq was allowed to sell limited quantities of oil and use the proceeds to buy humanitarian goods.

It "failed to implement an adequate system to identify such payments", the report said.

DaimlerChrysler allegedly handed over a relatively small sum of US$7,000 on a contract worth US$70,000 to help secure a contract to supply the regime with an armoured van.

For its part, Volvo Construction of Brussels, which is separate from the car manufacturing arm, paid US$137,000 in illegal fees to win its contract, the report said.

Already, the scandal has triggered the charges being filed in the US against two Russian citizens and a well-known Texas oil magnate, Oscar Wyatt.

A Virginia-based oil trading company this month also pleaded guilty in New York to paying bribes.

Mr Merimee, meanwhile, is also facing criminal charges in France.

In a letter addressed yesterday to Kofi Annan, the UN Secretary General, Mr Volcker repeated his charge that the UN organisation as well as members of the Security Council had grossly lapsed in their responsibilities in overseeing the programme.

He said that far too much room for subversion had been left to Iraq.

"It was, as one past member of the council put, a compact with the Devil, and the Devil had means of manipulating the programme to its ends," he wrote.

- INDEPENDENT