Iraq official heading oil-for-food probe killed

10.00am

BAGHDAD - The Iraqi official heading the investigation into alleged corruption in the United Nations oil-for-food program was killed in a bomb attack earlier this week, officials familiar with the probe said on Saturday.

Ihsan Karim, head of the Board of Supreme Audit, died in hospital after a bomb placed under one of the cars in his convoy exploded in Baghdad on Thursday, the officials said.

Iraq's former US Governor Paul Bremer gave the board independence from the executive branch of government and appointed Karim as its head in April.

The board appointed international accountants Ernst and Young in May to investigate commissions Iraqi and foreign companies paid to former President Saddam Hussein and his government for securing billions of dollars worth of contracts under the 1996-2003 oil-for-food program.

The investigation undermined a separate KPMG probe initiated by the now dissolved Iraqi Governing Council, and led to tension with former financier Ahmad Chalabi, who holds documents alleging that some international suppliers paid at least 10 per cent of the value of contracts to Saddam.

KPMG has stopped working on its investigation and did not issue a report due in June about the alleged fraud. This is because a bill of several hundred thousand dollars of work has not yet been paid, people familiar with the contact said.

Zaab Sethna, a spokesman for Chalabi, said the audit board was poorly equipped to handle the investigation.

"The assassination of Mr Karim is very worrying. Bremer appointed the audit board and left them on their own," Sethna told Reuters.

"The investigation was the highest profile probe the board was handling. It is impossible to speculate who killed Mr Karim, but the oil-for-food corruption involved very powerful people inside and outside Iraq," he added.

The US General Accounting Office has said Saddam and his circle raised $4.4 billion in illegal revenue by imposing oil surcharges and commissions on suppliers of goods to Iraq under the oil-for-food program.

Billions of dollars of goods flowed through the program, which the United Nations administered from New York through French bank Paribas.

Under US pressure, the United Nations is also investigating alleged corruption in the program, which was set up to use Iraqi oil revenue to provide Iraqis with food, medical supplies and essential equipment under UN supervision so that UN sanctions on Iraq were not violated.

- REUTERS

Herald Feature: Iraq