Pressure grows on Galloway over charitable activities

By PAUL PEACHEY and MARIE WOOLF

LONDON - British Labour MP George Galloway faced further pressure over Iraq on Wednesday with the possibility of an inquiry by the Attorney General and the Parliamentary standards watchdog into his charitable activities.

The finances of the Mariam Appeal he set up for humanitarian reasons have been the target of persistent speculation and may also be subject to an inquiry by the Charity Commission after a complaint from a member of the public.

Iain Duncan Smith, the Conservative leader, added to the controversy surrounding the appeal yesterday when he called for any allegations to be subject to an inquiry by the Parliamentary Standards Commissioner.

Meanwhile, Mr Galloway went on the counter-attack over claims that he had taken up to £375,000 ($1.06 million) from Saddam Hussein's regime, describing the claim against him as, "a lie of fantastic proportions".

Writing in the Independent, the MP for Glasgow Kelvin said it would be proved in court that he had never "personally benefited" from his work in Iraq.

"The Telegraph says I traded in oil and food under the oil for food programme. To whom did I sell this oil (which incidentally is done through the United Nations Sanctions Committee and subject to the most forensic scrutiny)? And what happened to the proceeds; in other words, where is the money?" he asked.

Inquiries by the Independent revealed that the Jordanian businessman named as Mr Galloway's representative in Iraq made money from a web of deals under the UN oil-for-food programme. Critics of the programme, which has delivered humanitarian aid worth £17 billion since 1997, allege that Saddam's regime made up to £1.25billion a year by manipulating the project and smuggling.

Fawaz Zureikat, 48, said he had won a series of legitimate contracts under the program-me, ranging from supplying food to delivering spare parts for industry. He would not give details of the extent of his work and when asked whether he had been requested to pay a kickback to the Iraqi regime, he replied: "No comment". He said he had won his contracts because of his contacts across ministries from working in the country for 17 years.

"I cannot talk about my business. This is private," he said.

Mr Zureikat, who trained as an engineer in Baghdad and worked for the Iraqi oil ministry, is reported by the Daily Telegraph to have met Iraqi intelligence officers to negotiate on Mr Galloway's behalf for oil contracts. Mr Galloway and Mr Zureikat deny any involvement in such meetings.

The programme was set up as a temporary measure to relieve the suffering of the Iraqi people after five years of sanctions, which were imposed in August 1990 following the Iraqi invasion of Kuwait. The UN says there are strict controls to prevent abuse of the programme, with each contract scrutinised by the UN sanctions committee. But critics say it is also a useful source of backhanders and of profits for the regime. The programme means two thirds of the proceeds of the sale of Iraqi oil go to humanitarian needs. The rest goes on war reparations, payment of UN weapons inspectors, and administration.

Iraq was initially allowed to sell £1.25 billion of oil every six months to middlemen and companies it selected. The amount of oil to be sold was increased until the cap was removed in December 1999. Its current phase runs until 12 May.

The middlemen have made their money by selling on the international markets.

More than 1,000 companies applied to deal in Iraqi oil. The companies, from dozens of countries, initially had to be vetted by their governments before they were allowed to proceed.

John Fawcett, who investigated sources of funding for Saddam for the Coalition for International Justice, said: "We estimated that just on the oil sales side, there were US$200m to US$300m in kickbacks. Anybody that you see buying oil from the second half of 2000 and virtually all of 2001, you can assume there was a kickback. The UN oversight was virtually nil.

"The system is absolutely rotten. The programme is a scandal that has been brewing and waiting to burst."

- INDEPENDENT

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