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Senate investigation finds that US 'backed illegal Iraqi oil deals'

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  • Greg Cannon
    http://www.guardian.co.uk/usa/story/0,12271,1485648,00.html US backed illegal Iraqi oil deals Report claims blind eye was turned to sanctions busting by
    Message 1 of 1 , May 16, 2005
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      US 'backed illegal Iraqi oil deals'

      Report claims blind eye was turned to sanctions
      busting by American firms

      Julian Borger and Jamie Wilson in Washington
      Tuesday May 17, 2005
      The Guardian

      The United States administration turned a blind eye to
      extensive sanctions-busting in the prewar sale of
      Iraqi oil, according to a new Senate investigation.

      A report released last night by Democratic staff on a
      Senate investigations committee presents documentary
      evidence that the Bush administration was made aware
      of illegal oil sales and kickbacks paid to the Saddam
      Hussein regime but did nothing to stop them.

      The scale of the shipments involved dwarfs those
      previously alleged by the Senate committee against UN
      staff and European politicians like the British MP,
      George Galloway, and the former French minister,
      Charles Pasqua.

      In fact, the Senate report found that US oil purchases
      accounted for 52% of the kickbacks paid to the regime
      in return for sales of cheap oil - more than the rest
      of the world put together.

      "The United States was not only aware of Iraqi oil
      sales which violated UN sanctions and provided the
      bulk of the illicit money Saddam Hussein obtained from
      circumventing UN sanctions," the report said. "On
      occasion, the United States actually facilitated the
      illicit oil sales.

      The report is likely to ease pressure from
      conservative Republicans on Kofi Annan to resign from
      his post as UN secretary general.

      The new findings are also likely to be raised when Mr
      Galloway appears before the Senate subcommittee on
      investigations today.

      The Respect MP for Bethnal Green and Bow arrived
      yesterday in Washington demanding an apology from the
      Senate for what he called the "schoolboy dossier"
      passed off as an investigation against him.

      "It was full of holes, full of falsehoods and full of
      value judgments that are apparently only shared here
      in Washington," he said at Washington Dulles airport.

      He told Reuters: "I have no expectation of justice ...
      I come not as the accused but as the accuser. I am
      [going] to show just how absurd this report is."

      Mr Galloway has denied allegations that he profited
      from Iraqi oil sales and will come face to face with
      the committee in what promises to be one of the most
      highly charged pieces of political theatre seen in
      Washington for some time.

      Yesterday's report makes two principal allegations
      against the Bush administration. Firstly, it found the
      US treasury failed to take action against a Texas oil
      company, Bayoil, which facilitated payment of "at
      least $37m in illegal surcharges to the Hussein

      The surcharges were a violation of the UN Oil For Food
      programme, by which Iraq was allowed to sell heavily
      discounted oil to raise money for food and
      humanitarian supplies. However, Saddam was allowed to
      choose which companies were given the highly lucrative
      oil contracts. Between September 2000 and September
      2002 (when the practice was stopped) the regime
      demanded kickbacks of 10 to 30 US cents a barrel in
      return for oil allocations.

      In its second main finding, the report said the US
      military and the state department gave a tacit green
      light for shipments of nearly 8m barrels of oil bought
      by Jordan, a vital American ally, entirely outside the
      UN-monitored Oil For Food system. Jordan was permitted
      to buy some oil directly under strict conditions but
      these purchases appeared to be under the counter.

      The report details a series of efforts by UN monitors
      to obtain information about Bayoil's oil shipments in
      2001 and 2002, and the lack of help provided by the US

      After repeated requests over eight months from the UN
      and the US state department, the treasury's office of
      foreign as sets control wrote to Bayoil in May 2002,
      requesting a report on its transactions but did not
      "request specific information by UN or direct Bayoil
      to answer the UN's questions".

      Bayoil's owner, David Chalmers, has been charged over
      the company's activities. His lawyer Catherine Recker
      told the Washington Post: "Bayoil and David Chalmers
      [said] they have done nothing illegal and will
      vigorously defend these reckless accusations."

      The Jordanian oil purchases were shipped in the weeks
      before the war, out of the Iraqi port of Khor
      al-Amaya, which was operating without UN approval or

      Investigators found correspondence showing that Odin
      Marine Inc, the US company chartering the seven huge
      tankers which picked up the oil at Khor al-Amaya,
      repeatedly sought and received approval from US
      military and civilian officials that the ships would
      not be confiscated by US Navy vessels in the Maritime
      Interdiction Force (MIF) enforcing the embargo.

      Odin was reassured by a state department official that
      the US "was aware of the shipments and has determined
      not to take action".

      The company's vice president, David Young, told
      investigators that a US naval officer at MIF told him
      that he "had no objections" to the shipments. "He said
      that he was sorry he could not say anything more. I
      told him I completely understood and did not expect
      him to say anything more," Mr Young said.

      An executive at Odin Maritime confirmed the senate
      account of the oil shipments as "correct" but declined
      to comment further.

      It was not clear last night whether the Democratic
      report would be accepted by Republicans on the Senate
      investigations committee.

      The Pentagon declined to comment. The US
      representative's office at the UN referred inquiries
      to the state department, which fail to return calls.
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