Zeev's Turnips Talk Politics (ZTTP)

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U.S. weapons report details corruption of oil-for-food program
The United Nations imposed economic sanctions on Iraq after its invasion of Kuwait in 1990. The sanctions were modified in 1996, when the oil-for-food program was created to address the suffering of Iraqis.

At the time, world support for the continued embargo was weakening. The idea was that Iraq could sell some of its oil so long as proceeds went to food or medicine, not weapons.

However, Saddam Hussein's regime found ways to turn the program to its advantage. That corruption is detailed in a report released last week by the chief U.S. weapons inspector, Charles DUELFER.

Questions and answers on the issue prepared by USA TODAY reporter Steven Komarow.

Q: Did the oil-for-food program help the plight of poor Iraqis, who suffered because of the embargo aimed at punishing Saddam?

A: Yes. Under the program, $31 billion was spent on food, medicine and related items that significantly improved the health and nutrition of average Iraqis. But that money also weakened the political effectiveness of the embargo, because Saddam's regime was less threatened under the improved Iraqi economy. And, in addition to the food purchases, over time his government found several ways of using oil-for-food to raise illicit funds to further evade the embargo.

Q: How did Saddam corrupt the program to his advantage?

A: The renewed overseas shipments of oil provided opportunities for kickbacks and smuggling. Saddam created a voucher system, whereby people who helped the regime were rewarded with shares of profits from oil-for-food oil sales. And Saddam oversaw distribution of the food and medicine inside Iraq, providing a powerful tool for controlling domestic dissent.

Q: Who benefited from the lucrative oil vouchers issued by Saddam?

A: The Iraqi dictator targeted countries and individuals who could help him evade economic sanctions and eventually overturn them.

Officials from France, Russia and China were favored but many others also were named in the U.S. report as potential beneficiaries of the practice, which was not necessarily illegal. Among those whose names were found by the inspectors: Benon Sevan, the former chief of the oil-for-food program; Charles Pasqua, former French interior minister; President Megawati Sukarnoputri of Indonesia, and Russian ultranationalist Vladimir Zhirinovsky. Many of those named quickly denounced the report as containing unfounded allegations, because Iraqi records don't necessarily prove that Saddam's entreaties were accepted or that favors were done.

The inspectors also listed American companies and individuals. Their names were omitted from the officially released report because of U.S. privacy laws.

Q: How much money did Saddam make in evading the sanctions, including oil-for-food?

A: His regime got about $11 billion in illicit revenue from 1990 to the 2003 U.S.-led invasion. Most of it, about $7.5 billion, was from selling oil to neighboring countries, sometimes with tacit U.N. approval. After 1996, more than $2 billion came into Saddam's direct control from the oil-for-food program and related corruption.

Q: Did Saddam buy nuclear, biological or chemical weapons with the money?

A: The regime's weapons purchases were mostly conventional, such as ammunition and rocket-propelled grenades. But Saddam also dreamed of restarting his chemical and nuclear arms programs after the embargo was lifted. To keep that hope alive, and to maintain a base of research and sophisticated skills in Iraq, he bought"dual-use" machinery that had civilian uses but could be converted for production of banned weapons.

Q: Who helped Saddam violate the embargo and sell him weapons and prohibited machinery and supplies?

A: Saddam apparently had little trouble finding people willing to profit from the illegal trade. Companies in Syria, Jordan, Lebanon, Turkey, the United Arab Emirates and Yemen were buyers for Saddam. Technology came especially from states of the former Soviet bloc, including Belarus. Russian and French arms experts visited Iraq seeking contracts to rebuild its missile program. Iraq's foreign ministry and Iraqi intelligence carefully shepherded the most sensitive sales and often did business in cash to avoid detection.

Q: Was it always improper to do business with Saddam?

A: No, the oil-for-food program provided legitimate avenues for business. For example, oil sold under U.N. auspices was processed by major oil companies that do business all over the world, including in the USA.

However, several investigations were underway even before the DUELFER report was released. Paul Volcker, former chairman of the U.S. Federal Reserve, is heading a U.N. commission probing corruption in the program. At the center of that probe: Saddam's apparent effort to win support from key U.N. members by offering vouchers and other favors to their companies and officials. And a U.S. federal court in New York City is looking into possible criminal violations.

http://www.usatoday.com/news/world/iraq/2004-10-10-embargo-qna_x.htm