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Iraq: Bush Conceals Names of U.S. Firms That Paid Kickbacks to Saddam

by Lawrence M. O'RourkeMcClatchy Newspapers
April 8th, 2004

Saddam Hussein siphoned off $10.1 billion from Iraq's oil-for-food program through illegal oil contracts and kickback deals with private suppliers of food and medicine, a congressional agency said Wednesday.

John Negroponte, U.S. ambassador to the United Nations, told the Senate Foreign Relations Committee that the Bush administration can identify the private business firms that cut kickback deals with Saddam Hussein, but intends to keep the names secret.

Sens. Richard Lugar, R-Ind., and Joseph Biden, D-Del., urged Negroponte to make the names public so that the United States can prevent shakedowns by the new Iraqi government scheduled to assume power on June 30.

"This corruption was not solely a product of Saddam Hussein's machinations," Lugar said. "He required members of the U.N. Security Council who were willing to be complicit in his actions, and he required U.N. officials and contractors who were dishonest, inattentive, or willing to make damaging compromises in pursuit of a compassionate mission."

Patrick Kennedy, a U.S. official working on United Nations management reform, said Saddam's regime "was very clever at adding tiny amounts to contracts to provide kickbacks and additional revenue. They added a little bit to a lot and made it up in volume."

Negroponte said efforts by the United States to halt the kickback schemes were blocked by Russia, France and China. He said it has been difficult to document the corruption because much of the paperwork was destroyed during the U.S.-led invasion of Iraq last year and its aftermath.

Biden warned that corrupt Iraqi politicians could steal large sums from the billions of dollars President Bush wants to spend on the reconstruction and establishment of democracy in Iraq.

Robin Raphel, coordinator of the U.S. office of Iraq reconstruction at the State Department, said the United States has reason to be concerned that the next Iraqi government will engage in the same corrupt practices as Saddam Hussein. She said U.S. officials will try to block the kickbacks while serving as technical advisers to the new Iraqi government agencies.

"There is no doubt that billions of dollars that should have been spent on humanitarian needs in Iraq were siphoned off by Saddam Hussein's regime through a system of surcharges, bribes, and kickbacks," Lugar said.

Lugar said a "portion of those illicit funds" might be supporting the Iraqis fighting the U.S.-led coalition in Iraq.

Sen. Christopher Dodd, D-Conn., said that 72 percent of the $63 billion revenue from legal sales of Iraqi oil was spent on food and medicine that "saved the Iraqi people from a human tragedy."

U.S. officials said that $7 billion was taken from the oil fund to pay for Iraq's postwar reconstruction.

In a new report, the congressional General Accounting Office estimated that Saddam's regime from 1997 through 2002 acquired $10.1 billion illegally through the sale of $5.7 billion in oil smuggled to Syria, Turkey and Jordan, and $4.4 billion through kickbacks paid by firms selling food, medicine and other goods to Iraq.

The GAO's estimate of $10.1 billion was $3.5 billion higher than its estimate in 2002 as the Bush administration accused Iraq of violating United Nations sanctions imposed in 1990 after Iraq invaded Kuwait.

Joseph Christoff, the GAO director for international affairs and trade, said the pattern of corruption "raises concerns about the Iraqi government's ability to manage the oil-for-food commodities and about $32 billion in expected donor reconstruction funds."

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