Volcker Report Puts Russia at Top in Iraq Wrongdoing
Culminating 18 months of intense and often controversial investigations into allegations of corruption involving the Oil for Food program in Saddam Hussein`s Iraq, the UN`s Independent Inquiry Committee presented its report last week revealing how Russian companies topped a list of 2,500 that paid illegal surcharges and kickbacks to Hussein for the privilege of siphoning off his oil.
Paul Volcker, the former chairman of the U.S. Federal Reserve Board who headed the investigation, has made allegations against Russian companies in the past. But Thursday`s report, the fifth and final version presented by the Committee at a special session of the UN Security Council, touched off a scandal among Russian foreign officials.
According to the results of the inquiry, Russia led some 60 countries that had companies involved in illicit deals, allowing Saddam to embezzle $1.8 billion. Near the top of the list was the Russian oil giant Lukoil, former Kremlin chief of staff Alexander Voloshin, and the ultranationalist MP Vladimir Zhirinovsky.
Both had been named in previous reports in the past, but the scope of last week`s revelations prompted Russia`s Foreign Minister Sergei Lavrov to warn of its own investigation. On Friday, Lavrov alleged that some of the documents used in the inquiry bore falsified signatures. Later on Saturday, he said the Foreign Ministry may request that the Volcker committee reveal its sources.
Starting in 1996, the $84 billion Oil for Food program had allowed Iraq to sell a limited - and then unlimited - volume of oil as long as the profits were used to pay for humanitarian aid to a population hit hard by the trading sanctions imposed on Saddam by the international community. By manipulating the program, Saddam managed to evade the sanctions, imposing illegal surcharges on the oil sales. For example, the report says that 248 companies were involved in exporting oil out of Iraq, while 139 allegedly paid kickbacks to Saddam for the privilege. In all, Russian companies received about $19.3 billion worth of oil exported from Iraq, or some 30 percent of the total volume. Because the Russian Energy and Fuel Ministry was involved in deciding who gets Iraqi oil, a number of political organizations - and not just commercial - profited from some of the illicit deals. Among them was the Communist Party, an avid opponent of trade sanctions against Iraq and a party whose leaders maintained close ties with Iraq. Party head Gennady Ziuganov even met with Hussein just ahead of the U.S. invasion in 2003 and called on Russia to use its veto power in the UN Security Council to stop the war. The party walked away with some 125.1 million barrels of oil.
Zhirinovsky, meanwhile, got 73 million barrels in exchange for his adherence to certain political positions that were favorable for Saddam`s Iraq, the report alleged. He too actively opposed UN sanctions, and made heated statements against the U.S. military intervention.
All of the individuals and companies named in the report - in particular Zhirinovsky - have denied receiving anything illicitly from the Hussein regime.
The Moscow News
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