Americans among Iraq oil scandal beneficiaries

Three private citizens, five corporations named by congressional officials

October 10, 2004|By T. Christian Miller | T. Christian Miller,LOS ANGELES TIMES

WASHINGTON - Three U.S. citizens, all of whom campaigned against Iraq sanctions, were among those who received grants from a scandal-ridden oil program overseen by Saddam Hussein, according to congressional officials and a CIA report released last week.

Five U.S. corporations were also among the beneficiaries of the so-called oil vouchers that Hussein gave to top political figures and important companies to win diplomatic or military favors, the sources said. They include major companies such as Chevron, Texaco and Exxon Mobil, as well as smaller companies such as Houston-based Bay Oil USA.

Oscar Wyatt, a Texas oil baron who received more money than any other individual, announced in March 1997 that he would retire and begin lobbying in Washington to lift sanctions against Iraq and Libya. In addition to personal vouchers he received between 1999 and last year, his company was awarded oil vouchers in 1996 and 1997 to pump 11.8 million barrels of oil, according to Iraqi documents contained in the CIA report.

Wyatt did not return a request for comment.

The names were left out of a report released to the public last week by Charles A. Duelfer, who headed the CIA effort to document Hussein's weapons of mass destruction. A complete copy with the names included was given to some Congressional representatives Thursday.

It remains unclear whether any of the companies' transactions were illegal, because all companies named in the report were cleared to purchase oil from Iraq in the early days of the United Nations' Oil For Food program, which began in 1996.

But it appears to violate U.N. sanctions for an individual to have been awarded an oil grant, because petroleum purchased in the program was supposed to be sold to corporate end-users, oil experts said.

House investigators said they planned to look into whether any of the individuals or companies were awarded the oil contracts in exchange for carrying out propaganda or other activities for Hussein.

The Oil For Food program is the subject of nine separate investigations, including one by federal prosecutors in New York who have sent subpoenas to several U.S. oil companies seeking information on their activity in the program.

The program was poorly monitored and opportunities for corruption were rampant, according to those who have studied the United Nations' Oil For Food program, under which Hussein sold oil in return for food and humanitarian aid.

The CIA report by Duelfer found that Hussein used the oil voucher program as a means to pay bribes to top political officials throughout the world.

Typically, Hussein would personally approve the issuance of the vouchers, which provided the holder the right to a certain quantity of Iraqi oil. If issued to an individual, the vouchers could be sold to a middleman who would then actually purchase the oil. The money was supposed to end up in a bank account monitored by the United Nations, though kickbacks and surcharges were common, Duelfer's report said.

The report contained documents from Iraqi's state oil company that portrayed a far greater level of involvement by U.S. individuals than previously known.

Shakir Al Khafaji is a Detroit businessmen who has long led missions to deliver food and medicine to Iraqi villages.

Khafaji was listed as having been awarded 2 million barrels of oil that provided a profit of $931,000 when they were loaded in 2001, according to Duelfer's report and congressional investigators. Khafaji was awarded three more vouchers for 5 million barrels of oil between 2001 and last year, but he never collected on them, the records show.

Khafaji did not return calls for comment.

Samir Vincent, who headed a Viriginia-based firm called Phoenix International, was also on the list, according to investigators. In 1999 and 2000, Vincent helped to organize a tour through the United States in which Iraqi religious leaders met with U.S. religious leaders such as the Rev. Billy Graham.

Phoenix was awarded 1.5 million barrels of oil in 1999 and 2000 that netted him a profit of $1 million, according to the CIA report. All told, Vincent and Phoenix were given vouchers for 7.9 million barrels of oil that netted $2.8 million between 1997 and 2001, the Duelfer report showed. Vincent could not be reached for comment.

San Ramon, Calif.-based Chevron-Texaco and Dallas-based Exxon Mobil or their predecessor companies were also listed in the Iraqi documents in Duelfer's reports, congressional investigators said.

Chevron and Texaco, then separate companies, were listed as having purchased 11.3 million barrels of oil for a profit of $2 million between 1996 and 1999. Mobil, which later merged with Exxon, bought 9.2 million barrels of oil for a profit of $1.7 million, the records show.

Both companies said Friday that any oil pumped from Iraq was done in accordance with applicable U.S. laws and U.N. regulations.

The Los Angeles Times is a Tribune Publishing newspaper.

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