Global Policy Forum

Delays to Oil-for-Food Inquiry


By Jon Ashworth

May 1, 2004

The London banker overseeing the Iraq oil-for-food inquiry has claimed that politically motivated delays are hampering the search for up to $25 billion (£14 billion) plundered by Saddam Hussein. In an interview with The Times, Claude Hankes-Drielsma, adviser to the Iraq Governing Council, accused Paul Bremer, the coalition's chief administrator in Iraq, of obstructing an inquiry into assets creamed off under the UN oil-for-food programme.

KPMG, the accountancy firm, has traced hundreds of millions of dollars to bank accounts in Syria, Lebanon and Jordan, but its investigation has been put on hold after Mr Bremer questioned KPMG's appointment, then failed to pay for the probe. The firm has uncovered what Mr Hankes-Drielsma described as "one of the most sophisticated money-laundering operations they've seen".

Mr Hankes-Drielsma, 55, was speaking in London after a visit to Washington, where he urged Congress to speed up the inquiry. "This delay is unfortunate and people have raised the question: ‘Is this politically motivated?' It doesn't suit some people at this time to see the truth in a report that then cannot be disputed or questioned."

Investigators are concerned that the delay is making it easier for those involved to destroy incriminating evidence. Mr Hankes-Drielsma said: "I suspect shredders have been working flat out." Up to $50 billion was paid out between 1995 and 2003 in exchanging Iraqi oil for food and medical supplies. Investigators estimate that as much as half of that was siphoned off by Saddam or used to pay bribes and kickbacks, of which hundreds of millions of dollars may be recoverable.

The oil-for-food scandal emerged this year when a list of alleged beneficiaries was published in Iraq's al-Mada newspaper. Names on the list included Benon Sevan, the UN official who oversaw the programme, and George Galloway, the Independent MP for Glasgow Kelvin who was expelled from the Labour Party last year. Both deny any involvement. Beneficiaries allegedly received oil allocations or vouchers from Saddam which they then sold on at inflated prices. Kickbacks were paid in cash by adding 10 per cent or more to the value of invoices for goods sent to Iraq.

Mr Hankes-Drielsma first saw the list in December and recommended an investigation. He said: "The list was made up from proper, historic records in the ministries. Further research was done into one or two test cases and the back-up information that's available will frighten a lot of people. There are even letters from people saying: ‘We haven't had our full share'.

"The former French ambassador to the UN is on the list. The President of Indonesia. Lots of people in Russia. Many people in France who are extremely close to President Chirac. Saddam Hussein managed to buy influence round the world, through political parties, individuals, people of influence. A family in Jordan received $97 million." Mr Hankes-Drielsma said the UN was wholly culpable over its stewardship of the oil-for-food programme, for which it was paid over $1 billion. "Irrespective of whether any UN official actually put their hand in the till, they are all guilty, every one of them, for allowing this to operate in the way it operated.

"America and Britain have suddenly got a screaming baby with a very wet nappy and they want to hand it over before the elections in America. So what do they do? ‘Let's give it back to the UN.' How can the UN have a role in Iraq when its credibility is in serious question?" Oddly, KPMG was appointed without a competitive tender and even though the firm separately acts as auditor to the Iraq Development Fund.

Mr Hankes-Drielsma said KPMG's selection had been totally independent but the firm had to suspend work two months into its inquiry when Mr Bremer said he would release funds for the investigation only if the appointment was put out to tender. KPMG was duly reappointed by the Iraq Governing Council, but the coalition provisional authority put out its own tender. The KPMG investigation is on hold until the outcome is clear.

More Information on the Iraq Crisis
More Information on Sanctions Against Iraq
More Information on Iraq's Oil-for-Food Programme


FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.