The Saddam Oil Vouchers Affair

Introduction

On January 25, 2004, the Iraqi independent daily Al-Mada published a list of approximately 270 individuals and entities who were beneficiaries of Saddam Hussein's oil vouchers. [1] The report evoked reactions from many of those included in the list as well as from the Arab media, among them apologists for Saddam's regime. The fact that so many have opted for silence may give credence to the list's authenticity.

A former undersecretary in the Iraqi Ministry of Petroleum, Abd Al-Saheb Salman Qutb, said that the ministry possesses documents proving the authenticity of the list published by Al-Mada. The list was originally the property of the State Oil Marketing Organization (SOMO), which was responsible for marketing Iraqi petroleum. [2] Mr. Qutb also said that the ministry was collecting the information for submission to Interpol, which could then pursue the voucher beneficiaries. [3]

The Iraqi Governing Council has focused on 46 foreign individuals and organizations included on the lists, primarily from neighboring countries, to determine appropriate action. [4] Council member Muwwafaq Al-Rabi'i said during a visit to Beirut that the council has "tons of documents" but emphasized that the publication of these documents will be handled in a constructive way and not "for the sake of vengeance and revenge." [5]

In describing what it called "the curse of the Iraqi vouchers," the London Arabic-language daily Al-Hayat said that it expects more names and details to be made public in the near future and anticipates the revelation of a scandal of vast dimensions transcending countries and continents, implicating many prominent individuals and organizations. [6]

How It Worked: The Voucher Transactions Method

In a subsequent article, Al-Mada provides details on the allocation and sale of oil vouchers. In general, the vouchers were given either as gifts or as payment for goods imported into Iraq in violation of the U.N. sanctions. The voucher holder would normally tender the voucher to any one of the specialized companies operating in the United Arab Emirates for a commission which initially ranged from $0.25 to $0.30 per barrel, though it may have declined in later years to as little as $0.10 or even $0.05 per barrel because of oil surplus on the market. [7] In other words, a voucher for 1 million barrels would have translated into a quick profit of $250,000-300,000 on the high side and $50,000-100,000 on the low side – all paid in cash. According to Al-Mada, Jordan will seek to tax the illicit profits of citizens who benefited from the sale of the vouchers.

One of the common arguments by recipients of vouchers was that the vouchers paid for goods provided in the framework of the U.N.-administered Oil for Food program. However, under the Memorandum of Understanding governing the program, oil allocations were intended for "end users," meaning those with refineries. Most of the voucher recipients would be considered "non-end users." Moreover, if vouchers were used to pay for goods, it would suggest that these were not authorized by the program and should be considered illicit since all contracts approved by the U.N. were reimbursed from the trust account where the oil revenues were kept, at a French bank, at Iraq's insistence. According to the United Nations: "The oil buyer had to pay the price approved by the Security Council Sanctions Committee into a U.N. escrow account, and the U.N. had to verify that the goods purchased by Iraq were indeed those allowed under the program. But the U.N. had no way of knowing what other transactions might be going on directly between the Iraqi government and the buyers and sellers." [8]

This report reviews the Saddam oil vouchers affair, in two parts:

Part I: (A) the list of oil vouchers recipients; and (B) reactions by implicated individuals and organizations.

Part II: Arab media reactions.

The Saddam Oil Vouchers Affair, Part I:

A. Complete List of Recipients of Oil Vouchers (in alphabetical order by country)

(All numbers for barrels of oil unless indicated otherwise)

All names on the list were transliterated from the Arabic. Although every effort was made to be precise, some inaccuracy is inevitable.

B. Reactions of Implicated Individuals and Organizations

It is hardly surprising that most of those interviewed or those who reacted otherwise denied receiving such vouchers or claimed that the vouchers were received in the framework of the Oil for Food program. This latter argument is somewhat disingenuous because legitimate suppliers of goods and services under the program were paid from a trust account administered by the United Nations, and with vouchers from Saddam. Some may have made statements to newspapers not readily available to MEMRI, and others may have opted to remain silent.

Algeria

Abd Al-Majid Al-Attar, a formerdirector-general of the Algerian national oil company SONATRAC (6 million barrels) wrote a long rebuttal in the London daily Al-Hayatstating that the 6 million barrels were marketed by Algerian companies. According to him, the profits were used for humanitarian assistance to the Iraqi people. Al-Attar likes to remind the reader "that every airplane [carrying assistance] which landed in Baghdad cost hundreds of thousands of dollars without getting involved in details" [emphasis added]. [9] Radio Algiers announced that the state would investigate allegations of corruption. [10]

Bahrain

Ali Al-Muslim (3 million barrels) said he had visited Iraq 22 times before the war but his trips were primarily "humanitarian," and that he had sent food and cleaning materials within the framework of the Oil for Food program. As a sign of appreciation, the regime offered Al-Muslim the opportunity to sell, as a broker, 3 million barrels. Al-Muslim ran into difficulties selling the vouchers and hence he withdrew from the deal.

Hassan Al-Darazi, the son of businessman Kadhem Al-Darazi (2 million barrels), said his father had made a pilgrimage to Mecca but that all his activities were "purely commercial." [11]

Bulgaria

The Socialist Party of Bulgaria (12 million). President Georgi Parvanov, head of the Socialist Party, characterized the allegation as "ill-advised black humor," but ordered an inquiry into the accusation. [12] President Parvanov also met with the U.S. Ambassador in Sofia and sought his help to clarify the facts regarding the list. [13]

Canada

Arthur Millholland, CEO of the Calgary-based Oilexco(9.6 million barrels), denied he had received vouchers and criticized MEMRI, which he claimed "was critical of the recent U.S.-led war with Iraq and participated in the UN's Oil for Food program to help Iraqi children [sic]." "Obviously," he hinted, MEMRI "has some motives." [14]

Egypt

Abd Al-Adhim Manaf (6 million barrels), the owner and editor of The Voice of the Arabs (Sawt Al-Arab), and a member of parliament, offered to show evidence that he had been offered oil vouchers, but had refused them. [15]

Muhammad Shatta (14 million barrels) maintained that he served as an agent for two international petroleum companies and that all his transactions were under the Oil for Food Program. He said there was small-scale smuggling of oil of 3000 barrels at a time by small merchants, but did not explain how the smuggling was related to the vouchers he received.

Khaled Abd Al-Nasser, the son of the late Egyptian president Gamal Abd Al-Nasser, (16.5 million barrels), could not be reached by the Egyptian weekly Roz Al-Youssef because all his phones "were out of order." However, the weekly cites a number of instances of Abd Al-Nasser's involvement in activities for solidarity with Iraq.

Egyptian MP Imad Al-Gilda (14 million barrels) denied receiving any vouchers. Roz Al-Youssefreported that there were rumors before the war that Al-Gilda was "part of the Iraqi propaganda machine."

Mahmoud Mahdi Al-Ma'sarawi (7 million barrels) attributes the inclusion of his and other names on the list to their stand against U.S. actions in Iraq.

Muhammad Hilmi (4.5 million barrels), who named his son Saddam, said he would be proud if his son would be another Saddam Hussein. [16] Otherwise, he denied the allegation.

It is noteworthy that Egyptian activist Mamdouh El-Sheikh filed suit in May 2003 against several Egyptian politicians and journalists, accusing them of accepting bribes from Saddam which violated Egyptian law. [17]

France

Former interior minister Charles Pasqua, (12 million barrels ) denied any involvement and suggested another, unnamed former French interior minister may have been the beneficiary. [18] According to The New York Post Mr. Pasqua, "a close friend and former colleague of Chirac … fought to allow visits by top Iraqi officials to France in 1993." [19]

Trafigura Patrick Maugein, CEO of the oil firm SOCO International (25 million barrels), was quoted as saying that he did a lot of business in Iraq under the Oil for Food program, "but none of it was illegal." [20] It was mentioned that the 55-year old businessman "appears to wield [influence] with President Jacques Chirac." [21]

Jean-Bernard Merimee, (3 million and another 8 million barrels) was the French Ambassador to the United Nations and France's representative in the Security Council.

Michel Grimard, (17 million barrels) is the founder of the French-Iraqi Export Club.

Gilles Munier, secretary general of the Franco-Iraqi Friendship Association, said his organization introduced numerous businesses, oil and otherwise, to contracts in Iraq, but that it was all perfectly legal. For each successful introduction, he said he "received a commission." [22]

Hungary

Hungarian Interest Party (MEP). Quoting from the Hungarian daily Nepszabadsag, the MEP was established by Izabella Kiraly B. in the fall of 1993 after her expulsion from the Hungarian Democratic Party. Ms. Kiraly refused to talk to the Hungarian newspaper but her website includes slogans such as: "Hands off Iraq!" "Peace Instead of War," and "America! Leave the World Alone in Peace!" On her site, President Bush in a Nazi uniform with the U.S. flag in hand repeats a famous statement by Hitler: "One People, One Empire, One Ruler" (ein Volk, ein Reich, ein Fuehrer). [23]

Indonesia

President Megawati Sukarnoputri (2 million as "daughter of President Sukarno" plus 8 million barrels under her own name). A spokesman told the Australian Broadcasting Corporation that President Megawati was "aware of the allegations." [24]

People's Consultative Assembly speaker Muhammad Amin Rayyis (4 million barrels) did not respond to the Australian Broadcasting Corporation.

Italy

Roberto Formigoni (24.5 million) is the president of Lombardia.

Father Benjamin (4.5 million barrels) is a French Catholic priest who arranged a meeting between the Pope and Tariq Aziz, Iraq's former deputy prime minister. [25]

Salvatore Nicotra (20 million) is a former NATO pilot who became an oil merchant.

Jordan

Leith Shbeilat (15.5 million barrels) is an Islamist with a pro-Saddam record. He stressed that the United Nations system was so stringent that it would not have allowed anyone to play with oil contracts and that the publication of the list was intended "to slander those who were defending the Iraqi people." [26] Ironically, he served as the chairman of the anti-corruption committee of the Jordanian parliament. [27]

Fawwaz Zureiqat (6 million barrels) whose name was linked with the British MP George Galloway (see United Kingdom) said that the accusations are silly. He said that he had earned a commission of five cents per barrel, which had not been paid by the Iraqi government.

Tojan Faisal, a member of parliament (3 million barrels), said she acted to help a friend in need. She identified him as Abd Al-Rahman Al-Qatarna. [28]

Fakhri Qi'war (6 million barrels) is a former Jordanian MP and a journalist. He said the list "has no basis in truth and we do not know its reasons." He added that the accusation "is an attempt to slander those who stand against the American occupation of Iraq and stand with the Iraqi resistance and the Iraqi brethren and cooperate and support them." [29]

Wamidh Hussein (Majali) (1 million barrels) denied receiving oil. He said: "I was a member of the Popular Jordanian Committee for Solidarity with Iraq, and provided medicines. We paid for it from our own pockets." [30]

In response to a parliamentary question, Deputy Prime Minister Muhammad Al-Halaiqa said: "The issue is under follow-up, and we are seeking to verify whether some people have acquired [Iraqi] graft." [31]

Lebanon

Emil Emil Lahoud (4.5 million barrels) is a Lebanese MP and the son of Lebanese President Emil Lahoud. In an interview with the London daily Al-Sharq Al-Awsat, Lahoud maintained that his inclusion on the list was aimed at undermining the position taken by his father which "supports the [Palestinian] resistance, stands by Syria, rejects the occupation of Iraq, and demands the liberation of all the Palestinian lands." [32]

Osama Ma'rouf (3 million barrels), another MP and head of the Nasserite Popular Organization, admitted receiving a voucher to sell oil for commission. However, he added that the voucher had cost Iraq nothing and that he had in any event never exercised the option. [33]

Najah Wakim (3 million barrels), a former MP, denied the allegation, maintaining that Al-Mada editor Fakhri Kareem said on television, without specifying time or venue, that he received the list from the CIA without supporting evidence. [34] Kareem told the Lebanese daily Al-Nahar that he had never spoken with Wakim. [35]

Libya

Shukri Ghanem (6 million barrels) is the Libyan prime minister.

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Morocco

Muhammad Al-Basri (4.5 million barrels) who has since died, was a former Moroccan Socialist leader. [36]

Panama

One surprise on the list was Mr. [Benon] Sevan (11.5 million barrels) who is the Executive Director of the Oil for Food program. A U.N. spokeswoman denied the charges and said that the U.N. secretary-general was completely satisfied with Sevan's integrity. [37] Mr. Sevan denied the allegations and stated that "it was incumbent on those who published these allegations to provide the necessary documents." [38]

Qatar

Abd Al-Aziz Mubarak Al-Duleimi (4 million barrels) said he had contracts to sell 10 million barrels as a broker under the U.N. supervision and had nothing to do with Saddam's coupons or bribes. [39]

Romania

Two entities are listed under Romania: Delf Aderlink ( 1 million barrels) and the Romanian Labor Party ( 5.5 million barrels). The following is a slightly edited version of an email to MEMRI from a Romanian journalist:

"The owner of Bulf Drilling, Cornel Bulf, is a pretty well known Romanian businessman, deeply involved in oil business. He has a lot of privileged businesses with the state-owned oil company Petrom. He claimed that all the Iraqi oil that he sold was with U.N. permission – and he showed me some approvals in this regard. Nevertheless, I take into consideration that he could have traded Iraqi oil both with and without approval, and that U.N. approvals were meant to cover his illicit trade.

"The son of the president of Labor Party, Ioan Cristian Nicolae, in connection with some politicians, has just bought a huge building in Bucharest for $1.5 million." [40]

Russia

Russia, which received the greatest number of oil vouchers, has said nothing.

Nikolay Ryzhkov (13 million barrels) was a U.S.S.R. prime minister.

South Africa

Tokyo Saxwele Mvelaphanda Holdings (MVL) reacted angrily to its inclusion in the list, but has not denied buying oil under the Oil for Food program. [41]

Spain

Ali Balutt or Balout (8.8 million barrels) is a Lebanese journalist. [42]

Switzerland

Glencore (12 million barrels) is the largest commodity trader in Switzerland.

Petrogas (5 million barrels) is listed in Switzerland under three sub-companies – Petrogas Services, Petrogas Distribution, and Petrogas Resources – and is associated with the Russian company Rosneftegazetroy (35.5 million barrels).

Syria

Hamida Na'na (over 9 million barrels) is the owner of Al-Wifaq Al-Arabi and the author of a biography of former Iraqi deputy prime minister Tariq Aziz. She is currently writing a biography of Iraqi general Ali Hassan al-Majid, known as Chemical Ali. [43]

Farras Mustafa Tlass (6 million barrels) is the son of Mustafa Tlass, Syrian Defense Minister and one of the pillars of the Syrian Ba'ath party. He said his company had bought oil from Iraq under the Oil for Food program and denied receiving any oil outside the framework of that agreement. [44]

United Kingdom

1. There is a reference on the margin of the list to "a Mr. Burhan Al-Chelebi" and "Fortrum and Gas-Oy," a Finnish purchasing company, in an agreement on December 29, 1999. There is also another reference to former MP George Galloway, as beneficiary of 3 million barrels.
2. There is another reference to George Galloway's receiving 4 million barrels, through Jordanian Fawwaz Zureiqat, of Aredio Petroleum, in an agreement on July 10, 2001.
3. Similarly, Middle East Advance Semi-Conductor, a Jordanian company, referred to Galloway as receiving 3 million barrels in an agreement on June 8, 2001, also via Mr. Fawwaz Zureiqat.
4. Similarly, March 5, 2001 - 2 million barrels
5. Similarly, December 12, 2002 - 3 million barrels
6. Similarly, June 3, 2002 - 3 million barrels

Thus, "George Galloway as beneficiary is cited six times, twice in the name of Finnish and French companies and the rest Jordanian under the name of Fawwaz Zureiqat. All these requests were approved by the minister of oil, with his signature." [45]

When asked by ABC News about being on the list, Galloway replied: "Not one brass farthing. I've never seen a barrel of oil, owned one, bought one." [46]

The Mujahideen Khalq (36.5) is an organization which opposes the Iranian regime which had operated from within Iraq under the Saddam regime. The United States has classified it as a terrorist organization and it has recently been ordered to leave Iraq.

United States

Shaker Al-Khaffaji (7 million barrels) advanced $400,000 to Scott Ritter, former U.N. weapons inspector in Iraq. Ritter produced a documentary purporting to tell the true story of the weapons inspections, which in his telling were corrupted by sinister U.S. manipulation. [47]

Samir Vincent (10.5 million barrels): In 2000, Vincent, an Iraqi-born American who lived in the U.S. since 1958, organized a delegation of Iraqi religious leaders to the U.S., which met with former president Jimmy Carter.

The Saddam Oil Vouchers Affair, Part II: Arab Media Reactions

Arab Media Ignore the List

In an op-ed titled "Beautiful Masks over Ugly Faces" in the London daily Al-Hayat, Salama Na'mat criticizes Arab television and other media for showing little interest in the oil voucher scandal. Because releasing the list shows Saddam Hussein's bribery of hundreds of politicians and journalists from 50 Arab and foreign countries, the Arab media have neither pursued the issue nor investigated the matter. In fact, Na'mat says, the publication of the list has triggered even less interest in official circles than in the media. Na'mat continues:

"The reality is that some Arab governments perhaps do not object that politicians and media people benefit from Saddam's bribes either because they are also involved or see no harm in bribes since it is a normal practice by the Arab regimes in varying degrees. Perhaps the political agenda of the deposed Iraqi regime was [no different] than the agendas of these governments. It mattered not to those who were bribed and those who shut their eyes that the money they received from the deposed regime to sing its praise were taken away from the Iraqi people which was destroyed by Saddam's wars and his stupid policies. [48]

Ahmad Al-Rab'i, a columnist in the London daily Al-Sharq Al-Awsat, points out that much of the Arab press, with the exception of the Iraqi, Jordanian, and Lebanese press, has not dared to publish the lists because they included powerful political figures. The Iraqi and Kuwaiti press, in particular, have reason to do so because they have been making the point that Saddam's defenders were not driven by nationalist or Islamic principles, but were paid off. [49]

An op-ed by Mazen Hammad in the Qatari daily Al-Watanunder the title "Publish the Names, May Allah Have Mercy on You!" wrote:

"The scandal is growing, and its threads, hour after hour, are encircling the necks of many who allege pan-Arabism and nationalism as well as those traders of opportunities. While it is too early to point an accusing finger at anyone in particular, those who have 'received' from the Saddam regime, in both Arab and non-Arab countries, for aggrandizing and defending him, count in the hundreds, if not more.

"The scandal is growing because among the names are heads of political parties, parliamentarians and the children of heads of states and governments.

"The scandal is growing because it is no secret that hundreds of apartments, Mercedes automobiles, cash and various grants were distributed by Saddam's aides to ministers, under secretaries, journalists, writers and artists.

"… It is also important that no one be excluded [from punishment] if his name appeared on the list regardless of the amount of his influence and the level of his position…

"[The scandal] is a flagrant example of the duality of the life of the Arab politician: he lectures nationalism during the day and nurses oil at night." [50]

'Once Again, the Citizens Pay'

Writing in the Kuwaiti daily Al-Siyassa, columnist Shaker Al-Nabulsi says: "At the outset, it appears that the list … is valid and the evidence is that some of those whose names where mentioned have not denied it." Al-Nabulsi's column focuses on Jordanian Islamist Leith Shbeilat, one of the biggest beneficiaries of Saddam's oil vouchers and one of the most vocal supporters of the Saddam regime in its heyday. Al-Nabulsi expresses his astonishment at the relationship between an Islamist who advocates an Islamic state run according to Shari'a law and the secular regime of Saddam which despised the clerics and killed and tortured many of them. [51]

Jubran Tweiny, the editor of the Lebanese daily Al-Nahar, wrote: "Once again, the country [Lebanon] and the citizens pay for the involvement of some officials in financial scandals and money laundering and oil 'vouchers,' the payment of bribes … without the authorities trying to put an end to them.

"It is incumbent on the state to respond clearly and forcefully to the sources of the news and prove the innocence of all those who were accused of receiving money from Saddam or smuggled money from the former Iraqi regime against commission." [52]

In the Kuwaiti daily Al-Siyassa,in an article titled "The Barrels of the Ba'ath," Daoud Al-Basri writes that the voucher scandal was not so much about the millions of barrels of oil given to "the militants and their international partners" as "a scandal for the international and Arab conscience and the environment of silence and deceit which accompanied all the stages of bribing…" He continued: "We will not forget the bribing of those who forged contemporary Iraqi history and those who made Saddam the anticipated Messiah of the Ba'ath." [53]

Al-Sharq Al-Awsat columnist Samir Attallah wrote in 'The Mother of [All] Vouchers:' "[What is really repulsive] is the language of the total purchase [of supporters] or total hatred … [the regime] needed people who hate what it hated and offended what it offended… What interests me about the vouchers and the Oil for Food [program] … are the wailings of the former president displaying pictures of children dying from hunger and disease … and the million and one stories about the poverty and neediness that transformed Iraq from a rich country to a country celebrating the birthday of a president who basks in his presidential palaces amidst poverty, silence, oppression, and the processions of the dead." [54]

Pro-Saddam Al-Quds Al-Arabi: The List is Only Alleged; Kill the Messenger

In the pro-Saddam London daily Al-Quds Al-Arabi, the paper's Baghdad correspondent writes about "the alleged oil list:"

"The publication of the list by the newspaper Al-Mada … did not draw much attention in Iraq because Iraqis were already familiar with this fact. Many Iraqis and particularly those involved in the oil trade business…were aware that the regime was selling quantities of its oil to oil companies and individuals with which it was associated or had good relations to circumvent the UN sanctions which controlled Iraq for 13 years. The policy of the old regime was to support anyone who stood by it or was trying to export goods to Iraq outside the sanctions." [55]

In another report from its correspondent in Amman, Jordan, Al-Quds Al-Arabi tried to divert attention towards the purported source of the list (according to him, this source was Iraqi Governing Council member and Iraqi National Congress head Ahmad Chalabi) and to smear him:

"The lighting of fire recently under the vouchers by the central figures of the Iraqi National Congress against Jordanian intellectuals and journalists is nothing new for the Jordanian government, or for the intellectuals themselves whom the new rulers of Iraq are trying to 'hit.'" [56]

Al-Jazeera: Faisal Al-Qassim's Hidden Pro-Saddam Agenda

Faisal al Qassim, host of the popular Opposite Direction program on Qatari Al-Jazeera satellite television, chose to attack, on his program devoted to the vouchers affair, not the beneficiaries but their critics. He said:

"Do these bribed, swindlers and the traders of homelands have the right to discuss honesty? Aren't the records of many of them blotted with bribes, swindling and fraud? How many millions did the previous Iraqi opposition receive from the Central Intelligence Agency?

"Can those who sold Iraq wholesale to the occupier open the files of corruption and the purchase of consciences…? It is true that the deposed regime wasted millions to buy friends and supporters, but haven't the newcomers handed Iraqi oil in its entirety to the American occupier? [57]

On February 17, 2004, the London Arabic-language daily Al-Hayatpublished Iraqi intelligence documents released by the Iraqi daily Al-Mu'tamar, the organ of the Iraqi National Congress, linking Faisal Al-Qassim to Iraqi intelligence. [58]

'They Must Be Published Morally'

Dr. Abd Al-Ghani Mahmoud, head of theinternational law department at Egypt's Al-Azhar University, provided a fitting epilogue to this affair. Dr. Mahmoud told the Egyptian weekly Roz Al-Youssef:

"Those who have the instruments to influence their peoples – intellectuals, politicians, political parties or institutions – have become in some of these countries propaganda mouthpieces for a corrupt dictatorial regime which has dragged the whole region into oblivion. This problem calls for a firm stand. Those who collected money from this regime, which destroyed its people with chemical weapons while enjoying a life of luxury in palaces during the sanctions, are partners in wronging the [Iraqi] people through their silence about the corruption… They must be punished morally by publishing their names and what they have received, so they will serve as an example for others." [59]

* Nimrod Raphaeli is a Senior Analyst at MEMRI.