U.S. and Key Allies Facilitated Profiteering in Oil For Food Program

UN Secretary General Koffi Annan created the inquiry in April 2004. Under Oil-for-Food, the Iraqi government was allowed to sell oil for funds it could use to purchase humanitarian goods. Devastated by crippling US-led sanctions, most Iraqis depended on the program for survival. It ran from 1996 until 2003.

The inquiry found the Saddam Hussein regime collected $1.8 billion dollars in kickbacks and surcharges from oil sales to over 2,000 companies. The companies include major global firms such as DaimlerChrysler, Siemens, and Volvo. It also says oil sales were used to influence beneficiaries to express public opposition to the US led sanctions on Iraq. The $1.8 billion dollar figure amounts to less than 3% of the $64 billion dollar program, but has received a great deal of attention from UN critics in the mainstream media and both political parties. These critics say the kickbacks and surcharges show the UN is plagued by endemic corruption and has been negligent in dealing with the Hussein regime. The inquiry was headed by Paul Volcker, former chair of the Federal Reserve.

While much of the focus has remained on the UN failure to monitor kickbacks and bribes, little attention has been paid to another of the investigation’s main conclusions. The Volcker inquiry found Hussein was able to make almost $11 billion dollars off of selling oil smuggled through Jordan and Turkey. A Senate investigation in May found the Bush administration was made aware of the smuggling but did nothing to stop it. Jordan and Turkey are key U.S. allies in the Middle East.

Fifty-two percent of the kickbacks collected by the Saddam Hussein regime came through U.S. oil purchases. The Senate investigation’s report said, "The United States was not only aware of Iraqi oil sales which violated UN sanctions and provided the bulk of the illicit money Saddam Hussein obtained from circumventing UN sanctions. On occasion, the United States actually facilitated the illicit oil sales.”

* Denis Halliday, former head of the UN Humanitarian Program in Iraq and a former UN Assistant Secretary General. In 1998, he resigned his post in protest of the US-led sanctions against Iraq.

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