Oil Vouchers

Feb. 26 - I have been engrossed in the following MEMRI document Inquiry and Analysis Series - No. 164 - The Saddam Oil Vouchers Affair (courtesy of reader Sandy) during my few breaks these past couple of days.

Although MEMRI doesn't pass judgement as to the veracity of the report published in al-Mada, they seem to be taking the accusations very seriously and include in their report the reactions of those named as taking bribes, those who have refused comment, and what the countries of those charged with accepting the bribes are planning to do.

Another significant fact is that the list was originally in the possession of the State Oil Marketing Organization (SOMO) and the Iraqi Ministry of Petroleum is collecting information with the intent of submitting it to Interpol who can investigate the affair further. The MEMRI document details how Al-Mada stated that the oil voucher program worked:

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]

The real eye opener, however, lies in the list of recipients in the Oil Vouchers Program and the large number of Russians implicated in the affair, 46, compared to France, which had 11.

There are 14 recipients listed from Jordan, and as was noted in the above, al-Mada says that the Jordanian government has announced its intention of taxing the illicit profits of citizens who benefited from the sale of the vouchers. They, at least, seem to believe the allegations.

The document also cites the reactions of the other governments which, predictably vary from silence to explanations to intentions to investigate.

The Arab media has not paid too much attention to the list perhaps because prominent names are on the list and freedom of the press in the Mid-East is not guaranteed, although the Lebanese, Jordanian and Iraqi press have published the list.

Shortly after the fall of Baghdad, rumours were circulating around the blogs about bribes to Arabic news agencies, particularly al Jazeera which many of us noted but, as many of these rumours were unattributed, couldn't give much weight to.

The reaction of one person, however, contains echoes of the allegations made nearly a year ago. Mazen Hammad wrote an op-ed for the Qatari daily Al-Watanunder titled "Publish the Names, May Allah Have Mercy on You!" in which he charged:

"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.

Obviously I recommend you read the whole thing.

I suspect that people will be inclined to believe or disbelieve the allegations according to their own bias, but if Interpol does investigate will that settle the question?

Posted by: Debbye at 07:33 PM | No Comments | Add Comment
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