U.N. Diplomat Reportedly Sought Iraqi Oil Deals for Egyptian
The New York Times
February 4, 2005
By SUSAN SACHS
Benon V. Sevan, a career United Nations diplomat who headed the
oil-for-food program for Iraq, solicited favors from Saddam Hussein’s
government on behalf of an Egyptian trader who made more than $1.5
million in profits from his privileged access to Iraqi oil contracts,
according to an investigative report released yesterday.
The trader, Fakhry Abdelnour, who is based in Geneva, also paid an
illegal surcharge of $160,000 to the Iraqis, in violation of the
United Nations sanctions against Iraq, while he and Mr. Sevan were
lobbying for more business, said the report, which was issued by a
United Nations-appointed panel headed by Paul A. Volcker.
In securing the oil contracts for Mr. Abdelnour, Mr. Sevan introduced
him into one of the byways of the giant program, one that enriched a
small group of traders while pouring money that was meant to buy food
and medicine into secret Iraqi slush funds, it said.
Through the intercession of Mr. Sevan, the report said, Mr. Abdelnour
was put on a list of individuals who received coupons, or allocations,
that gave him the right to buy millions of barrels of Iraqi crude oil,
starting in 1998.
The allocations were of little use to people who were not in the oil
business and did not have the means, or desire, to lease tankers to
ship the oil to refineries and other users. But they were valuable to
Mr. Abdelnour, as the profits on his dealings with Iraq demonstrated.
Oil companies were hungry for Iraqi crude oil, especially in the early
years of the oil-for-food program when prices for Iraqi oil were below
world market prices. But Iraq did not sell oil to just anyone.
Under the guidance of Taha Yassin Ramadan, an Iraqi vice president,
and the Revolutionary Command Council, headed by Mr. Hussein, a large
portion of the oil allocations were handed out to a select group that
included businessmen, politicians, journalists and diplomats who were
perceived to be sympathetic to Iraq. According to traders and Iraqi
officials, many people who received allocations sold them to an oil
company at a premium.
Mr. Abdelnour did the same, the report said, selling his first
allocation of 1.8 million barrels in the fall of 1998 to two oil
companies for a $300,000 profit and selling another 5.5 million
barrels for a $1.2 million profit over the next three years.
His company stopped buying oil in late 2000, the report added, after
Iraq started demanding that oil buyers pay under-the-table surcharges
on each barrel of oil they received. Many other traders in Mr.
Abdelnour’s situation have said they also pulled out around the same
time because paying the surcharges meant that they could not make as
much profit from selling their allocations as they previously had
done.
By telling senior Iraqi officials like Mr. Ramadan that he wanted to
“help a friend” get into the business of buying their oil, Mr. Sevan,
played an important role, the investigators said.
“At that time in the program, it was highly unlikely that Iraq would
sell oil to a company such as AMEP unless sponsored by a beneficiary
that Iraqi officials wished to favor,” the report said, referring to
Mr. Abdelnour’s oil-trading company, African Middle East Petroleum.
Senior Iraqi officials, the report added, were pleased with the chance
to do Mr. Sevan a favor.
“He was a man of influence,” the former Iraqi oil minister, Amir
Muhammed Rashid, told investigators, and the government hoped, in vain
as it turned out, that he had the power to speed up United Nations
approval for Iraq to acquire spare parts for its oil industry.
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