report on programme manipulation - Independent Inquiry Committee

INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME
REPORT ON PROGRAMME MANIPULATION
CHAPTER TWO
OIL TRANSACTIONS AND ILLICIT PAYMENTS
wire transferred $1,092,345 to the account of Al Wasel & Babel at the Commercial Bank. Al
Wasel & Babel wrote to SOMO acknowledging receipt of the surcharge. Ministry of Oil records
show that, on August 27, 2001, this exact amount was deposited into the SOMO account in two
payments ($624,906 and $467,439). 239
C. TAURUS
The Taurus Group (“Taurus”), an oil trading consortium based in Europe and the Caribbean,
financed the purchase of at least 256 million barrels of oil sold under the Programme. 240 Taurus
never received a single oil allocation in its own name. Nor did Taurus enter into a single United
Nations contract to purchase Iraqi oil. But like Bayoil, Taurus entities financed letters of credit
and arranged for the loading and resale of oil under the contracts of other companies. Taurus
purchased much of its Iraqi oil from Russian contracting companies. Taurus also used Aredio
Petroleum S.A.R.L. (“Aredio”), a French-based company, to purchase oil allocated in the names
of individual beneficiaries. Eventually, Taurus began using two front companies created in
Liechtenstein—Fenar Petroleum Ltd. (“Fenar”) and Alcon Petroleum Ltd. (“Alcon”)—to trade
Iraqi crude oil.
During the Phase IX exporting crisis, Taurus managed to purchase 14 percent of the Iraqi crude
oil sold in that phase through Alcon and Fenar. 241 Taurus continued using these companies to
purchase significant amounts of oil in other surcharge phases as well. Most of the surcharges
assessed on the Alcon and Fenar contracts were paid by wire transfers from two bank accounts in
the names of Petrocorp AVV (“Petrocorp”) and Jabal Petroleum SAL (“Jabal”). Most of the
funds covering the transfers were deposited in these two bank accounts by Taurus, Alcon, and
Fenar. Additionally, when surcharges were first introduced, Taurus covered surcharges imposed
239 SOMO sales contract, nos. M/09/126 (May 14, 2001), M/10/14 (July 12, 2001); Committee oil company
and financier tables, contract nos. M/09/126, M/10/14; Augusto Giangrandi interviews (Apr. 25 and 27-28,
2005); Merrill Lynch (Suisse) S.A. record, Italtech account (under the name of ‘Mantova’), credit advice
(Aug. 10, 2001), bank statement (Sept. 28, 2001), and debit advice (Aug. 24, 2001); Augusto Giangrandi
letter to Merrill Lynch (Suisse) S.A. (Aug. 21, 2001) (requesting transfer of $1,092,345 to Al Wasel &
Babel); Abdullah Lootah letter to Augusto Giangrandi (Aug. 27, 2001) (confirming receipt of $1,092,345);
Al Wasel & Babel letter to SOMO (Aug. 27, 2001).
240 Committee oil financier table, contract nos. M/04/01, M/04/19, M/04/21, M/04/37, M/05/11, M/05/12,
M/05/25, M/05/45, M/05/66, M/06/15, M/06/18, M/06/21, M/06/56, M/06/69, M/06/73, M/07/07, M/07/14,
M/07/20, M/07/24, M/07/40, M/07/81, M/07/95, M/08/02, M/08/35, M/08/37, M/08/38, M/08/47, M/08/55,
M/08/56, M/08/65, M/08/67, M/08/82, M/08/86, M/08/102, M/09/01, M/09/04, M/09/17, M/09/23,
M/09/25, M/09/35, M/09/38, M/09/47, M/09/64 M/09/115, M/09/118, M/10/03, M/10/07, M/10/09,
M/10/17, M/10/33, M/10/38, M/10/59, M/10/71, M/10/80, M/10/82, M/10/84, M/10/86, M/10/87, M/10/94,
M/10/96, M/11/10, M/11/21, M/11/43, M/11/61, M/11/65, M/11/67, M/11/80, M/11/115, M/11/118,
M/12/05, M/12/14, M/12/29, M/12/35, M/12/39, M/12/51, M/12/63, M/12/120, M/12/122, M/13/07,
M/13/17, M/13/19, M/13/48, M/13/75.
241 Committee oil financier table, contract nos. M/09/01, M/09/04, M/09/35.
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