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
and Mr. Pollner frequently discussed the distribution of Iraqi oil with each other and with other
traders in the oil industry. 243
Mr. Pollner’s closest associate in Programme-related activities was Mr. Schenker, who joined the
Taurus Group in 1994. Mr. Schenker has been described as the Director of Finance and
Administration of Taurus and “a close personal friend” of Mr. Pollner. He was, along with Mr.
Pollner, the other individual signatory to Taurus Nassau’s and Taurus Nevis’s accounts in Swiss
banks, and he had power of attorney over Taurus Nassau. 244 In February 1999, Mr. Schenker,
along with a French national, Jean-Loup Michel, formed Aredio to acquire oil sold through the
Programme. 245
2. Taurus Surcharge Payments on Three Russian Contracts
Between Phases IV and XIII, Taurus purchased over 106 million barrels of oil under contracts
with Russian companies. It financed at least 92 letters of credit for seven companies, namely
Machinoimport, Neftegazexport, Rosneftegazexport, Rosnefteimpex, Sidanco, Zangas,
Zarnestservice, and Zarubezhneft. When the Government of Iraq initially demanded surcharges
in the autumn of 2000, Taurus was involved in oil transactions with Zangas, Zarubezhneft, and
Machinoimport. In the middle of Phase VIII, surcharges were imposed on the oil lifted by Taurus
under these contracts. 246
243 Stasby/Wilson, Petroleum Suppliers: Americas (Apr. 1992, 28 ed.), p. B41 (noting Ben Pollner as
Senior Vice-President of Bayoil (U.S.A.) Inc.); Augusto Giangrandi interviews (Apr. 25-28, 2005); Michel
Tellings interview (Oct. 14, 2004); ING Bank Geneva record, Taurus Nevis account, “Background of the
Company” (June 23, 2004).
244 Credit Suisse Geneva record, Phillippe Renevey memorandum to Bernhard Lippuner (May 5, 2004)
(noting Martin Schenker as “CFO” of Taurus); Martin Schenker letter to Switzerland Observer Mission
(May 6, 1998) (noting Martin Schenker as “Director of Finances and Administration, Taurus S.A.”); Credit
Suisse Geneva record, Taurus Nassau account, power of attorney (Aug. 14, 1998); BNP record, Aredio
account, account administration documents (May 1999 to Jan. 2002). Mr. Renevey and Mr. Lippuner are
both officers of Credit Suisse Geneva. Credit Suisse Geneva record, Phillippe Renevey memorandum to
Bernhard Lippuner (May 5, 2004).
245 BNP Geneva record, Aredio account, articles of incorporation (Feb. 19, 1999) (reflecting that Mr.
Michel controlled just over 50 percent of Aredio’s shares, with the remainder controlled by Mr. Schenker).
Opening documents for Aredio’s account at BNP Geneva noted that Mr. Michel, like Mr. Schenker, was a
close friend of Mr. Pollner. In a letter appended to opening documentation for Aredio’s account at UEB
Geneva, two bank officers noted that Mr. Schenker had, “for personal reasons,” not wanted his name to
appear on a form identifying the beneficial owner of Aredio. BNP Geneva record, Aredio account, account
opening documents, “Annexe au formalaire ‘A’” (May 7, 1999) (translated from French).
246 Committee oil financier table, contract nos. M/04/19, M/05/11, M/06/21, M/07/20, M/08/37, M/12/51,
M/13/17, M/10/07, M/11/21, M/12/05, M/09/25, M/04/37, M/06/56, M/04/21, M/05/25, M/06/15, M/07/14,
M/08/38, M/12/29, M/04/01, M/05/12, M/06/18, M/07/07, M/07/81, M/08/02, M/08/82, M/08/86,
M/11/115); Committee oil company table, contract nos. M/08/37, M/12/51, M/10/07, M/11/21, M/12/05,
M/08/38, M/12/29, M/08/02, M/08/86, M/11/115.
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