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
reflect that this wire transfer from Taurus was used to satisfy Zarubezhneft’s surcharge
obligations under contract M/08/02. 250
Finally, in Phase VIII, Machinoimport entered into a contract to purchase approximately seven
million barrels of oil. Taurus Nassau financed at least four of the six letters of credit issued in
connection with this contract. Surcharges were levied on two of these four Taurus-financed
liftings in amounts of $130,000 and $161,985, respectively. As it had with the Zangas and
Zarubezhneft contracts, Taurus Nassau paid the surcharges on these liftings directly to SOMO.
On October 16, 2000, one day before one of the two liftings occurred, Taurus issued a wire
transfer in the amount of $130,000 to a SOMO account at Fransabank. Ministry of Oil records
show that the wire transfer was applied as a surcharge payment on contract M/08/37. On October
25, 2000, Taurus transferred $160,000 to a SOMO account to cover the surcharge imposed on the
second lifting. As with the Zangas surcharge payment, the wire transfers to the SOMO account
did not identify Taurus’s name and included information that the transfers were for “loading
fees.” 251
3. Taurus and the Creation of Alcon and Fenar
In 1999 and again in 2000, Mr. Schenker hired ReviTrust, a Liechtenstein financial services firm,
to form two companies: Fenar and Alcon. Fenar was incorporated on June 15, 1999. Mr.
Schenker directed ReviTrust to name Musbah Ladki as the beneficial owner of Fenar. 252 The
250 SOMO sales contract, no. M/08/02 (June 21, 2000) (contracting with Zarubezhneft); Committee oil
surcharge table, contract no. M/08/02 (noting surcharges of $200,000 paid to Fransabank by “Taurus
Petroleum”); Records of SOMO surcharge invoices (Nov. 4 and 16, 2000) (translated from Arabic)
(showing $96,302 levied on 963,022 barrels and $105,000 levied on 1,050,000 barrels under M/08/02);
Committee oil financier table, contract no. M/08/02 (showing Taurus financing liftings of 963,022 barrels
and 1,050,000 barrels); UEB Geneva record, Taurus Nassau account, bank statement (Oct. 31, 2000)
(reflecting a debit of $200,019); Fransabank record, SOMO account, SWIFT message (Oct. 26, 2000)
(reflecting a payment of $200,000); SOMO bills of lading, ck/4919 (Part 1) and ck/4919 (Part 2) (Nov. 4,
2000) (identifying the New Vitality as having lifted 1,050,000 and 963,022 barrels).
251 SOMO sales contract, no. M/08/37 (June 23, 2000) (contracting with Machinoimport); Committee oil
financier table, contract no. M/08/37 (showing that Taurus financed liftings of 900,000 barrels, 1,092,607
barrels, 1,619,856 barrels and 1,300,000 barrels); Records of SOMO surcharge invoices (Sept. 4 and Oct.
17, 2000) (showing $161,985 levied on 1,619,856 barrels and $130,000 levied on 1,300,000 barrels under
M/08/37); UEB Geneva record, Taurus Nassau account, bank statement (Oct. 31, 2000) (reflecting debits
of $130,019 and $160,024.76); Fransabank record, SOMO account, SWIFT message (Oct. 16, 2000)
(reflecting a payment of $130,000); Fransabank record, SOMO account, SWIFT message (Oct. 25, 2000)
(reflecting a payment of $160,000); SOMO bills of lading, bbl/2943 (Sept. 4, 2000) (identifying the Violet
as having lifted 1,619,856 barrels), bbl/2982 (Oct. 17, 2000) (identifying the Berge Ingerid as having lifted
1,300,000 barrels); Committee oil surcharge table, contract no. M/08/37 (noting surcharges of $160,000
and $130,000 paid to Fransabank by United European Bank).
252 Patrick Hilty interview (Apr. 13, 2005); BNP Geneva record, Fenar Petroleum account, articles of
incorporation (June 15, 1999). Mr. Hilty is President of ReviTrust and personally oversaw the creation of
both Fenar and Alcon. In the course of his interview, Mr. Hilty described the actions of the beneficial
owners of Fenar and Alcon, but did not provide the identities of these persons. Patrick Hilty interview
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