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
5. The Surcharge Phases
When the Iraqi Ministry of Oil was in need of oil purchasers in the face of mandatory surcharges
imposed in the end of 2000, Taurus used Alcon and Fenar to purchase over 47 million barrels of
oil in Phase IX. Consequently, Liechtenstein companies—which had not participated in the
Programme prior to Fenar’s first contract—became the largest purchasers of Iraqi oil during
Phase IX, exceeding even Russian and French firms. In the subsequent surcharge phases, Alcon
and Fenar purchased an additional 55.1 million barrels of oil. Ministry of Oil and bank records
show that the surcharges assessed and paid on the Alcon and Fenar contracts totaled over $26
million. 264
6. Taurus Funded the Surcharges on the Alcon and Fenar Contracts
Most of the surcharges imposed on Alcon and Fenar contracts were paid through wire transfers
from two accounts in the names of Petrocorp and Jabal at First National Bank in Lebanon (“First
National Bank”). On opening bank records, Mr. Ladki, the same individual named by Taurus as
the beneficial owner of Fenar, was named as the founder and owner of Petrocorp and Jabal and
the sole signatory to both companies’ bank accounts. The Petrocorp bank account was opened in
August 2000, and the Jabal bank account in March 2001. From the time that the accounts were
opened until they became inactive in December 2002, they were funded primarily by Taurus or
entities controlled by Taurus. Taurus Nassau, Fenar, and Alcon transferred at least $27.6 million
of the total of about $32.6 million deposited in the Jabal and Petrocorp bank accounts. 265
As described below, the Alcon and Fenar surcharges were generally paid in three different ways:
(1) out of the Jabal and Petrocorp accounts with funding from Taurus Nassau; (2) out of the Jabal
and Petrocorp accounts with funding from Alcon and Fenar; and (3) out of a personal account
belonging to Mr. Ladki, with funding from Jabal and Petrocorp.
Prior to the opening of the Alcon and Fenar accounts, Taurus entities transferred money directly
to the Petrocorp and Jabal accounts for subsequent transfers to a SOMO account. Between
January and July 2001, Taurus Nassau directly transferred over $9.2 million to Petrocorp’s
264 “Programme Management Report,” vol. II, p. 32; Committee oil company, financier, and surcharge
tables, contract nos. M/08/67, M/09/04, M/10/09, M/10/96, M/11/65, M/11/67, M/12/39, M/13/07;
M/09/01, M/09/35, M/10/03, M/10/17, M/10/59, M/11/25, M/11/43, M/12/35, M/13/19.
265 First National Bank record, Jabal account, account opening documents (Mar. 30, 2001); First National
Bank record, Petrocorp account, account opening documents (Aug. 10, 2000); Banque Bruxelles Lambert
Geneva record, Taurus Nassau account, debit advices (Feb. 7 to June 28, 2001); Credit Suisse record,
Taurus Nassau account, debit advices (Jan. 23 to July 2, 2001); UEB Geneva record, Taurus Nassau
account, bank statements (Jan. 31, Apr. 30, May 31, and June 30, 2001); BNP Geneva record, Fenar
account, debit advices (Sept. 25, 2001 to Nov. 29, 2002); BNP Geneva record, Alcon account, debit advices
(Aug. 31, 2001 to Nov. 16, 2002); Lebanon Financial Intelligence Unit record, Lebanon Department of
Examiners and Investigators <strong>report</strong> (June 28, 2005) (translated from Arabic) (reflecting the total funds
received by the Jabal and Petrocorp accounts).
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