report on programme manipulation - Independent Inquiry Committee

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INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME REPORT ON PROGRAMME MANIPULATION CHAPTER TWO OIL TRANSACTIONS AND ILLICIT PAYMENTS During that same period of time, a company named Alliance Petroleum sent six wire transfers totaling $2.6 million from its Standard Chartered Bank (Hong Kong) account into the bank accounts of Petrocorp and Jabal. Two of the wire transfers contained payment details with the notation “c/o Taurus Petroleum.” 268 The deposits from Alliance and Taurus, discussed above, constituted most of the money deposited in the Jabal and Petrocorp accounts through July 2001, at which time Alcon and Fenar began transferring funds into the accounts. Among the bank records reviewed, the Committee found one invoice describing the purported nature of the payments to Petrocorp. The invoice, which was addressed to Mr. Schenker, requested that Taurus Nassau remunerate Petrocorp for “loading fees” on the Front Commander, a vessel used to load oil under Fenar contract M/09/04. The invoice specified that Taurus should pay Petrocorp via its First National Bank account. 269 The funds, however, were used for a different purpose. Most of the money deposited in the Jabal and Petrocorp bank accounts by Taurus Nassau and Alliance was used to pay surcharges imposed on contracts of Alcon and Fenar. Between January 1 and July 31, 2001, a total of at least $7 million and €338,000 was transferred from the Petrocorp and Jabal accounts to a SOMO account at Jordan National Bank in Amman. The requests for each of these wire transfers directed First National Bank to replace Petrocorp’s and Jabal’s names on the transfers with names of various individuals, including “Amr Bibi,” “Salim Ahmad,” “Souhail Ousta,” “Murice Rizli,” “Elias Rizly,” and “Mohammed Ali.” Furthermore, as described below, funds from the Petrocorp and Jabal accounts were transferred to SOMO also through a personal account belonging to Mr. Ladki. 270 268 First National Bank record, Petrocorp account, credit advice (Dec. 19, 2001); First National Bank record, Jabal account, credit advices (July 31 2001 to Feb. 11 2002) and statements (Jan. 1 to Dec. 31, 2001). The Committee was unable to obtain additional information regarding Alliance. 269 First National Bank record, Petrocorp account, invoice (June 10, 2001) (issued to Martin Schenker); Lebanon Financial Intelligence Unit record, Lebanon Department of Examiners and Investigators <strong>report</strong> (June 28, 2005) (translated from Arabic). 270 First National Bank record, Petrocorp account, debit advices and wire requests (Feb. 7 to July 16, 2001); First National Bank record, Jabal account, debit advices and wire requests (Apr. 24 to July 23, 2001); First National Bank record, Petrocorp account, wire request (Feb. 7, 2001) (requesting the use of the name “Souhail Ousta” on the wire transfer); First National Bank record, Jabal account, wire request (May 22, 2001) (requesting the use of the name ”Salim Ahmad” on the wire transfer); First National Bank record, Petrocorp account, debit advices (Feb. 23 to June 26, 2001) and statements (Jan. 1 to Dec. 31, 2001); First National Bank record, Jabal account, debit advices (May 16 and 23, 2001); Cairo Amman Bank Beirut record, Musbah Ladki account, bank statements (Feb. 24, 2001 to Nov. 29, 2002); Jordan National Bank record, SOMO account, bank statements (Mar. 31 to June 30, 2001) (reflecting the receipt of funds in amounts and on dates consistent with the transfers out of Mr. Ladki’s account). REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 136 OF 623
INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME REPORT ON PROGRAMME MANIPULATION CHAPTER TWO OIL TRANSACTIONS AND ILLICIT PAYMENTS Chart E – Flow of Funds from Taurus to SOMO (January 1 to July 31, 2001) $3.2m + €338,000 Taurus Nevis (UEB/BNP, Banque Bruxelles Lambert, Credit Suisse) $4.0m $9.2m Jabal (First National Bank) Petrocorp (First National Bank) $405,000 Musbah Ladki (Cairo Amman Bank) $1.5m $1.7m SOMO (Jordan National Bank) $3.8m After Mr. Schenker had directed opening of bank accounts for Alcon and Fenar, Taurus Nassau stopped transferring money directly to the Petrocorp and Jabal banks accounts in July 2001. 271 Instead, Taurus Nevis began regularly transferring funds to the Fenar and Alcon bank accounts. In turn, Fenar began regularly transferring funds to Petrocorp’s bank account, and Alcon transferred funds to Jabal’s account. During the entire existence of their bank accounts at BNP, neither Fenar nor Alcon received any funds from any party other than Taurus Nevis—with the exception of one payment of $664,769 to Alcon from a company with the same address as Taurus London. 272 The money transferred from Taurus Nevis to Petrocorp and Jabal through the Alcon and Fenar bank accounts funded the payment of surcharges on oil contracts between Phases X and XII. Bank records show that, between August 2001 and December 2002, Taurus Nevis transferred $6.3 million to Fenar’s bank account, and Fenar transferred a total of $6 million in funds to Petrocorp’s account. Bank records also reflect that during the same period of time, Taurus Nevis similarly transferred a total of $8 million to Alcon, and Alcon transferred a total of $8.5 million in funds to Jabal’s account. Unlike Taurus Nassau, Alcon and Fenar did not conceal their identities 271 Lebanon Financial Intelligence Unit record, Lebanon Department of Examiners and Investigators <strong>report</strong> (June 28, 2005) (translated from Arabic) (noting an absence of any payments from Taurus Nassau or anonymous sources after July 2001). 272 ReviTrust record, Fenar internal accounting spreadsheet (undated); ReviTrust record, Alcon internal accounting spreadsheet (undated); Patrick Hilty interview (Apr. 13, 2005); BNP Geneva record, Fenar account, credit advices (Sept. 17, 2001 to Nov. 25, 2002); BNP Geneva record, Alcon account, credit advices (Aug. 28, 2001 to Nov. 25, 2002); 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). The one transfer from Sonatrach Petroleum to Alcon was noted as being care of “5 Princes Gate, London,” the same address as Taurus London. BNP Geneva record, Alcon account, credit advice (Dec. 24, 2001). REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 137 OF 623
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