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
1. Vitol’s Direct Contracts with SOMO
In the initial three phases, Vitol purchased Iraqi oil only through other contracting companies.
Beginning in Phase IV, Vitol signed the first of eight SOMO contracts that had been obtained
with the assistance of Mr. Boidevaix. The contracts resulted in the purchase of almost 30 million
barrels of oil and were signed by Mr. Boidevaix as President of “Vitol – France for and on behalf
of Vitol S.A. Geneva – Switzerland.” No company called “Vitol France” existed. Vitol used the
name simply to give it a “French angle” with SOMO. For his services, Mr. Boidevaix received a
fee of $30,000 per phase and a premium of $0.01 per barrel, which was later raised to $0.03 per
barrel, for any barrels that Vitol lifted over the first three million barrels. 314
Surcharges were levied on the oil contracts executed by Vitol and Mr. Boidevaix in Phases IX
and X. Vitol was aware that SOMO had imposed surcharges by Phase IX. At an OPEC
conference in 2001, a SOMO official advised Mr. Boidevaix that Vitol had to pay surcharges if
the company wanted any further oil contracts. Mr. Boidevaix discussed the matter with Robin
D’Alessandro, the main Vitol trader for Iraqi crude oil, who in turn raised the issue with the
management team in charge of crude oil at Vitol. Both Mr. Boidevaix and Ms. D’Alessandro
stated that they agreed that no surcharges would be paid. However, after the OPEC conference,
SOMO wrote a letter to the Minister of Oil seeking approval for Vitol’s contract in Phase IX, and
explicitly referenced that, under the contract, surcharges were due within 30 days of the lift. In
the letter, the SOMO official wrote that the Minister of Oil— based on his meeting with Mr.
Boidevaix during the OPEC conference—previously had approved giving this contract to Vitol.
As demanded by SOMO, a surcharge payment on contract M/09/97 was made 23 days after Vitol
lifted the oil. 315
314 Robin D’Alessandro interview (Oct. 10, 2005) (indicating that, from Phases I through III, Vitol
purchased from a number of companies including Total and Bayoil); Robin D’Alessandro fax to Oil
overseers (Jan. 26, 1998) (indicating that Vitol was working with Sidanco regarding the purchase of 7.2
million barrels of oil); SOMO sales contract, no. M/04/08 (June 4, 1998); Vitol S.A. record, Vitol S.A. and
S.B. Consultant consultancy agreement (Apr. 27, 1998); Committee oil company table, contract nos.
M/04/08 (6,068,630 barrels lifted), M/05/36 (3,521,487 barrels lifted), M/06/40 (4,967,270 barrels lifted),
M/07/30 (1,555,894 barrels lifted), M/08/34 (1,521,065 barrels lifted), M/09/97 (1,986,148 barrels lifted),
M/10/78 (966,440 barrels lifted), M/13/74 (8,939,152 barrels lifted). A SOMO official has confirmed that
SOMO would not have sold oil to Vitol as a Swiss company. Saddam Z. Hassan interview (Mar. 9, 2005).
315 Committee oil company table, contract nos. M/09/97 (showing that surcharges in the amount of
$545,801 were levied and paid), M/10/78 (showing that surcharges in the amount of $241,610 were levied
and paid); Serge Boidevaix interview (Oct. 4, 2005); Robin D’Alessandro interview (Oct. 10, 2005);
SOMO letter to Amer Rashid (Apr. 5, 2001)(approving contract M/09/97 for two million barrels of oil for
Vitol) (translated from Arabic); SOMO bill of lading, bbl/3123 (May 31, 2001) (relating to contract
M/09/97 and indicating that Vitol’s first lift under contract M/09/97 occurred on May 31, 2001);
Fransabank record, SOMO account, credit advice (June 23, 2001) (showing the transfer of $250,217.00
from Peakville Limited’s account at HSBC Hong Kong on June 23, 2001). SOMO records refer to a
minimal shortfall of $622 in the surcharge paid on contract M/10/78. These surcharge payments amounted
to a $0.27 per barrel surcharge on Vitol’s Phase IX contract and a $0.25 per barrel surcharge on Vitol’s
Phase X contract. Committee oil company table, contract nos. M/09/97, M/10/78.
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