report on programme manipulation - Independent Inquiry Committee
report on programme manipulation - Independent Inquiry Committee
report on programme manipulation - Independent Inquiry Committee
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INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME<br />
REPORT ON PROGRAMME MANIPULATION<br />
CHAPTER TWO<br />
OIL TRANSACTIONS AND ILLICIT PAYMENTS<br />
The oil allocated to Mr. Shareef in Phases V and VI was lifted by Tradeyear Sdn Bhd<br />
(“Tradeyear”), a Malaysian company. Mr. Shareef was unhappy with the commissi<strong>on</strong>s he was<br />
receiving from Tradeyear, and he decided al<strong>on</strong>g with his business partner and former sister-inlaw,<br />
Noorasiah Mahmood, to revive Mastek, a l<strong>on</strong>g-dormant Malaysian company, for the purpose<br />
of obtaining Iraqi oil c<strong>on</strong>tracts. Mr. Shareef and Ms. Mahmood were joined at Mastek by Mr.<br />
Sudhir, a Malaysian businessman who had dealt previously with Vitol. 325<br />
Mastek received oil c<strong>on</strong>tracts from SOMO in Phases VII through IX, and Vitol financed and<br />
lifted the oil received under these c<strong>on</strong>tracts. Within Mastek, Mr. Shareef handled the company’s<br />
relati<strong>on</strong>s with SOMO and Iraq, and he often stayed in Amman or Baghdad. Mr. Sudhir managed<br />
Mastek’s business arrangements with Vitol. After receiving 2.5 milli<strong>on</strong> barrels in Phase VII and<br />
five milli<strong>on</strong> barrels in Phase VIII, Mastek’s oil allocati<strong>on</strong> increased dramatically in Phase IX as it<br />
received over 39.5 milli<strong>on</strong> barrels of oil—the single largest allocati<strong>on</strong> of oil during the<br />
Programme. Vitol and bank records indicate that Vitol financed and lifted at least 33 milli<strong>on</strong><br />
barrels of oil obtained by Mastek during Phase IX, making Vitol <strong>on</strong>e of the major purchasers of<br />
Iraqi crude oil during the Phase IX exporting crisis. 326<br />
interview (Aug. 17, 2005); Amer Rashid interview (Aug. 21, 2005) (indicating that Mr. Shareef was said to<br />
have some c<strong>on</strong>necti<strong>on</strong> to Mr. Badawi); Iraq officials interviews; Faek Ahmad Shareef interviews (Aug. 15-<br />
18, 2005) (indicating that he brought delegati<strong>on</strong>s to Iraq from various countries and that Iraqis knew that he<br />
was married to the sister-in-law of Mr. Badawi); Jaya Sudhir interview (Aug. 19, 2005) (indicating that Mr.<br />
Shareef had leveraged his c<strong>on</strong>necti<strong>on</strong> to Mr. Badawi). Mr. Shareef was married to the sister-in-law of Mr.<br />
Badawi. Faek Ahmad Shareef record, Faek Ahmad Shareef biographical data (undated). A review of Iraqi<br />
documents c<strong>on</strong>firms that Iraqi officials associated Mr. Shareef with Mr. Badawi as references to Mr.<br />
Shareef’s oil allocati<strong>on</strong>s in SOMO documents appear in some instances as “Mr. Faek Ahmad Shareef / for<br />
the benefit of Abdullah.” SOMO oil allocati<strong>on</strong> table for Phase VII (Dec. 17, 1999) (special requests)<br />
(translated from Arabic); SOMO letter to Amer Rashid (Dec. 23, 1999) (approving c<strong>on</strong>tract M/07/59 for<br />
Mastek) (translated from Arabic); SOMO oil allocati<strong>on</strong> table for Phase VIII (June 14, 2000) (translated<br />
from Arabic); see also Abdullah Haji Ahmad Badawi letter to Taha Yassin Ramadan (Nov. 13, 2001)<br />
(recommending a delegati<strong>on</strong> headed by Mr. Shareef and Noor Asiah Mahmood). The <strong>Committee</strong> has not<br />
found any evidence that Mr. Badawi has received any benefit from the oil allocati<strong>on</strong>s traded by Mastek,<br />
and Mr. Shareef and the other Mastek shareholders have denied that Mr. Badawi received any benefit from<br />
the oil traded. Jaya Sudhir interview (Aug. 19, 2005); Faek Ahmad Shareef interviews (Aug. 15-18, 2005).<br />
When asked about the letter sent by Mr. Badawi to Mr. Ramadan recommending the delegati<strong>on</strong> headed by<br />
Mr. Shareef, Mr. Shareef indicated that Mr. Badawi had issued the letter as a way to support the Malaysian<br />
private sector and had d<strong>on</strong>e so for other Malaysian companies as well. Faek Ahmad Shareef interviews<br />
(Aug. 15-18, 2005).<br />
325 Faek Ahmad Shareef interviews (Aug. 15-18, 2005); Jaya Sudhir interview (Aug. 19, 2005); Kho Hui<br />
Meng interview (Aug. 19, 2005); Farah Jaafar, “Bright Outlook for Mastek,” The New Straits Times, Jan.<br />
24, 2000 (indicating that Mr. Shareef revived Mastek with the hope that it eventually would become an<br />
established oil trading company).<br />
326 <strong>Committee</strong> oil company table, c<strong>on</strong>tract nos. M/07/59, M/08/60, M/09/18; <strong>Committee</strong> oil financier table,<br />
c<strong>on</strong>tract nos. M/08/60, M/09/18; Vitol and Mastek Phase VII agreement; Faek Ahmad Shareef interviews<br />
(Aug. 15-18, 2005) (indicating that it was “Vitol, all Vitol” when it came to lifting the oil for Mastek); Jaya<br />
Sudhir interview (Aug. 19, 2005); SOMO letters to Amer Rashid (Jan. 11, 2001) (approving c<strong>on</strong>tract<br />
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