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 Committee indicates that Mr. Sudhir also was actively and knowingly involved in paying the surcharges to the Iraqi regime. On August 6, 2001, Mr. Sudhir wrote to SOMO indicating that he was “primarily responsible for the financial administration the Company’s [Mastek] crude oil trading with Iraq” and undertaking to “make good all the Company’s obligations to SOMO.” As discussed previously, Keppel Oil, a company established by Mr. Sudhir, transferred €1,999,859 to a SOMO account on the same day that Mr. Sudhir wrote the letter. When interviewed by the Committee, Mr. Sudhir admitted that he had transferred funds to SOMO. 338 3. Vitol’s Financing of Surcharge Payments by Hamida Na’ana In at least one instance, Vitol funded the payment of surcharges by an individual beneficiary by paying a sufficiently high commission to cover the surcharge. During Phases X and XI, Vitol purchased oil allocated to Hamida Na’ana. Ms. Na’ana is a Syrian journalist who received oil allocations from Tariq Aziz to compensate her for her efforts in writing a book and articles about Iraq and its leaders. 339 The contracts with SOMO to purchase Ms. Na’ana’s oil allocations in Phases X and XI were not signed by Vitol but by a Panama-registered company, Devon Petroleum. However, Ms. Na’ana dealt directly with Vitol. She communicated regularly with Gilles Chautard, a French-speaking trader at Vitol, and forwarded her invoices and received her payments from Vitol. 340 338 Jaya Sudhir letters to the Committee (Oct. 19 and 24, 2005); Faek Ahmad Shareef record, Jaya Sudhir letter to Saddam Z. Hassan (Aug. 6, 2001); Jordan National Bank record, SOMO account, credit advice (Aug. 6, 2001) (wire transfer by “Keppel Oil” in the amount of €1,999,859); Jaya Sudhir interview (Aug. 19, 2005). 339 Confidential witness interview; Tariq Aziz interviews (Mar. 1 and Aug. 16, 2005); Taha Yassin Ramadan interview (Aug. 17, 2005) (commenting that Mr. Aziz selected Ms. Na’ana for allocations because “she wrote a lot about Iraq . . . she wrote good articles about Saddam, Uday, Qusay”); Saddam Z. Hassan interview (Mar. 9, 2005); Iraq officials interviews. During the Programme, Ms. Na’ana received oil allocations totaling 11.3 million barrels of oil over seven phases. Committee oil beneficiary table, contract nos. M/06/70, M/07/100, M/08/70, M/09/26, M/10/34, M/11/100, M/13/26. Ms. Na’ana has acknowledged publicly that she received oil allocations. CBC-TV Toronto, “Bribes from Baghdad” (Mar. 28, 2005). In an interview with CBC <strong>report</strong>er Terence McKenna, when asked about the $30,000 profit she made from her oil allocations, Ms. Na’ana stated: “Anyhow, it wasn’t for me, the $30,000 wasn’t for me. I brought a group of artists and doctors from the Philippines, from the Philippines to Baghdad. Artists, you see. So it was to pay for that. Anyhow, you can see, I don’t have a fortune.” Ibid. 340 Committee oil financier tables, contract nos. M/10/34, M/11/100; SOMO sales contracts, nos. M/10/34 (Aug. 2, 2001), M/11/100 (Feb. 11, 2002); Confidential witness interview; Hamida Na’ana fax to Gilles Chautard (July 9, 2002) (sending invoice to Devon for total amount due of $375,000 to be transferred to Ms. Na’ana’s account at Arab Bank Geneva); Vitol record, Robin D’Alessandro e-mail to Gilles Chautard, Othmar Willi, and Roland Favre (July 10, 2002) (authorizing payment to Ms. Na’ana for a lift of 1.5 million barrels of oil); Robin D’Alessandro interview (Oct. 10, 2005) (indicating that Vitol introduced Ms. Na’ana to Devon Petroleum); Riad El-Taher interview (Aug. 31, 2005) (describing Devon Petroleum as an agent of Vitol with respect to Iraqi oil purchases). Mr. El-Taher is an Iraqi engineer based in the United Kingdom, who ran Friends Across Frontiers, an organization that campaigned against Iraqi sanctions. Vitol purchased some of his allocations through Devon Petroleum. Riad El-Taher interview (Aug. 31, 2005). REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 168 OF 623
INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME REPORT ON PROGRAMME MANIPULATION CHAPTER TWO OIL TRANSACTIONS AND ILLICIT PAYMENTS Surchages in the amount of $710,782.25 were levied on the two contracts associated with Ms. Na’ana’s allocations in Phases X and XI. Ms. Na’ana paid these surcharges in full in three payments that occurred between August 2001 and October 2002. Ms. Na’ana received the funds to make these surcharge payments from Vitol. SOMO bank records indicate that Ms. Na’ana made an advance surcharge payment of $60,000 on August 12, 2001 with respect to her Phase X allocation. Ms. Na’ana had received an advance payment in a similar amount from Vitol. In an invoice dated October 10, 2001 sent to Mr. Chautard, Ms. Na’ana requested payment on her commission regarding the first lift executed by Vitol on her Phase X contract, and she acknowledged that Vitol had previously paid her $60,000. Subsequent to the $60,000 advance payment, Vitol paid Ms. Na’ana’s account at Arab Bank Geneva over $1 million between October 2001 and July 2002. Ms. Na’ana subsequently transferred $725,000 from her bank account at Arab Bank Geneva to her account at the Arab Bank Amman. Surcharges in the approximate amount of $650,000 were paid from Ms. Na’ana’s account at Arab Bank Amman in December 2001 and October 2002. Ministry of Oil records confirm that these payments were made in connection with Ms. Na’ana’s Phase X and XI allocations. 341 A source familiar with these transactions stated to the Committee that Ms. Na’ana made the surcharge payments after two or three phone conversations with Mr. Chautard from Vitol London, who advised Ms. Na’ana that these payments had to be made as “taxes” due to the Iraqi regime. In response to a notice letter from the Committee, Vitol stated that “Vitol had no knowledge that Ms. Na’ana paid surcharges to the regime of Saddam Hussein . . . . Neither Vitol, 341 Jordan National Bank record, SOMO account, credit advices (Aug. 12, 2001) (showing transfer of $59,985 from Ms. Na’ana’s account at Arab Bank Amman; handwritten notation on advice indicates that it is an advance payment relating to contract M/10/34), (Dec. 2, 2001) (showing transfer of $425,777 from Ms. Na’ana’s account at Arab Bank Amman; handwritten notation on advice indicates that payment relates to contract M/10/34), (Oct. 29, 2002) (showing transfer of $225,000 from Ms. Na’ana’s account at Arab Bank Amman; handwritten notation on advice indicates that payment relates to contract M/11/100) (each translated from Arabic); Hamida Na’ana invoice to Gilles Chautard (Vitol London) (Oct. 10, 2001) (sending an invoice to Gilles Chautard for 981,608 barrels of oil shipped on September 7, 2001); Arab Bank Geneva record, Hamida Na’ana account, credit advices (Oct. 31, 2001) (wire transfer of $283,562.80 by order of Vitol Geneva from Chase Manhattan Bank London), (Nov. 11, 2001) (wire transfer of $358,506.05 by order of “Mansel Oil Ltd. c/o Vitol from Chase Manhattan Bank London”), (July 11, 2002) (wire transfer of $375,000 by order of Vitol Bahrain from BNP Geneva); Arab Bank Geneva record, Hamida Na’ana account, account debit advices (Nov. 26, 2001) (wire transfer of $500,000 to Ms. Na’ana’s account at Arab Bank Amman), (Oct. 10, 2002) (wire transfer of $225,000 to Ms. Na’ana’s account at Arab Bank Amman); Jordan National Bank record, SOMO account, credit advices (Aug. 12, 2001) (showing transfer of $59,985 from Ms. Na’ana’s account at Arab Bank Amman; handwritten notation on advice indicates that it is an advance payment relating to contract M/10/34), (Dec. 2, 2001) (showing transfer of $425,777 from Ms. Na’ana’s account at Arab Bank Amman; handwritten notation on advice indicates that payment relates to contract M/10/34), (Oct. 29, 2002) (showing transfer of $225,000 from Hamida Na’ana’s account at Arab Bank Amman; handwritten notation on advice indicates that payment relates to contract M/11/100) (each translated from Arabic). REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 169 OF 623
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