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 Windmill and Ibex S&E and the sole signatory to Windmill’s bank accounts at Banque Audi and also at Banque Saradar, both used for payments to SOMO. 372 2. The August 27, 2001 Essex Top-Off Load On August 27, 2001, the Essex lifted 1.8 million barrels under Ibex contract M/10/08, again through a Trafigura-financed letter of credit, which was again topped-off with over 200,000 barrels of smuggled oil. Trafigura sold approximately one million barrels of oil from the resulting cargo each to Koch Petroleum and Petromar, S.A., an affiliate of Petroleos de Venezuela. Captain Chiladakis’s revelations prevented the sales from being completed, however. On October 24, 2001, the Essex arrived at Curaçao and was prevented from off-loading the cargo for Koch Petroleum by authorities until the legality of the cargo was reconciled. 373 In order to purchase the top-off cargo on this second Essex trip, Trafigura again opened a standby letter of credit on behalf of Roundhead. To cancel the letter of credit, Trafigura transferred payment of €6.4 million to Ibex S&E’s Crédit Agricole Indosuez bank account on September 25, 2001. Two days later, Ibex S&E wired €5.3 million to Windmill’s Banque Saradar account in Beirut. On October 5, 2001, Windmill executed a wire transfer of €5.2 million to a SOMO bank account at Fransabank in Beirut. 374 3. Surcharge Payments to SOMO Surcharge payments were also made to the Government of Iraq in connection with each of the two United Nations-approved oil cargoes lifted by the Essex—with financing from Trafigura— under Ibex’s contracts M/09/81 and M/10/08. On June 15, 2001, Trafigura wired two payments to Ibex S&E’s Banque Audi account in the amounts of €637,336 and €81,242. On June 18, 2001, Ibex S&E wired €718,590 to the Windmill account at Banque Audi. The next day, Windmill wired €637,348 to SOMO’s Fransabank account. SOMO records reflect this payment as satisfying the surcharges imposed on the Trafigura-financed lift under M/09/81. On October 2, 2001, Windmill received a wire transfer of €667,978 into its Banque Saradar account from Ibex 372 Jean-Paul Cayre interview (Dec. 1, 2004); Banque Audi account opening records for Windmill account no. 595136 (Apr. 3, 2001); Banque Saradar record, Windmill account, account opening records (Aug. 2, 2001). 373 SOMO sales contract, no. M/10/08 (July 11, 2001) (contracting with Ibex); Committee oil financier table, contract no. M/10/08; SOMO bill of lading, bbl/3161 (Aug. 27, 2001); Beverly Rudy letter to Benon Sevan (Nov. 2, 2001). 374 Beverly Rudy letter to Benon Sevan (Nov. 2, 2001); Crédit Agricole Indosuez record, Ibex S&E account, payment order no. 16050 (Sept. 25, 2001); Crédit Agricole Indosuez record, Ibex S&E account, payment order from Ibex S&E to Windmill at Banque Audi (Sept. 27, 2001); Banque Audi record, Windmill account, statement (June 30 to Oct. 31, 2001); Jean-Paul Cayre Affidavit, para. 27 (acknowledging that upon receiving payment for the top-off cargo, Ibex S&E in turn paid SOMO for the oil). REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 184 OF 623
INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME REPORT ON PROGRAMME MANIPULATION CHAPTER TWO OIL TRANSACTIONS AND ILLICIT PAYMENTS S&E. The next day Windmill wired €579,324 to SOMO’s Fransabank account. SOMO records reflect this payment as satisfying surcharges imposed contract M/10/08. 375 A surcharge payment was also made for additional oil lifted under contract M/10/08. On August 6, 2001, the Hellas Warrior lifted 601,812 barrels of Kirkuk crude oil from Ceyhan, on which SOMO assessed a surcharge of $0.25 per barrel. On September 9, 2001, Ibex S&E’s Banque Saradar account received €169,000 from Ibex S&E’s Crédit Agricole Indosuez account in Paris and on the same day wired €168,367 from its Banque Saradar account to SOMO’s bank account at Fransabank. 376 4. Trafigura’s False Invoicing On June 27, 2001, Trafigura sent an invoice to Ibex Energy for $379,650 requesting rebilling of demurrage incurred by the vessel Argo Hebe. 377 This invoice contained a handwritten note in French addressed to an individual named “Rui” and stating “there is no time to waste.” Upon receiving the invoice, Mr. Cayre e-mailed Michele Sloan, a Trafigura employee, asking her to change the invoice to the attention of Ibex S&E rather than Ibex Energy. On July 2, 2001, Ibex S&E wired €451,175 (the equivalent of $379,650) from its Swiss bank account at Crédit Agricole Indosuez to Trafigura’s bank account at Banque Paribas in Paris. Neither Ibex nor Ibex S&E had any involvement with Trafigura’s chartering of the Argo Hebe. Mr. Cayre has stated that the invoice was created as cover for the payment of Trafigura’s share of the profit on the first top-off cargo. 378 375 Crédit Agricole Indosuez record, Ibex S&E account statement; Banque Saradar record, Windmill account, statement (June 30 to Oct. 31, 2001); Fransabank record, SOMO account, credit advice (Oct. 4, 2001) (showing deposit from Windmill); Banque Audi record, Ibex S&E account, statement (June 30 to Oct. 31, 2001); Banque Audi record, Windmill account, statement (June 30 to Oct. 31, 2001). Committee oil surcharge table, contract nos. M/09/81, M/10/08. 376 SOMO commercial invoice, C/104/2001 (Aug. 6, 2001) (relating to Ibex Energy contract M/10/08); Crédit Agricole Indosuez record, Ibex S&E account, statement (June 30 to Oct. 31, 2001); Banque Saradar record, Windmill account, statement (June 30 to Oct. 31, 2001); Committee oil surcharge table, contract no M/10/08. 377 Argo Hebe was the vessel contracted for by Trafigura when Iraq cancelled their contract in December 1999, resulting in a $690,300 demurrage. SOMO fax to Oil overseers (Dec. 17, 1999) (copied to Trafigura); Michele Sloan telex to SOMO (Dec. 20, 1999); Italia Chartering invoice to Trafigura (Dec. 30, 1999) ($690,300 for charterparty cancellation). 378 Trafigura invoice to Ibex and Ibex S&E (June 27, 2001); Jean-Paul Cayre e-mail to Michele Sloan (June 27, 2001); Crédit Agricole Indosuez record, Ibex S&E account, statement (June 30 to Oct. 31, 2001)s (May 31 and Aug. 31, 2001); Jean-Paul Cayre affidavit, para. 23 (acknowledging that the invoiced amount actually represented the agreed percentage of profit from the top-off cargo for transfer to Trafigura). REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 185 OF 623
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report on programme manipulation - Independent Inquiry Committee

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