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
Zarubezhneft’s General Director, denied that Zarubezhneft had any role in distributing allocations
to other Russian companies. 33
B. POLITICAL ALLOCATIONS
The Government of Iraq distributed oil allocations in the names of various individuals and entities
in Russia, including a number of Russian political parties. The Committee has obtained
documents relating to Iraqi oil allocations to a number of political parties, including the
Communist Party of the Russian Federation, the Liberal Democratic Party of Russia, and the
Party of Peace and Unity.
1. Communist Party of the Russian Federation
According to Iraqi Ministry of Oil records, the Communist Party of the Russian Federation
(“KPRF”) was granted a total of 125.1 million barrels in oil allocations. At least some of this oil
was allocated to KPRF through an entity called the “Foundation for Friendship with Peoples of
Arab States.” Of the allocations made to KPRF, a total of about 106.9 million barrels was lifted
and purchased by various companies, including ACTEC, Onaco, Rossbulneft, and RAO MES. 34
KPRF was founded in 1993 and is a successor to the Communist Party of the Soviet Union.
Since its creation, KPRF has been headed by Gennady Zyuganov, who began his career with the
Communist Party of the Soviet Union in the early 1970s. Mr. Zyuganov came in second during
the Russian presidential elections of 1996 and 2000. He currently heads the KPRF faction in the
State Duma, the lower chamber of the Russian parliament. During the sanctions period, Mr.
Zyuganov and KPRF consistently opposed the sanctions regime and military actions against Iraq.
In the spring of 2000, the Russian Federation transmitted to the 661 Committee a letter from
KPRF’s faction in the State Duma, calling for “lift[ing] [of] the inhuman embargo against Iraq.”
Representatives of KPRF frequently traveled to Baghdad to discuss issues of Russian-Iraqi
cooperation. Reportedly, in February 2003, Mr. Zyuganov met with Saddam Hussein and upon
33 Alexandre Kramar interview (Mar. 5, 2005) (stating that he did not have any knowledge of either the
Ministry of Energy or the Ministry of Foreign Affairs being directly involved in coordinating the
distribution of oil contracts); Russia officials #3, 6-7 interview (Mar. 1, 2005) (denying that Russia or any
Russian company organized participation of other companies in the Programme).
34 Iraq officials interviews; Committee oil beneficiary and company tables, contract nos. M/02/26, M/03/28,
M/03/38 (contracting with Onaco); M/04/45 (contracting with Rossbulneft); M/05/56 (contracting with
RAO MES); M/05/63, M/06/55, M/07/48, M/08/05, M/10/83, M/11/39 (contracting with ACTEC);
M/12/27 (unexecuted) (contracting with ACTEC); Bayoil record, Bayoil letter to Gennady Zyuganov (Oct.
14, 1999) (translated from Russian) (requesting “one more” meeting in the last half of October 1999 to
“discuss our joint work”); Ministry of Oil record, Gennady Zyuganov letter to Tariq Aziz (Feb. 12, 1999)
(translated from Russian); Ministry of Oil record, B. Bibilov letter to SOMO (July 14, 1998) (translated
from Russian) (confirming that KPRF’s oil allocation for Phase IV was transferred to Rossbulneft).
According to the letter from Mr. Bibilov to SOMO, the former was a general director of the Foundation for
Friendship with Peoples of Arab States. Ibid.
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