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
The surcharge payments associated with these contracts are discussed in further detail in Section
VI.C. below. 104
D. CLAUDE KASPEREIT, E.O.T.C., AND MARC RICH + CO.
Claude Kaspereit, a businessman and son of the French Parliamentarian Gabriel Kaspereit, was
allocated a total of over 9.5 million barrels of oil from the Government of Iraq. Mr. Kaspereit
used a France-based shell company, European Oil and Trading Company (“E.O.T.C.”), to enter
into SOMO contracts to purchase oil under the Programme. Marc Rich + Co. Investment A.G.
(“Marc Rich + Co.”) financed four million barrels of oil under E.O.T.C.’s contract in Phase IX.
Marc Rich + Co. directed BNP Paris not to disclose its identity to BNP New York in connection
with its financing of the United Nations contract. 105
Surcharges were imposed on the oil lifted by Marc Rich + Co. Mr. Kaspereit was aware that
E.O.T.C. paid the surcharges levied on its contracts. His associate made the actual payments.
According to an individual familiar with the companies, E.O.T.C. and Marc Rich + Co. agreed
that the premium paid to E.O.T.C. would cover a commission and surcharge. The premium paid
by Marc Rich + Co. of $0.30 to $0.40 per barrel was sufficiently high to cover both.
1. Background
In 1998, after unsuccessful attempts to participate in the Programme by trading pharmaceuticals
and cosmetic goods, Mr. Kaspereit established E.O.T.C. to trade Iraqi crude oil. In June 2000,
Mr. Kaspereit arranged to charter a flight to Iraq, without United Nations authorization and in
violation of the embargo, to generate publicity against the sanctions. This attracted the attention
of the Iraqi leadership. Mr. Kaspereit invited several French activists known for their opposition
to sanctions to join him on his flight to Baghdad, which took place in November 2000. His
delegation was well-received by the leadership in Baghdad. Mr. Kaspereit later sent letters to a
number of senior Iraqi officials, including Mr. Aziz, the Oil Minister, and SOMO Executive
Director, thanking them for their warm reception. He requested that Mr. Aziz and Mr. Rashid
convey to Saddam Hussein the group’s solidarity with the Iraqi people and their support for
Saddam Hussein’s political action. 106
104 Confidential source; Elias Firzli interview (Oct. 14, 2005); Committee oil surcharge table, contract nos.
M/10/82 and M/10/84.
105 Confidential source; Qui est Qui en France (36 th Ed.) (Jacques Lafitte S.A., 2004) (translated from
French), p. 1106.
106 Confidential source; “French plane lands in Baghdad in defiance of UN air embargo,” Agence France
Presse, Nov. 7, 2000; “Second embargo-breaking flight leaves Paris for Baghdad,” Agence France Presse,
Nov. 7, 2000 (indicating that Mr. Kaspereit’s guests included, among others, Jany Le Pen, the President of
the association SOS Enfants d’Irak and wife of National Front President Jean-Marie Le Pen); “Le site
official de l’assocation S.O.S. Enfants d’Irak,” http://www.sosenfantsdirak.org; Qui est Qui en France (36 th
Ed.) (Jacques Lafitte S.A., 2004) (translated from French), p. 1253; “Le Pen’s Wife Supports Sanctions-
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