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
Mr. Kaspereit was also aware that the premium paid by Marc Rich + Co. covered a commission
to E.O.T.C. and the surcharge levied on the contract. According to an individual familiar with the
relationship between E.O.T.C. and Marc Rich + Co., Mr. Kaspereit’s associate at E.O.T.C., Mr.
Khalef Awad, informed his contacts at Marc Rich + Co. about the imposition of surcharges.
E.O.T.C. and Marc Rich + Co. representatives discussed the surcharges. They agreed that the
premium paid by Marc Rich + Co. would incorporate the additional cost of the surcharges. 116
In Phase IX, Marc Rich + Co. agreed to pay a $0.30 to $0.40 per barrel premium on the oil
purchased from E.O.T.C. Marc Rich + Co. wire transferred the payment to E.O.T.C.’s account at
Kredietbank. To avoid paying the surcharges directly, Mr. Kaspereit transferred a portion of the
premium to an account operated by Khalef Awad. Using funds from Marc Rich + Co., Mr.
Awad paid the surcharges on behalf of E.O.T.C. by wiring money to a SOMO account at Jordan
National Bank. 117
In Phase X, Ministry of Oil records show that a total of $501,393.75 was levied on E.O.T.C.’s
contract. E.O.T.C. paid close to the full amount of the surcharges on that contract. According to
bank records, E.O.T.C. made a single cash deposit of $497,370 to a SOMO account to cover the
surcharges on M/10/02. E.O.T.C. did not pay surcharges on other oil contracts in later phases. 118
Marc Rich + Co. has denied any involvement in the payment of surcharges. 119
E. SERGE BOIDEVAIX
Serge Boidevaix, a French consultant and former diplomat, was hired to obtain Iraqi crude oil
contracts for Vitol S.A. (“Vitol”), a Swiss company based in Geneva. He received allocations of
over 32 million barrels of oil from the Government of Iraq over ten phases. Almost 30 million
116 Confidential source. According to one senior French official, it was well known that surcharges ranged
from somewhere between $0.10 and $0.25 per barrel depending on where the oil was to be sold. France
official #6 interview (Mar. 22, 2005); see also Iraq official interview (stating that the surcharges ranged
from $0.30 to $0.25 per barrel depending on the destination of oil).
117 Marc Rich + Co. Investment AG fax to E.O.T.C. (Jan. 26, 2001) (confirming transaction dated January
25, 2001 for a purchase of 2 million barrels of oil from E.O.T.C. with lifts scheduled for February 2001)
(indicating that Marc Rich + Co. would pay E.O.T.C. a commission of $0.30 per barrel of oil); Marc Rich +
Co. Investment AG telex to E.O.T.C. (undated) (refers to “new transaction with your company” for the
purchase of 2 million barrels of oil from E.O.T.C. with lifts scheduled for April and May 2001) (indicating
that Marc Rich + Co. would pay E.O.T.C. a commission of $0.40 on the first lift of 1 million barrels of oil
and a $0.35 commission on the second lift of 1 million barrels of oil); Committee oil company table,
contract no. M/09/39; Confidential source; Jordan National Bank record, SOMO account, credit advices
(Mar. 21, Apr. 29, May 2, June 6, and Nov. 11, 2001) (translated from Arabic).
118 Committee oil surcharge table, contract nos. M/10/02, M/11/26 and M/12/62; Jordan National Bank
record, SOMO account, credit advice (Nov. 1, 2001) (translated from Arabic).
119 Marc Rich Group letter to the Committee (Oct. 24, 2005).
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