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 During the next ten phases of the Programme, Mr. Boidevaix was granted allocations totaling approximately 35.1 million barrels. 125 Under his agreement with Vitol, Mr. Boidevaix assisted the company in obtaining crude oil contracts. Mr. Boidevaix was given the title of “President of Vitol-France,” an entity that did not exist. He signed SOMO contracts as the President of Vitol France, “for and on behalf of Vitol, Geneva, Switzerland.” Mr. Boidevaix played no role in the http://france.irak.free.fr/pages/action1.htm#top (indicating that Mr. Boidevaix was a speaker at both conferences). During the sanctions on Iraq, Mr. Boidevaix was also a member of the Support Committee of the Association Etudiants Contre l’Embargo (Association of Students Against the Embargo) (translated from French). L’Association Ensemble Contre l’Embargo, “Qui Sommes-Nous,” http://france.irak.free.fr/pages/association.htm. Ms. D’Alessandro did not know the subject of the private conversation between Mr. Aziz and Mr. Boidevaix. Robin D’Alessandro interview (Oct. 10, 2005). Other Iraqi officials have also confirmed that Mr. Boidevaix was a friend of Mr. Aziz who received political allocations. Saddam Z. Hassan interview (Mar. 9, 2005) (stating that Mr. Boidevaix had a friendship with Mr. Aziz and that Mr. Boidevaix visited SOMO as the head of Vitol France); Iraq official interviews (stating that Mr. Boidevaix nominated Vitol to lift his oil allocations and that he represented Vitol in France, but it was understood that the allocations to Mr. Boidevaix were political). When interviewed by a journalist in early 2005, Mr. Boidevaix stated that he “always worked on behalf of Vitol,” and that “the company had allocations, not me personally.” Alan Freeman, “Hussein’s oil flowed to Canada; Controversial Iraqi crude was refined at Come By Chance, Alan Freeman discovers,” The Globe and Mail, Feb. 4, 2005, p. A1. 125 Committee oil beneficiary table, contract nos. M/04/08, M/05/36, M/06/40, M/07/30, M/08/34, M/09/97, M/10/78, M/13/74. Mr. Boidevaix received oil allocations from Phases IV through XIII (no contract was executed for his allocations in Phases XI or XII) and his oil allocations were classified under the Government of Iraq’s category of special requests for France. SOMO letters to Amer Rashid (June 6, 1998) (approving contract M/04/08 for 2 million barrels of oil for Vitol “(Mr. Boidevaix the former French official)”), (June 8, 1998) (approving contract M/04/16 for 400,000 barrels of oil for Vitol “(Mr. Boidevaix the former French official)”), (June 20, 1998) (approving an increase in Vitol’s Phase IV allocation to 4.6 million barrels), (Dec. 28, 1998) (approving contract M/05/36 for 3.5 million barrels of oil for Vitol “Mr. Boidevaix—the former French official”), (June 3, 1999) (approving contract M/06/40 for 5 million barrels of oil for Vitol “Mr. Boidevaix—the former French official”), (Dec. 29, 1999) (approving contract M/07/30 for 1.5 million barrels of oil for Vitol “(Mr. Boidevaix)”), (Apr. 5, 2001) (approving contract M/09/97 for 2 million barrels of oil for Vitol (stating “with reference to your Excellency’s approval (during your meeting with Mr. Boidevaix in Vienna on the side of the recent Ministerial meeting of OPEC)”), (Sept. 9, 2001) (approving contract M/10/78 for 1 million barrels of oil for Vitol “(Boidevaix, French)”), (Jan. 11, 2003) (approving contract M/13/74 for 5 million barrels of oil for Vitol “Name of Owner of Allocation: Mr. Boidevaix”) (translated from Arabic) (hereinafter “Approval letters for Boidevaix contracts”); SOMO oil allocation tables for Phase IV (Nov. 6, 1998) (indicating an allocation of 5 million barrels of oil for “Vitol (Boidevaix)”), Phase V (Nov. 28, 1998) (indicating an allocation of 5 million barrels of oil for “Vitol (Boidevaix)”), Phase VI (undated) (indicating an allocation of 5 million barrels of oil for “Boidevaix”), Phase VII (Dec. 17, 1999) (indicating an allocation of 1.5 million barrels of oil for “Boidevaix”), Phase VIII (June 14, 2000) (indicating an allocation of 1.5 million barrels of oil for “Boidevaix”), Phase X (Aug. 4, 2001) (indicating an allocation of 2 million barrels of oil for “Boidevaix”), Phase XI (Dec. 1, 2001) (indicating an allocation of 1.5 million barrels of oil for “Boidevaix/Vitol”), Phase XII (May 19, 2002) (indicating an allocation of 1.5 million barrels of oil for “Boidevaix/Vitol”), Phase XIII (Nov. 17, 2002) (indicating an allocation of 1 million barrels of oil for “Boidevaix/Vitol”) (translated from Arabic) (hereinafter “SOMO oil allocation tables for Boidevaix”). REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 70 OF 623
INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME REPORT ON PROGRAMME MANIPULATION CHAPTER TWO OIL TRANSACTIONS AND ILLICIT PAYMENTS oil transactions other than securing the allocations and signing the contracts. Regular communication with SOMO was directly conducted by Vitol. Correspondence sent by Mr. Boidevaix was prepared by Vitol. Though Mr. Boidevaix has insisted that only 22 million barrels of oil were lifted under his allocations, Ministry of Oil records show that 29.5 million barrels of oil were lifted. 126 Vitol paid Mr. Boidevaix a fee of $30,000 per phase, in addition to $0.01 per barrel, which was later raised to $0.03 per barrel for all barrels after Vitol had lifted three million barrels of oil. Mr. Boidevaix received a total of $367,808.77 in commissions from Vitol for the period between Phases VIII and XII. 127 Mr. Boidevaix admitted that he was aware that the Iraqi regime had imposed surcharges on oil contracts. According to Mr. Boidevaix, at an OPEC meeting in Vienna in 2001, during Phase IX, SOMO officials informed him of the requirement to pay surcharges and warned him that without paying the surcharges Vitol would not be able to sign further contracts. Mr. Boidevaix stated that he informed Vitol of this conversation and advised the company not to pay the illegal surcharges. 126 Vitol record, Vitol consultancy agreement with S.B. Consultants (Apr. 27, 1998); Serge Boidevaix interview (Oct. 4, 2005) (stating that his communication with SOMO was through Ms. D’Alessandro, in London, and Roland Favre, in Geneva, and that he rarely called SOMO, and only when directed to do so by Vitol); Serge Boidevaix business card (the address and telephone number on this Vitol business card for “Serge Boidevaix, President—France,” had the address and telephone number for Mr. Boidevaix’s residence from where he operated his consulting business); Robin D’Alessandro interview (Oct. 10, 2005) (confirming that Vitol-France did not exist, and the name was created to give a “French angle” to Vitol S.A., and that the business cards were provided by Vitol S.A.); SOMO sales contracts, nos. M/04/08 (June 4, 1998), M/05/36 (Dec. 22, 1998), M/06/40 (June 1, 1999), M/07/30 (Dec. 15, 1999), M/08/34 (June 26, 2000), M/09/97 (Apr. 3, 2001), M/10/78 (Sept. 4, 2001), M/13/74 (Jan. 9, 2003) (contracting with Vitol) (signed “For Buyer Serge Boidevaix, President/Vitol-France on behalf of Vitol S.A. Geneva-Switzerland” or “Serge Boidevaix, President/Vitol-France for and on behalf of Vitol S.A. Geneva-Switzerland”) (hereinafter “Boidevaix sales contracts”); Jean-René Farthouat and Nathalie Roret letter to the Committee (Oct. 17, 2005); Committee oil beneficiary table, contract nos. M/04/08, M/05/36, M/06/40, M/07/30, M/08/34, M/09/97, M/10/78, M/13/74. Jean-René Farthouat and Nathalie Roret are counsel for Mr. Boidevaix. 127 Robin D’Alessandro interview (Oct. 10, 2005) (stating that Mr. Boidevaix was paid $60,000 annually); Vitol record, Vitol consultancy agreement with S.B. Consultants, art. 5 (Apr. 27, 1998); Attachment to Vitol letter to State Secretariat for Economic Affairs (Switzerland) (Aug. 11, 2005) (list of payments from Vitol to Mr. Boidevaix between Phases VIII and XII). This calculation does not include the commission paid for the Phase XIII contract for 8.9 million barrels. Mr. Boidevaix confirmed the list of payments provided by Vitol and acknowledged that Vitol honored this agreement. Serge Boidevaix interview (Oct. 4, 2005). Mr. Boidevaix only referred to the original agreement between him and Vitol, without referring to the late increase in his commission to $0.03 per barrel. Ms. D’Alessandro, however, indicated that the agreement was later amended without being documented, and remained in place until 2004. The payments between Phases VIII and XII confirm the increase in the commission. Ibid.; Robin D’Alessandro interview (Oct. 10, 2005). REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 71 OF 623
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