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 However, Mr. Munier’s relationship with Taurus was more formal than he has previously described. Mr. Munier signed a consultancy agreement with Taurus and received “advisor’s fees” to “seek [and] supply contracts in the region, with particular emphasis on Iraqi Crude under the Oil-for-Food program.” Mr. Munier was to receive $0.07 per net barrel from Taurus, and Taurus paid him over $240,000. 140 3. Surcharge Payments A total of $647,600 in surcharges was levied and paid on two of Aredio’s contracts for oil allocated to Mr. Munier in Phases X and XI. Mr. Munier stated that by 2001, he had heard about the imposition of surcharges—“everyone was talking about surcharges”—and that Iraqi officials had threatened to stop contracting with companies which refused to pay them. According to Mr. Munier, Mr. Michel informed him that Aredio had refused to pay them. Mr. Munier stated that he was never asked to pay surcharges, and he never provided a guarantee that he would pay surcharges. Mr. Munier, however, continued to receive allocations under the Programme and Aredio continued to contract with SOMO on Mr. Munier’s behalf, during the surcharge phases and until the Programme ended. 141 Mr. Schenker also assisted Mr. Munier with organizing a flight to Baghdad. AB Air Broker Center e-mail to Martin Schenker (Sept. 18, 2000) (forwarding communication indicating that Islandsflug would be willing to operate a flight from Paris to Baghdad; a handwritten note indicates that this document should be forwarded to “J-L Michel” and copied to “Mr. G. Munier”); Islandsflug e-mail to Martin Schenker (Nov. 2, 2000) (stating that Islandsflug had sent a letter to the United Nations Security Council requesting permission to fly to Baghdad and stating that Islandsflug was not willing to operate a flight to Baghdad without this permission). On February 19, 2001, Mr. Munier sent Ben Pollner of Taurus a bill for $2,700 of expenses from his trip to Baghdad from January 30, 1999 to February 10, 1999. Gilles Munier invoice to Ben Pollner (Feb. 15, 1999) (entitled “Forfait – Participation aux Frais, Voyage et séjour à Baghdad de Gilles Munier,” and listing a variety of expenses including a night at a hotel in Paris, a plane ticket from Paris to Amman, the purchase of medicines and presents, and expenses in Baghdad). Given how lucrative the oil trade was under the Programme, Mr. Munier also expressed regret that AFI and Aredio did not begin their involvement in the Programme until Phase V and that AFI had not created its own company “because we could have gotten money directly.” Gilles Munier interview (Sept. 23, 2005). 140 Confidential document. 141 Gilles Munier interview (Sept. 23, 2005); Committee oil surcharge table, contract nos. M/10/86, M/11/80, M/12/22, M/13/42; Committee oil company table, contract nos. M/10/86, M/11/80, M/12/22, M/13/42. REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 78 OF 623
INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME REPORT ON PROGRAMME MANIPULATION CHAPTER TWO OIL TRANSACTIONS AND ILLICIT PAYMENTS V. OTHER POLITICAL BENEFICIARIES A. GEORGE GALLOWAY The Government of Iraq did not give preference to companies based in the United Kingdom in determining oil allocations under the Programme. Nonetheless, a total of over 18 million barrels of oil were allocated either directly in the name of George Galloway, a member of the British Parliament, or in the name of one of his associates, Fawaz Abdullah Zureikat (“Fawaz Zureikat”), to support Mr. Galloway’s campaign against the sanctions. Mr. Zureikat was a prominent Jordanian businessman. Mr. Zureikat received commissions for handling the sale of approximately 11 million barrels that were allocated in Mr. Galloway’s name. Both Mr. Galloway and Mr. Zureikat have denied that Mr. Galloway was involved in obtaining the oil allocations or receiving any proceeds from the oil sales. Each of them has acknowledged, however, that Mr. Zureikat made large donations to the Mariam Appeal, a United Kingdom-based campaign for the lifting of sanctions against Iraq. Mr. Galloway was the founder of this organization. Mr. Galloway has denied that he was aware of the source of Mr. Zureikat’s donations. According to Iraqi officials, another oil beneficiary, Burhan Al-Chalabi, also received an allocation intended to benefit the Mariam Appeal. A portion of the profits from this allocation was deposited into an account of Mr. Galloway’s wife, Amineh Naji Daoud Abu Zayyad, who was also involved with the Mariam Appeal. 1. Background Although a critic of Saddam Hussein’s regime, Mr. Galloway became an outspoken opponent of sanctions against Iraq in the British Parliament around the late 1990s. In 1998, Mr. Galloway became the first chairman of the Mariam Appeal, an organization established to provide medical aid to Iraq and arrange for the medical treatment of one particular Iraqi child outside of Iraq. In addition to raising funds for these medical costs, the Mariam Appeal also had the broader purpose of campaigning “against sanctions in Iraq.” From 1999 through 2002, the Mariam Appeal funded Mr. Galloway’s tour of over ten countries on a double-decker bus to campaign for the ending of sanctions, as well as separate trips to a number of countries, including Jordan, the United Arab Emirates, Lebanon, Iraq, Hungary, Belgium, the United States, and Romania. 142 142 United Kingdom Parliament record, Hansard, Column 1022 (Jan. 13, 1993), Column 573 (Jan. 21, 1993), Column 726 (Dec. 13, 1993), Column 728 (Feb. 2, 1998), Columns 938-939 and 941 (Feb. 17, 1998), Columns 618-619 (Nov. 16, 1998), Columns 147, 149, 150-151, and 157 (Nov. 25, 1998), Column 1108 (Dec. 17, 1998); Charity Commission for England and Wales, “The Mariam Appeal (2004),” sec. 2 (June 28, 2004); George Galloway interview (May 16, 2005); Davenport Lyons letter to the Charity Commission for England and Wales (Apr. 13, 2004); Iraq official interview; United Kingdom Parliamentary Register of Members’ Interests (1998-1999, 2000-2001 and 2001-2002). The costs of some of these trips were also met by the Great Britain-Iraq Society. United Kingdom Parliament record, Register of Members’ Interests (2000-2001, 2001-2002, and 2002-2003). In parliamentary speeches, Mr. Galloway REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 79 OF 623
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