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
was being used to support the activities of the Mariam Appeal or that the allocations were for
“George.” 147
Augusto Giangrandi, a trader for Bayoil and Italtech, discussed below in Section VI.B, stated that
he had conversations with Mr. Galloway in Baghdad about oil sales under the Programme. While
Mr. Galloway did not state explicitly to Mr. Giangrandi that he had received any oil allocations,
over the course of informal meetings Mr. Galloway asked him to explain how the oil allocation
process worked financially and how commissions were negotiated. Mr. Giangrandi encouraged
Mr. Galloway to seek an oil allocation and gave Mr. Galloway his business card. Mr. Giangrandi
had hired an Iraqi agent to provide information on potential allocation holders through his
contacts at SOMO. Mr. Giangrandi inquired about Mr. Galloway through this agent and heard
that oil had been given to “Abu Mariam” (as Mr. Galloway was known) and that Fawaz Zureikat
was acting as his representative. Mr. Giangrandi subsequently attempted to negotiate the
purchase of oil with Mr. Zureikat. The deal fell through when Mr. Zureikat <strong>report</strong>ed that “his
friend” had received a better offer from another company. Mr. Galloway has described this as a
“cock and bull story.” 148
When asked about Mr. Giangrandi, Mr. Zureikat initially denied knowing him. Only when Mr.
Zureikat was told that Mr. Giangrandi claimed to have met with him, did he acknowledge the
meeting. Nevertheless, Mr. Zureikat stated that the meeting had lasted about five minutes, and he
denied doing business with Mr. Giangrandi. 149
3. Surcharge Payments
Between Phases VIII and XII, Aredio and ASI Middle East Advanced Semiconductor Inc.
(“Middle East Advanced Semiconductor”), Mr. Zureikat’s company which specialized in
supplying electronic parts and had extensive commercial interests in Iraq, purchased
approximately 11 million barrels of oil related to the allocations for Mr. Galloway and Mr.
Zureikat (designated as “United Kingdom” allocations). Some of the oil contracts were financed
by Taurus, which also purchased and financed some of the oil (designated as “Jordan”)
allocations granted to Mr. Zureikat. Surcharges totaling $2,103,034 were levied on four contracts
corresponding to allocations for the benefit of Mr. Galloway and his campaign. 150
147 Tariq Aziz interview (Mar. 1, 2005); Iraq official interviews; Saddam Z. Hassan interview (July 28,
2005).
148 Augusto Giangrandi interviews (Apr. 25 and 27-28, and July 24-25, 2005); Confidential witness
interview; George Galloway e-mail to the Committee (Oct. 17, 2005).
149 Fawaz Zureikat interview (July 28, 2005).
150 Committee oil beneficiary and financier tables, contract nos. M/08/35, M/09/23; M/09/118, M/10/38,
M/11/04, M/11/10, M/12/14. In Phases VIII and IX, Aredio executed the contracts with SOMO to
purchase over four million barrels of Mr. Galloway’s allocations. In Phases X through XII, Middle East
Advanced Semiconductor executed the contracts with SOMO to purchase over 7.6 million barrels of Mr.
Galloway’s allocations. Aredio is affiliated with Taurus, as discussed in Section VI.C below. Mr. Zureikat
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