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 introduced Mr. Bionda to Father Benjamin, and the two developed a friendship. In 2001, Father Benjamin asked Mr. Bionda to deliver a letter from Pope John Paul II to Mr. Aziz. 187 Mr. Bionda admitted that during one of their trips into Iraq in 2001, he persuaded Father Benjamin to “accompany him in soliciting Aziz for an oil allocation.” Father Benjamin also acknowledged that Mr. Bionda had made this request and that he had joined Mr. Bionda in a meeting with Mr. Aziz. However, Father Benjamin stated that he merely told Mr. Aziz that Mr. Bionda was a “good man.” An Iraqi official involved in allocations at the time confirmed that Father Benjamin did not request an oil allocation. Ministry of Oil records show that, following this meeting with Mr. Aziz, an allocation of two million barrels was granted in Father Benjamin’s name and sold by Mr. Bionda. Father Benjamin and Mr. Bionda denied that Mr. Bionda promised money to Father Benjamin in exchange for this allocation of oil. Mr. Bionda stated that Father Benjamin did not want anything to do with the oil. 188 2. The Oil Contract and Surcharge Payment Mr. Bionda stated that Father Benjamin called him one morning in September 2001 to inform him that the oil allocation had been approved for Zyrya Management Services. To finance, lift, and trade the oil, Mr. Bionda negotiated an arrangement with Ben Pollner and Amr Bibi of the Taurus Group in London. They agreed on a premium of $0.40 per barrel. Mr. Bionda signed the contract using his own company, Zyrya Management Services. Taurus financed the letter of credit issued in the name of Zyrya Management Services, arranged for the lifting of the oil, and instructed Mr. Bionda to inform SOMO of the name of the vessel that had been chartered. Bank records show that, between December 2001 and March 2002, Taurus made three wire transfers totaling approximately $811,886 to Mr. Bionda. Taurus is discussed below in Section VI.C. 189 Ministry of Oil records reflect that a surcharge totaling $616,375 was imposed on the oil lifted through Taurus. This surcharge was paid in two separate transactions. Bank records indicate that the first payment of approximately $60,000 was transferred from a bank account associated with Taurus to a SOMO bank account. Ministry of Oil records show the wire transfer was applied to the surcharges owed on contract M/10/80. Bank records show that, on January 21, 2002, the $556,414.80 in remaining surcharges was transferred out of Mr. Bionda’s bank account at the Jordan National Bank. On that same day, records show a $556,414.80 deposit into a SOMO account at Jordan National Bank, which referenced Alain Bionda as the source of the deposit. Ministry of Oil records show that the money was used to satisfy the surcharge balance on contract 187 Alain Bionda interviews (Dec. 13-14, 2004 and Sept. 16, 2005); Jean-Marie Benjamin interview (Jan. 21, 2005). 188 Tariq Aziz interview (Aug. 16, 2005); Alain Bionda interviews (Dec. 13-14, 2004 and Sept. 16, 2005); Jean-Marie Benjamin interview (Jan. 21, 2005); SOMO oil allocation table for Phase X (Aug. 4, 2001) (translated from Arabic); see also Alain Bionda written statement (Dec. 15, 2004); Committee oil beneficiary and company table, contract no. M/10/80. 189 Ibid.; Alain Bionda interviews (Dec. 13-14, 2004 and Sept. 16, 2005); Confidential document. REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 100 OF 623
INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME REPORT ON PROGRAMME MANIPULATION CHAPTER TWO OIL TRANSACTIONS AND ILLICIT PAYMENTS M/10/80. When initially interviewed, Mr. Bionda denied having an account in Jordan. In a later interview, however, he admitted having this bank account at Jordan National Bank. 190 When interviewed, Mr. Bionda denied paying or agreeing to pay surcharges. He acknowledged that he was well aware that surcharges were being demanded by the Iraqi regime. Mr. Bionda stated that he hired an Iraqi agent to coordinate his Iraqi oil transactions and had the agent sign a contractual provision disclaiming any involvement in the payment of surcharges. Mr. Bionda did not produce a copy of this agreement. Mr. Bionda remarked: “If the agent did something illegal that was his problem.” He acknowledged, however, that he was aware that companies were hiring agents for the purpose of paying surcharges and requiring them to sign similar disclaimers. 191 3. Donation to Father Benjamin After receiving money from the sale of the oil, Mr. Bionda stated that he felt a moral obligation to donate some of it to Father Benjamin. On December 27, 2001, Mr. Bionda transferred $140,000 from the oil proceeds to Father Benjamin’s account at UBS Geneva. The same day that the money was deposited, Father Benjamin transferred $90,000 to his personal account at the Vatican Bank, Istituto per le Opere di Religione, and another $20,150 and CHF5,000 was withdrawn in cash. In June 2002, Father Benjamin withdrew $18,025 in banknotes from this account. The remaining money could not be traced. 192 Mr. Bionda denied that Father Benjamin requested this payment or that they had agreed to share the oil proceeds. Father Benjamin also denied having any agreement with Mr. Bionda about the sale of the oil or any knowledge of the source of this donation. Father Benjamin admitted that he received money from Mr. Bionda, but claimed that the donation was made by an individual, and “not made by an oil company of another trader” to the Beato Angelico Foundation, and that the donation was not made to him. 193 Father Benjamin provided the Committee with access to his bank records from the Istituto Opere di Religione. The records show that of the $90,000 deposited in that account, only €28,000 (approximately $24,734) was transferred directly to the Fondazione Beato Angelico. Over €53,000 was withdrawn in banknotes. Father Benjamin stated that he needed banknotes for his activities in Iraq because the economy was cash driven. Although Father Benjamin stated that he 190 Jordan National Bank record, Alain Bionda account, bank statement (Jan. 21, 2002); Jordan National Bank record, SOMO account, credit advice (Jan. 22, 2002) and bank statement (Jan. 2002); Committee oil company table, contract no. M/10/80; Alain Bionda interviews (Dec. 13-14, 2004 and Sept. 16, 2005). 191 Alain Bionda interviews (Dec. 13-14, 2004 and Sept. 16, 2005). 192 Ibid.; UBS Geneva record, Jean-Marie Benjamin account, credit advice (Dec. 27, 2001). The credit advice had the reference of “In favour of Rev. Jean-Marie Benjamin.” Ibid. 193 Alain Bionda interviews (Dec. 13-14, 2004 and Sept. 16, 2005); Jean-Marie Benjamin letter to the Committee (June 7, 2005) (translated from French). REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 101 OF 623
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