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 was preparing an accounting of his Iraq-related expenses, the Committee has not received this accounting. Father Benjamin stated that some of the money was used to finance Mr. Aziz’s visit to the Vatican in conjunction with an audience with Pope John Paul II in 2003. 194 In January 2002, when he was offered an additional oil allocation to support his “activities and projects in favor of the Iraqi population,” Father Benjamin told officials at SOMO and Mr. Aziz, both in person and by letter, that he could not accept any oil allocations. Ministry of Oil records confirm that, although oil allocations totaling 5.5 million barrels were granted to Father Benjamin in Phases XI through XIII, none of the oil was lifted. 195 4. Additional Oil Contracts for Mr. Bionda Mr. Bionda continued to trade in Iraqi oil through the end of the Programme. In Phases XI and XIII, Mr. Bionda purchased a total of two million barrels that had been allocated in the name of Abdul Qader Bin-Moussa of the National Society for Algerian Zawya. In Phase XI, Mr. Bionda sold the oil to TOTSA Total Oil Trading SA (“Total”). Total financed the oil purchase, arranged for lifting the oil, and paid Mr. Bionda a commission. Ministry of Oil records show that approximately $250,000 in surcharges was imposed and paid on the contract. The surcharges were paid through two deposits in a SOMO bank account, and each payment referenced “Alain Bionda.” 196 Mr. Bionda said that this allocation was obtained by his agent, Mohammad Abdul Kareem Ali. Mr. Bionda did not know who the allocation holder was nor did he pay a premium directly to the allocation holder. Mr. Ali denied paying the surcharge and stated that Mr. Bionda paid it himself. In the interview, Mr. Bionda indicated that he had knowledge of the surcharges on these contracts. He volunteered that a surcharge had not been required on the last allocation he had purchased in 2003, and, for that reason, he had paid his agent a lower commission. 197 194 Alain Bionda interviews (Dec. 13-14, 2004 and Sept. 16, 2005); Jean-Marie Benjamin letters to the Committee (Jan. 28, June 7, and Oct. 12, 2005); Jean-Marie Benjamin e-mails to the Committee (Oct. 13 and Oct. 21, 2005). 195 Jean-Marie Benjamin letter to Tariq Aziz (Jan. 25, 2002); Alain Bionda interviews (Dec. 13-14, 2004); Jean-Marie Benjamin letter to the Committee (Jan. 28, 2005); SOMO oil allocation tables for Phase XI (Dec. 1, 2001), Phase XII (May 19, 2002), and Phase XIII (Nov. 17, 2002) (translated from Arabic). 196 Committee oil beneficiary table, contract nos. M/11/113, M/13/83; Alain Bionda interviews (Dec. 13- 14, 2004 and Sept. 16, 2005); Committee oil company table, contract no. M/11/13; Jordan National Bank record, SOMO account, credit advices (Mar. 28 and July 8, 2002). 197 Committee oil beneficiary table, contract nos. M/11/113, M/13/83; Mohammed Abdul Karim Ali interview (June 23, 2005); Alain Bionda interviews (Dec. 13-14, 2004); Iraq official interview. REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 102 OF 623
INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME REPORT ON PROGRAMME MANIPULATION CHAPTER TWO OIL TRANSACTIONS AND ILLICIT PAYMENTS D. SANDI MAJALI One example in the Programme of exploitation of the symbiotic relationship between a country’s closely aligned political and business figures and the Government of Iraq, is that of Montega Trading (Pty) Limited (“Montega Trading”) and Imvume Management (Pty) Ltd. (“Imvume”). As described below, the principals of these two companies used their relationships with South African political leaders to obtain oil allocations under the Programme. Throughout the Programme, South Africa and Iraq were actively developing business and political ties. In late November 1999, South Africa’s Deputy Foreign Minister Aziz Pahad led a delegation of 30 South African companies with interests in oil, electricity, and other sectors to Iraq. One purpose of the visit was “to expose South African businesses with already established interests in the so-called ‘oil-for-food’ programme with Iraq to the processes involved in winning such UN-approved contracts.” 198 Deputy Prime Minister Tariq Aziz and other Iraqi officials were also interested in gaining the political support of South Africa and its leaders. At the time, South Africa chaired several influential political alliances. South African President Thabo Mbeki was Chair of the Non- Aligned Movement (“NAM”) and had been the President of South Africa’s ruling party, the African National Congress (“ANC”), since 1997. He was also Chairman of the African Union. Within weeks after Mr. Pahad returned from his trip, Iraq established its Embassy in Pretoria, and, by 2001, Iraq had accredited a full Ambassador to South Africa using Iraqi funds that had been frozen until then. 199 South African officials also pushed to improve trade relations. In October 2002, the South African Department of Foreign Affairs (“DFA”) sent a delegation of senior officials to Iraq. Both sides <strong>report</strong>edly expressed satisfaction with the state of relations between their respective countries, which had been boosted by Mr. Aziz’s then recent visit to South Africa. Later that 198 South African Government Information, “The Official Visit To South Africa By The Deputy Prime Minister Of Iraq,” http://www.info.gov.za/speeches/2002/02070309461011.htm; Iraq official interview; South Africa official #1 interview (July 5, 2005); South African Government Information, “Statement On Visit By Deputy Foreign Minister Aziz Pahad To The Middle East,” http://www.info.gov.za/speeches/1999/ 991122116p1005.htm. 199 South African Government Information, “The Official Visit To South Africa By The Deputy Prime Minister Of Iraq,” http://www.info.gov.za/speeches/2002/02070309461011.htm; Iraq official interview; South Africa #1 official interview (July 5, 2005); South African Government Information, “Statement On Visit By Deputy Foreign Minister Aziz Pahad To The Middle East,” http://www.info.gov.za/speeches/ 1999/991122116p1005.htm; Iraq official interview; African National Congress, “Address by the Chairperson of the Non-Aligned Movement, President Thabo Mbeki of South Africa, to the NAM Ministerial Meeting, September 23, 1999,” http://www.anc.org.za/ancdocs/history/mbeki/1999/ tm0923.html; Republic of South Africa Department of Foreign Affairs, “Iraq (Republic of),” http://www.dfa.gov.za/foreign/bilateral/iraq.html; South African Government Information, “Statement By Deputy Minister Of Foreign Affairs, Mr. Aziz Pahad, On The South African Humanitarian Flight To Iraq On 22 To 25 February 2001,” http://www.info.gov.za/speeches/2001/0102121145a1001.htm. REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 103 OF 623
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