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 month, the DFA issued a statement that Mr. Pahad would visit Iraq to represent South Africa at the annual Baghdad International Trade Fair in November. During his visit, Mr. Pahad <strong>report</strong>edly met with Saddam Hussein and conveyed a message to him from President Mbeki. He also met with Mr. Ramadan and Mr. Aziz, and the Foreign Minister, the Minister of Trade, and the Minister of Electricity. According to the public statement of Mr. Pahad, Saddam Hussein told South African officials that he would instruct his ministers to “observe special care” with respect to economic, technical, and scientific relations with South Africa. 200 Mr. Aziz perceived that South Africa could be supportive of Iraq. During his July 2002 official visit of Mr. Aziz to South Africa, Mr. Aziz attended a farewell dinner hosted by the ANC with members of South Africa-Iraq Friendship Association (“SAIFA”) and the business community at the Cabanga Conference Center, which was funded by Imvume, which—as described below— had been purchasing oil from Iraq under the Programme. In October 2002, during a United Nations weapons inspection crisis, NAM supported the Security Council’s efforts to explore a peaceful resolution to the situation. NAM issued a statement calling for inspectors to return to Iraq. That month, South Africa dispatched Mr. Pahad for discussions with China, Russia, and France concerning Iraq, and similar discussions with those countries occurred one month later. In January 2003, Mr. Pahad traveled to Italy, Belgium, United Arab Emirates, Bahrain, Iran, Yemen, and Saudi Arabia to discuss Iraq and to present the views of South Africa and NAM. As chair of NAM, South Africa successfully called for three emergency Security Council meetings to broaden the debate on Iraq and included non-Security Council members so that Council members could hear the views of the wider United Nations membership before adopting a resolution. During February 2003, South Africa dispatched its own team of weapons inspectors to Iraq to supplement the efforts of UNMOVIC inspectors. This action was designed to demonstrate that weapons inspections were still possible and that Iraq was prepared to cooperate with them, thereby negating a key justification for war. When war broke out in Iraq in March 2003, Kgalema Motlanthe, Secretary-General of the ANC, assured Iraq of the ANC’s support for all “efforts to end the unilateral aggression of the United States and other countries.” 201 200 South African Government Information, “Statement On The Visit To Iraq By A Delegation Of Senior Officials From The Department Of Foreign Affairs, 17 October 2002,” http://www.info.gov/za/speeches/ 2002/02101809461002.htm. 201 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; Standard Bank record, Imvume Management account, check paid to “Cabanga” in the amount of R40,311.80 (Aug. 6, 2002) (equating to $3,858); SOMO sales contract, no. M/12/78 (July 27, 2002) (contracting with Imvume Management); Committee oil surcharge table, contract no. M/12/78; Non-Aligned movement (“NAM”), “Letter Concerning Iraq to the President of the UN Security Council by South Africa's Permanent Representative to the UN, Ambassador DS Kumalo, on Behalf of the NAM,” http://www.nam.gov.za/ media/020810ir.htm; South African Government Information, “The Deputy Minister Of Foreign Affairs Meets With The Ambassadors Of China, The Russian Federation, And The Charge D’Affaires Of France, Pretoria, 4 October 2002,” http://www.info.gov.za/speeches/2002/ 02100414461002.htm; South African Government Information, “Deputy Minister Aziz Pahad To Visit Italy, Belgium, The United Arab Emirates, Bahrain, The Islamic Republic Of Iran, Yemen And Saudi Arabia,” http://www.info.gov.za/ speeches/2003/ 03012010461001.htm; South African Government Information, “Media Alert,” REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 104 OF 623
INDEPENDENT INQUIRY COMMITTEE INTO THE UNITED NATIONS OIL-FOR-FOOD PROGRAMME REPORT ON PROGRAMME MANIPULATION CHAPTER TWO OIL TRANSACTIONS AND ILLICIT PAYMENTS One of the areas in which the political and commercial interests of South Africa and Iraq coincided was in the Oil-for-Food Programme. During the Programme, two South African companies that profited from Iraq’s efforts to deliver business opportunities to South Africa in return for political support were Montega Trading and Imvume. South African businessmen formed the companies to take advantage of the oil contracts available under the Programme, and they were able to obtain a total of eight million barrels of oil in allocations. 1. Montega Trading (Pty) Limited An Iraqi-American, Shakir Al-Khafaji, helped facilitate the granting of oil allocations to Sandi Majali, a self-proclaimed advisor to the ANC and President Mbeki, through his joint venture with Mr. Majali and Rodney Hemphill, a South African businessman, called Montega Trading Limited. Mr. Al-Khafaji had access to Mr. Aziz; indeed, Mr. Aziz specifically asked Mr. Al- Khafaji to help strengthen the ties between Iraq and South Africa. In December 2000, Mr. Al- Khafaji travelled to Baghdad with Mr. Majali and Mr. Hemphill to meet with Iraqi officials. During their meetings in Iraq, Mr. Majali described himself as an advisor to both the ANC and President Mbeki. After several days of meetings, Mr. Majali was allocated two million barrels of oil. The SOMO contract of approval explicitly referenced “Sandi Majali—Advisor to the President of South Africa.” 202 http://www.info.gov.za/ speeches/2003/ 03020309461003.htm; Provisional record of Security Council meeting, S/PV.4625 (Oct. 16, 2002); Provisional record of Security Council meeting, S/PV.4709 (Feb. 13, 2003); Provisional record of Security Council meeting, S/PV.4717 (Mar. 11, 2003); African National Congress, “ANC On Latest Developments In The War Against Iraq,” http://www.anc.org.za/ancdocs/pr/ 2003/pr0326d.html (Mar. 26, 2003). 202 Rodney Hemphill interview (July 4, 2005); Sandi Majali interview (June 30, 2005); Iraq official interview; SOMO sales contract, no. M/09/06 (Dec. 21, 2000) (contracting with Montega Trading) (hereinafter “Majali sales contract”); Deloitte & Touche Corporate Finance Ltd. due diligence review (Jan. 2002) (based on their interview of Mr. Majali et al. on Jan. 23, 2001); SOMO letter to Amer Rashid (Dec. 25, 2000) (approving contract M/09/06 for 2 million barrels of oil for “Mr. Sandi Majali – Advisor to the President of South Africa”) (translated from Arabic) (hereinafter “Approval letter for Majali contract”). REPORT ON PROGRAMME MANIPULATION–OCTOBER 27, 2005 PAGE 105 OF 623
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