Volume 1 - Iraq Watch

Figure 10. Iraq’s estimated earnings from the JordanProtocol (million US $).Figure 11. Iraq’s estimated earnings from the SyriaProtocol (million US $).Regime Financeand ProcurementFigure 12. Iraq’s estimated earnings from the TurkeyProtocol (million US $).• Iraq charged Turkey roughly $6 less than the authorizedprice for crude under the UN OFF program.The low price served as an incentive for Turkey toparticipate in the scheme.• Under the Turkish agreement, 70 percent ($497million) of Iraq’s earnings were to be depositedinto an account at the Turkey Halk Bankasi A.S.The account was under the name of TPIC, but thecontrol of SOMO. This account was to be used bySOMO to pay Turkish companies for goods andservices delivered and rendered to Iraqi organizations.• According to a senior SOMO official, some of thesefunds were transferred to interest bearing accounts.As of January 2004, SOMO held $157 million inthese accounts and had earned almost $7.7 millionin interest since October 2000.• Iraqi statements about the amount of cash depositedare inconsistent, but the best information indicatesthe remaining 30 percent in cash ($213 million) wasdeposited in a SOMO account at the Saradar Bankin Lebanon. Some of these funds may eventuallyhave been transferred to a CBI account at the SyrianLebanese Commercial Bank. SOMO eventuallytransferred the money to CBI accounts in Baghdad,possibly by courier.• Iraqi statements about cash deposits are againinconsistent, but a SOMO foreign account balancesheet showed the TPIC (70 percent) accountcontaining over $195 million just prior to OIF.Another report states Turkish entities owes Iraq$265 million but also mentions an account balancein January 2004 of $234 million. At least in thecase of the $234 million, the accounting includedboth the Protocol credit account ($52 million) andsome savings accounts ($182 million). If 70 percent($497 million) of Iraq’s total earnings of $710million were deposited in this account, and $195million (assuming the lower figure) was remainingat the end of the war, Iraq would have spent about$302 million on Turkish goods and reexports underthe Protocol agreement. The value of contractssigned using SOMO accounts amounted to $303.5million according to SOMO records. Some of thesecontracts almost certainly were not completed priorto OIF.Egypt Trade Protocol. Iraq and Egypt participatedin a relatively short-lived Protocol from late 2001 toearly 2002. We do not have access to documents outliningthis agreement, but, according to a senior Iraqiofficial, the deal involved the MIC-related company,Al-Husan.27