IRAQ WAR - LOOKING GLASS NEWS
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US 'approved' oil smuggling
by Claudia Parsons    news.com.au
Entered into the database on Sunday, September 11th, 2005 @ 13:33:01 MST


 

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The largest oil consignment smuggled out of Iraq took place with US approval just weeks before the April 2003 invasion, according to a United Nations report.

The Independent Inquiry Committee has spent the past year examining the now defunct UN oil-for-food program.

The report blamed UN officials and the Security Council for mismanagement that allowed former leader Saddam Hussein to divert more than $10 billion from kickbacks and smuggling.

But it also faulted the United States and other Security Council members for ignoring violations of UN sanctions.

All funds raised from the sale of the oil was supposed to be used to buy humanitarian goods.

The aim of the program was to alleviate the the impact on ordinary Iraqis of sanctions imposed in mid-1990 when Saddam invaded Kuwait.

While US Navy ships were patrolling the Gulf in February 2003, making a show of boarding and searching leaky dhows and small ships, they turned a blind eye to tankers carrying $54 million of Iraqi oil under the scheme on Jordan's behalf, the report said.

A total of 7.7 million barrels of oil was smuggled through the Khor al-Amaya oil terminal in at least seven shipments in February and March 2003, it said.

The sales were arranged by a businessman in Jordan named "Mr Shaheen" who told an Iraqi official he had "the Pentagon in one pocket and the CIA in the other."

The oil was bought at a heavily discounted price of around $7 a barrel, the report said.

If it had been sold at fair market value within the oil-for-food program, it could have earned $200 million to buy humanitarian goods.

"The illegal sales of oil from Khor al-Amaya came at a staggering cost to the program in terms of potential revenue foregone," the report said.

The 1,000-page report showed shipping records from a tanker included instructions for the ship's captain saying the US Navy was "already aware about your passage and itinerary."

The investigation said the smuggling in early 2003 was "the single largest episode of oil smuggling" under the oil-for-food program and occurred "with the approval of the United States government."

"The governments of Jordan and the United States have declined the Committee's requests for interviews and information concerning the smuggling of oil from Khor al-Amaya," the report said.

Earlier this year the chief of staff for the US mission to the United Nations admitted Iraqi oil sales with Turkey and Jordan at the time violated UN sanctions.

"We recognised that both countries were acutely vulnerable to a cutoff of their trade with Iraq and that our strategic interests on balance argued against exposing them to that risk," Thomas Schweich said.