The independent panel investigating alleged corruption in the multibillion-dollar U.N. oil-for-food program in Iraq told the Senate it won’t hand over any documents until its own investigative reports are issued starting in January.
Former Federal Reserve Chairman Paul Volcker, who heads the inquiry, also said he opposes allowing U.N. staff or contractors to testify before congressional committees, arguing that this could risk their cooperation with his investigation.
In the current highly charged atmosphere, he said, the panel wants to avoid the release of “potentially misleading and incomplete information that could impair the ongoing investigation, distort public perceptions, and violate simple concerns of due process.”
Volcker’s comments came ahead of a hearing Wednesday by the House International Relations Committee, which is investigating corruption in the oil-for-food program.
Committee investigators said they had uncovered evidence showing that Saddam Hussein diverted money from the oil-for-food program to pay millions of dollars to families of Palestinian suicide bombers who carried out attacks on Israel.
Secret bank accounts
The former Iraqi president tapped secret bank accounts in Jordan — where he collected bribes from foreign companies and individuals doing illicit business under the humanitarian program — to reward the families up to $25,000 each, investigators told The Associated Press.
The humanitarian program that let Iraq trade oil for goods was set up in 1996 to help Iraqis get food, medicine and other items that had been scarce under strict U.N. economic sanctions imposed after the Gulf War. Investigators say Saddam made more than $21.3 billion in illegal revenue under the program as well as by evading the sanctions for more than a decade.
Iraq had thousands of secret bank accounts throughout the world, including over 1,500 in Jordan. Money from kickbacks on oil-for-food deals, illegal oil payments from the Jordanian government and other illicit funds were paid into accounts held by a Jordanian branch of the Iraqi government-owned Rafidain Bank, investigators said.
Link to Palestinian bombers?
According to employees of the Iraqi Central Bank and the Rafidain Bank, the former Iraqi ambassador to Jordan, Sabah Yassen, withdrew money from the accounts to make payments ranging from $15,000 to $25,000 to the families of Palestinian suicide bombers, Hyde said.
Palestinians have said Saddam paid more than $35 million to families of Palestinians killed or wounded in the conflict with Israel that began in September 2000. Since then, Palestinians have carried out 117 suicide bombings, killing 494 Israelis and others.
Wednesday’s hearing will focus on a French bank that handled most of the oil-for-food money. An audit by a U.S. regulatory agency of a small sample of transactions out of the $60 billion U.N. escrow account managed by BNP-Paribas has raised serious questions concerning the bank’s compliance with U.S. money laundering laws, investigators said.
“There are indications that the bank may have been noncompliant in administering the oil-for-food program,” said Henry Hyde, chairman of the committee. “If true, these possible banking lapses may have facilitated Saddam Hussein’s manipulation and corruption of the program.”
While acknowledging that U.S. regulators have raised routine issues with BNP on compliance with banking laws, a lawyer for BNP said Hyde’s statement was unfair.
“No departure from any standard caused or contributed in any way to the abuse at the oil-for-food program,” the bank’s lead council Robert S. Bennett said. “There are simply no connections.”
BNP held the sole escrow account through which all of the more than $60 billion of Iraqi oil revenues generated through the program flowed while it was in place from 1996 to 2003.
BNP also wrote letters of credit for deals for the import of humanitarian goods which were approved by the United Nations and paid for out of the escrow account.
Push for U.N. documents
Five congressional panels, including Hyde’s, have been pressing the U.N.-appointed independent inquiry to hand over internal U.N. documents for their own oil-for-food probes.
On Tuesday, Volcker reiterated his independent inquiry’s refusal to share documents in a letter responding to a request by Sen. Norm Coleman, R-Minn. and Carl Levin, D-Mich.
Volcker, who was appointed in April by U.N. Secretary-General Kofi Annan to chair the Independent Inquiry Committee, said the United Nations generally does not make internal confidential information available to any of its 191 member states or their investigations.
Volcker expressed concern about the congressional panels’ apparent desire to require U.N. personnel and experts it had contracts with to appear before its investigators, “apparently asking them to forego their United Nations immunities.”
“For a U.N. official to appear before the subcommittee in the current, highly charged environment, would plainly risk ending prospects for their cooperation with our committee and with subsequent potential criminal investigations,” he said.
Volcker said his committee aims to complete “a definitive report” on the internal management of the oil-for-food program by the middle of 2005, and is planning one or more interim reports, including one as soon as January.
When his final report is released, Volcker said he expects it will be accompanied “by release of substantially all documents relevant to those findings in the committee possession.”