How did the oil voucher scam work?
Under the Oil-for-Food program, the United Nations was supposed to monitor and approve all of Iraq’s oil sales. All profits went into special escrow accounts that the United Nations controlled. Because the purpose of the program was to help feed and provide for the basic needs of the Iraqi people, Iraq was not permitted to buy military equipment or so-called dual-use items—items that could potentially be used in banned weapons programs—with its oil proceeds. But Iraq was given wide latitude to determine to whom it sold its oil, and was also permitted to select the vendors from which the United Nations would purchase goods with Iraqi oil profits. Saddam Hussein skimmed billions from the program by controlling these decisions.
How did Saddam Hussein choose buyers of Iraqi oil?
Iraq could sign final oil contracts only with a set number of approved “lifting” companies—major oil companies that could transport the oil. But, officially unreported to the United Nations, Saddam Hussein developed a complex internal system that moved the oil through middlemen before it got to the final buyer. The initial oil sale, the Duelfer report said, was generally to a company or individual whom Saddam wanted to influence or favor. Senior Iraqi leaders, such as former Deputy Prime Minister Tariq Aziz, and Iraqi ambassadors could nominate an individual or company to receive secret “oil vouchers”—guarantees from the regime that the holder of the voucher could buy a certain amount of oil at a set price. Iraq priced this oil below market value, so that the holder of the voucher could make a significant profit when he sold it on to another middleman or international oil company. Saddam Hussein personally approved all names on the voucher recipient lists, the Duelfer report states.
How much could a voucher holder earn?
Depending on the price of oil, voucher holders could earn from ten cents to thirty-five cents per barrel beyond the regular market profit, the report says.
Who received the vouchers?
The Duelfer report contains a list of more than 1,300 oil vouchers that Saddam Hussein gave to more than a hundred corporations, foreign officials, individuals, and political parties around the world. This information came from lists found at Iraq’s state oil company and interviews with captured regime officials.
- Thirty percent of the oil vouchers were issued to beneficiaries in Russia, including individual officials in the president’s office, the Russian
Foreign Ministry, the Russian Communist Party, members of the Russian
parliament, and the oil firms Lukoil, Gazprom, Zarubezhneft, Sibneft, Rosneft, and Tatneft.
- Fifteen percent of the beneficiaries were French, including a former
interior minister, the Iraqi-French Friendship Society, and the oil company
Total.
Which individuals were named in the report as voucher recipients?
Among them:
- Vladimir Zhirinovsky, the Russian Liberal Democratic Party leader, and companies associated with his party were allocated 53 million barrels.
- Alexander Voloshin, chief of staff under former Russian President Boris Yeltsin, was allocated 3.9 million barrels of oil from May to December 2002.
- Benon Sevan, the UN chief of the Oil-for-Food Program, received an allocation of 13 million barrels.
- Charles Pasqua, a businessman and former French interior minister, received an allocation of 11 million barrels.
http://www.cfr.org/publication/7631/