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. Last Updated: 07/27/2016

Russia Was Hussein's Top Oil Agent: UN

APPaul Volcker
Russia was former Iraqi leader Saddam Hussein's oil agent of choice and Russian companies benefited much more than those of any other country from the United Nation's oil-for-food program, according to newly published UN records and U.S. congressional investigators.

Information released late last week by two of several committees investigating abuse of the UN program appears to support claims that Hussein attempted to use the program to buy influence in the UN Security Council.

Russian firms bought $19.2 billion of Iraqi oil and exported $3.3 billion worth of food and other UN-approved items to Hussein's regime, much more than any other country, UN records show. State-owned oil company Zarubezhneft, soon to be acquired by Gazprom, was the top buyer of crude under the program, paying almost $3 billion for an unspecified amount.

Such deals with Iraq were not illegal under the terms of oil-for-food, which ran from 1996 to April 2003. Under the program, Iraq was allowed to sell limited amounts of oil to UN-approved companies and use the proceeds to purchase food and certain kinds of humanitarian goods.

Providing funds to Iraq outside the UN program, however, would have violated sanctions. An earlier report by Charles Duelfer, the head U.S. arms inspector in Iraq, charges that Hussein often imposed illicit surcharges on vouchers for Iraqi oil and demanded illegal kickbacks from companies that won the right to make sales to Iraq. Duelfer published a lengthy list of oil voucher recipients, which included dozens of Russian companies, politicians, political parties and government ministries.

A U.S. congressional investigation uncovered a list of hundreds of firms approved by Hussein and his lieutenants to sell humanitarian goods to Iraq. The document lists more than 280 Russian and 100 Saudi companies, together accounting for more than half the list, according to The Associated Press. The list, which investigators said might not be complete, includes companies from more than a dozen other countries, but none from permanent UN Security Council members China, France or the United States.

An unnamed congressional investigator called the Iraqi list for selling it humanitarian goods equivalent to the voucher list in the Duelfer report.

"Until now, it had been thought that only vouchers for oil were handed out, but due to disclosures by Iraqi officials from the Ministry of Trade, we now understand that the practice was spread even further," the investigator said.

Russian companies on the exempt list include Gazprom, LUKoil and Tatneft, all three of which also appear in the Duelfer report. No representatives of those companies were available for comment Sunday.

The UN records say 248 oil companies from different countries bought a total of $64.2 billion of Iraqi oil under the program, and that 3,545 companies sold $32.9 billion worth of food and other goods to Hussein's regime.

France was the second-biggest purchaser of Iraqi oil after Russia, buying $4.4 billion worth. France was also the second-biggest exporter to Iraq under the program, selling $2.9 billion worth of goods.

UN Secretary-General Kofi Annan said Friday that the ongoing scandal is damaging the work of the United Nations.

"There is no doubt that the constant campaign has, and discussions have, hurt the UN," he told reporters. "That's why we want to get to the bottom of it and clear it as quickly as possible."

Many Russian companies and officials have denied any wrongdoing, although some businessmen have said off the record that violations were widespread.

Russian officials say they are cooperating with the UN investigation, led by former U.S. Federal Reserve chairman Paul Volcker. A spokesman for the Volcker commission said UN member states are cooperating with the investigation, but he declined to discuss specific governments.