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. Last Updated: 07/27/2016

Hussein Traded a School for Oil

MTThe Arabic School, second entrance to the left of the arch, has 55 students.
A shabby, prerevolutionary building near the Kremlin has become an unlikely piece of evidence in the widening investigation into the UN oil-for-food program.

A new U.S. Senate report has accused Vladimir Zhirinovsky, the leader of the Liberal Democratic Party and a deputy speaker in the State Duma, of trading a section of the building to the Iraqi Embassy in 2002 in exchange for the right to resell Iraqi oil. The building on Ulitsa Volkhonka is now used for Arabic language classes.

Zhirinovsky and other Russian politicians are accused of making millions of dollars by subverting the oil-for-food program, which ran from 1996 to 2003. They have denied any wrongdoing.

Zhirinovsky said he had helped the Iraqi Embassy find a new building for its school but he had not owed the Iraqis any money and did not give them the building.

"There must be translation mistakes. I didn't give anything to anyone," he said Thursday in an interview in his office.

"I never had any debts with the Iraqis," he said. "To have debts, you need to do business with someone. I never had any business with them. I never gave them a single dollar and they never gave money to me."

Citing testimony from three former top Iraqi officials, U.S. investigators said Zhirinovsky offered Saddam Hussein's regime the building in place of cash payments for oil vouchers -- payments that were made in violation of UN sanctions.

Under the oil-for-food program, Iraq was allowed to sell some oil to approved buyers and use the proceeds to purchase food for its people.

But U.S. investigators have charged that Hussein issued vouchers to his supporters in Russia and elsewhere that allowed them to buy Iraqi oil at cut-rate prices. The oil vouchers were then resold to oil merchants at a hefty profit. During some phases of the program, recipients of the vouchers, such as Zhirinovsky, were required to pay surcharges for them, payments that essentially amounted to kickbacks, investigators said.

The U.S. Senate report, released Monday, said about 30 percent of the oil sold in the program was allocated to Russians. Zhirinovsky and his party made an estimated $8.7 million through the scheme, the report said.

At one point, however, the Iraqis stopped giving him oil allocations after he failed to make payments to Hussein's government for an extended period of time, former Iraqi Vice President Taha Yassin Ramadan told Senate investigators, according to the report. Ramadan said he traveled to Moscow to personally give Zhirinovsky the message: "Pay or get nothing."

Zhirinovsky finally proposed to pay off his debts by handing over the building, the report said.

"During our numerous meetings we discussed questions about delivery of the building on a free basis in the center of Moscow for an Arabic school," Zhirinovsky wrote to Tariq Aziz, Hussein's deputy prime minister, on March 12, 2002, investigators said. "Today the building registration documents are in the final stage of registration."

Soon after, Zhirinovsky handed over the deed for the building to the embassy, the report said. One unnamed "senior Hussein regime official," interviewed by the Senate investigators, testified, "I was there personally."

The Iraqis interviewed for the report estimated the value of the building at $800,000 to $840,000.

An undated memorandum written by the Iraqi Oil Ministry said Zhirinovsky had turned over the school because he "pretended" not to have the money for the surcharge, the report said.

Michael Eckels / MT

The plaque at the school entrance

An official at the Iraqi Embassy, who would not give his name, said he could not comment on Zhirinovsky's involvement. He said according to documents written in Arabic, the embassy had purchased the building on Feb. 15, 2002, from "Mr. Lebedev, A.V."

Zhirinovsky's son is Igor Vladimirovich Lebedev, also a member of LDPR's faction in the Duma.

A school employee who answered the telephone Wednesday in the principal's office said the building was bought from Zhirinovsky three years ago. The employee, who declined to give his name, said the building previously housed the Institute of World Civilizations, which was established by Zhirinovsky in 1999.

Fifty-five students, mainly children from mixed Russian-Arab families living in Moscow, pay to attend Arabic-language classes at the school, he said.

The school occupies eight three-room apartments, each about 45 to 50 square meters, the employee said. He refused a request to see the school, which occupies one section of a four-story building and is identified by a plaque saying "Arabic School Moscow."

From the outside, the building appears to be in need of repair. Green, sun-bleached paint is peeling from the walls. Windows on the first floor are protected by iron grills. The wood of the window frames is cracked with age.

Zhirinovsky said Thursday that the Iraqi Embassy had asked him for help with its school. The embassy had been renting a building on Ulitsa Ulofa Palme near Moscow State University but could no longer afford the rent, he said.

"I helped them find a temporary location for their school, that's all," Zhirinovsky said, adding that it was more than three years ago. "It was many years ago and not when the Americans say," he said.

Zhirinovsky, who has visited Iraq numerous times and had close ties with Hussein's government, said the Iraqi Embassy in Moscow occasionally asked for his assistance.

"The Iraqi school, the embassy, the businessmen, had to pay a lot of money for rent. The government had no money for that," he said. "They didn't have any money to pay and had problems, and I would go to the Foreign Ministry and other organizations to ask them to help."

Zhirinovsky said he also would make phone calls to help the Iraqis resolve business problems with Russian oil companies.

"That's all I did," he said. "I never had debts and I never did business with them."

In the summer of 2002, Zhirinovsky was given another building in the center of Moscow, on 1st Basmanny Pereulok, for his Institute of World Civilizations, Vedomosti reported at the time. The institute had been renting the building for $102,000 per year.

The instruction to transfer the building was signed by then-Prime Minister Mikhail Kasyanov on June 28, 2002. No explanation was given for the transfer, which was interpreted as a political favor to Zhirinovsky, the report said.

U.S. Senator Carl Levin, the ranking Democrat on the committee leading the investigation, told journalists on Monday that he hoped Russia and other countries would bring anyone implicated in the oil-for-food scandal to justice.

But the Foreign Ministry issued a sharp rebuttal the same day, saying it is cooperating with an inquiry led by the United Nations. That commission has not yet provided Russia with any evidence that Russian politicians or companies broke the law, the ministry said in a statement on its web site.

"Russia is incriminated by the sheer fact of its participation in the Iraqi humanitarian program," the ministry said. "It is difficult to escape the impression that the senators are trying to discredit the UN itself."