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U.N. Oil-for-Food Program - Panel of a Hearing of the Energy and Air Quality Subcommittee of the House Energy and COmmerce Committee

By:
Date:
Location: Washington, DC


July 8, 2004 Thursday

HEADLINE: PANEL II OF A HEARING OF THE ENERGY AND AIR QUALITY SUBCOMMITTEE OF THE HOUSE ENERGY AND COMMERCE COMMITTEE

SUBJECT: U.N. OIL-FOR-FOOD PROGRAM

CHAIRED BY: REPRESENTATIVE RALPH HALL (R-TX)

WITNESSES: JOSEPH CHRISTOFF, DIRECTOR OF INTERNATIONAL AFFAIRS AND TRADE, GENERAL ACCOUNTING OFFICE; CLAUDIA ROSETT, SENIOR FELLOW, THE FOUNDATION FOR THE DEFENSE OF DEMOCRACIES; JED BABBIN, FORMER DEPUTY UNDERSECRETARY OF DEFENSE UNDER FORMER PRESIDENT GEORGE H.W BUSH

LOCATION: 2123 RAYBURN HOUSE OFFICE BUILDING, WASHINGTON, D.C.

BREAK IN TRANSCRIPT

REP. GREG WALDEN (R-OR): Thank you, Mr. Chairman.

Ms. Rossett, in Mr. Babbin's book Inside The Asylum, he states there's even emerging evidence that money from the program might have gone to support al-Qaeda, and then he references you in the footnote from Oil For Terror, I believe. I had to step out, maybe you've addressed this already, but can you expound on that. What is the reference there, did Oil For Food money go to fund al-Qaeda?

MS. ROSSETT: The financial corridor through which it would have gone, could have gone are certainly there. The question that needs to be answered is, did money flow, where did it end up. I believe that Treasury may be looking at some of this, but I don't think that any investigation is looking systematically at the U.N. contracts, and I would strongly suggest that this was exactly the style in which Saddam Hussein would have been likely to do it. It was hide in plain sight, it was U.N. approved. The contracts had this kickback structure coming and going. There was an opportunity there to collect kickbacks and build palaces or to fund whatever else he might have been interested in. And, as of 1998, onward, a signal year in the development of terrorist networks in various ways, this program had been consolidated in such a way that Saddam Hussein had to be pretty sure that he could dependably game it. It had become an agency, a department in its own right at the U.N. He had kicked out the weapons inspectors, and we had responded-well, the U.N. had responded by doubling the size of the oil that he was allowed to sell, and the following year lifted the cap completely. In other words, expanding this program.

There are quite specific links. I would urge you, if you hold further hearings, to call as a witness-am I allowed to do this?

MR. WALDEN: Sure.

MS. ROSSETT: A private investigator who works at a New York law firm, John Fossett, who is co-author of one of the best reports on corruption under Saddam and it focuses heavily on this program. It came out in late September 2002. I've mentioned it in my written statement here. It's worth looking at. He would be worth calling. They are involved in bringing lawsuits on behalf of victims of September 11th, and this involved looking into terrorist connections, and there are many. Again, the difficulty is, you can see the likely corridor, you need authority that, say, for instance, I do not have. But you may be able to find ways to ask what really went through.

But, sure, there are several that have already been mentioned. I'm happy to supply you with articles about it. A firm in Lichtenstein with direct ties to Bank Al Taqwa listed on the U.N. Terror Watch List in the Bahamas as al-Qaeda financing. I could tick of a set more, but, yes. Also that commercial bank of Syria mentioned in the Treasury testimony. There's plenty of reason to be plenty, plenty worried about this. It may be funding the murder of Iraqis and Americans right now.

Thank you.

REP. WALDEN: Let me ask another question about some of the specific programs. There's been speculation that some countries have been participating, including perhaps Australia, in their wheat sales to Iraq, that the price was greatly inflated for what the world market was. Can any of you address that?

MR. CHRISTOFF: I think the DCA audit did a very good job of looking at particularly the food contracts, and they found that 87 percent of the food contracts they looked at were overpriced by at least 22 percent, and they also expressed concerns about the use of middlemen. In other words, you would have one country that would purchase the wheat or other commodities and sell it, and negotiate the contracts with the Iraqi regime, and that use of middlemen constituted an additional 20 percent in the price.

REP. WALDEN: So what is being done to look at those countries?

MR. CHRISTOFF: The countries that were primary shippers of food to Iraq were Australia, Thailand, and Vietnam. If there is any look at the contracts in detail, that should be part of what we recommended, was looking at a statistically valid sample of all the contracts, and try to identify which were the companies that consistently overpriced, and the countries that condoned the overpricing.

REP. WALDEN: Is somebody doing that?

MR. CHRISTOFF: We have to get the contracts first.

REP. WALDEN: And that's the heart is the issue?

Mr. Chairman, my time has expired. Thank you, sir.

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END

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