Oil racketeer's SA links
When an international inquiry harpooned a top United Nations official and a Geneva-based trader last week for accepting oil from Saddam Hussein, it was a case of déjà vu: the trader had been up to similar tricks in South Africa.
Benon Sevan, the UN Under-Secretary General who headed the Iraq oil-for-food Programme, was suspended last Friday after the Independent Inquiry Committee, appointed last year by UN Secretary General Kofi Annan, released an interim report on the scandal-plagued humanitarian programme.
Oil-for-food was an attempt to alleviate civilian hardship caused by UN sanctions: Hussein’s Iraq could sell oil and use the proceeds to buy food and medicines.
The committee’s findings against Sevan and oil trader Fakhry Abdelnour echo two of the most consistent allegations about oil-for-food: that it had become Hussein’s ‘oil-for-influence” racket, and that his regime had squeezed it for illegal income.
The committee, whose three members include South African Judge Richard Goldstone, concluded that Sevan had solicited allocations of millions of barrels of oil from the Iraqi regime for Abdelnour, whose Panama-registered company, African Middle East Petroleum, profited by about R9-million.
The committee stopped short of finding that Sevan had received personal benefit, saying this was still under investigation. But it found that his soliciting oil allocations presented a ‘grave conflict of interest”.
‘He was positioned to affect matters of substantial interest to the government of Iraq, and the government of Iraq hoped that he would act favourably in return for the allocations that he was granted.”
The committee quoted former Iraqi oil minister Amer Muhammad Rashid as saying that oil allocations had been granted to individuals ‘who ha[d] been good to us, people of influence”.
Sevan has denied wrongdoing, saying through his lawyer that he is being scapegoated because of ‘massive political pressure”.
Abdelnour, Sevan’s ‘partner in crime”, has also denied guilt.
But among other things, the committee said he had admitted paying a ‘surcharge” — a kickback outside of the oil-for-food programme — to the Iraqi regime.
The committee has made no finding on the extent of the kickbacks collected by Iraq, but has indicated that its own estimates accord with an earlier calculation that Iraq squeezed more than R10-billion from oil and food contracts under the programme. The kickbacks were illegal, as they undermined the intention of depriving the regime of revenue while fulfilling civilian needs.
According to a 1999 report by then-public protector Selby Baqwa, Abdelnour, a cousin of former UN secretary general Boutros Boutros-Ghali, profited from breaking UN oil sanctions on apartheid South Africa.
The committee has been interested in Abdelnour’s embargo-busting past. Goldstone this week told the Mail & Guardian: ‘We’ve received full cooperation from the public protector’s office in relation to the activities of [African Middle East Petroleum] and its proprietor Abdelnour.”
The public protector’s investigation was sparked by a row between then minerals and energy minister Penuell Maduna and then auditor general Henri Kluever over alleged missing state oil funds. It detailed Abdelnour’s supply of Egyptian state oil to South Africa between 1988 and 1992.
It appears that Abdelnour traded on his family connection. The public protector report says Abdelnour told the South Africans he was related to Boutros-Ghali, who held ministerial portfolios including oil and foreign affairs in Egypt before landing the top UN job.
Abdelnour, the report said, represented that ‘through Mr Boutros-Ghali, [he] had a direct line of communication with the president of Egypt”.
The Independent Inquiry Committee found that Boutros-Ghali circumvented UN tender regulations to appoint a French bank acceptable to the Iraqis to run the oil-for-food escrow account. It also detailed how Abdelnour and Sevan had maintained apparently secret communications via another relative of Boutros-Ghali.
In 1997 Abdelnour was involved in another South African scandal. After the M&G had exposed the irregular appointment of a Liberian crook, Emanuel Shaw II, to restructure South African state oil assets, Abdelnour told the M&G how Shaw II had ‘extorted” $10 000 from him to advance his interests with Maduna.
n Meanwhile, the committee’s remarks about the Saddam Hussein regime using oil to gain influence corroborate an M&G exposé last year of how a little-known South African oil company, Imvume Management, had received large Iraqi allocations. Imvume had close relations with the African National Congress.
Imvume and the ANC launched defamation claims against the M&G. The M&G is defending.
Goldstone said this week that the committee was not investigating all companies that profited from oil-for-food, but that it was of interest when the ‘names of politicians” came up, and particularly where the alleged benefit ‘was intended to subvert the integrity of [oil-for-food]”.
He said it was ‘fairly obvious” that the Iraqi regime had bestowed allocations on some beneficiaries in order to gain ‘political favour”.
How US took Iraq’s money, Page 18