Sanctions Breached

Mabey & Johnson, a British bridge construction company, has admitted that it may have made corrupt payments to Saddam Hussein's regime in Iraq to win an export order.

Mabey & Johnson have been under investigation by the Serious Fraud Office for more than a year.

In its recent annual results Mabey said that in April this year, it "disclosed to the SFO evidence that had come to light suggesting that in 2002 the company may have indirectly made two payments to the Iraqi regime in breach of UN sanctions".

Mabey added that it "has recently been notified of allegations that certain historical contracts may have been procured through corrupt acts".

The company has called in a firm of City lawyers, Herbert Smith, to carry out its own inquiry into all the corruption allegations. New managers have been installed at the firm.

The UN report in sanctions busting alleges that Mabey paid a $202K kickback between 2001 and 2003, and was given a $3.6M contract by the Iraqis.

$10BN Lawsuit

The Iraqi government has served a number of foreign companies with a $10BN civil lawsuit. The companies, including Daimler, Siemens and B. Braun are accused of colluding with Saddam Hussein.

The lawsuit describes the kick backs etc involved in the United Nation's food-for-oil program in Iraq as "the largest financial fraud in human history."

The lawsuit has been filed in the US federal court in New York, and alleges that 2,200 companies from 66 countries paid a total of $1.8BN in kickbacks to Saddam Hussein's regime in exchange for supply deals.

Quote:

"Its impact on the people of Iraq when far beyond financial loss.

The corruption of the OFFP (oil-for-food program) affected the very lives and health of the Iraqi people."

Daimler allegedly sold Mercedes trucks and spare parts to the Iraqi government. The A UN-sponsored report by Paul Volcker claims that an area manager at Daimler agreed in 2001 to pay a 10% kickback on a deal to sell an armoured van to Iraq, at an inflated price.

Daimler maintained at the time that it did not knowingly pay kickbacks.

Siemens has been accused of paying a six-figure sum as a bribe to the regime, to secure energy and medical-equipment contracts.

Chickens are coming home to roost!

Bribes Investigation

Executives from GlaxoSmithKline, AstraZeneca and Eli Lilly may be interviewed by Britain's Serious Fraud Office as part of its investigation into allegations that British companies paid bribes to Saddam Hussein's regime in Iraq.

The inquiry comes in the wake of the 2005 UN report by Paul Volcker, who listed more than 2000 companies worldwide that could have been involved with bribes paid to the former Iraqi regime to secure contracts under the UN program.

The report has found evidence suggesting AstraZeneca had paid $162K in kickbacks to secure $2.9M of contracts. GSK was accused of paying $1M for business worth $11.9M.

The investigation could take years, and is expected to cost £22M.

Sentencing Lite

Houston oilman Oscar Wyatt, accused of paying kickbacks to Saddam Hussein under the United Nations' Oil-for-Food programme has been sentenced to 12 months 1 day in a low security jail.

In explaining the sentence, which was six months less than the low end of the sentencing range under federal guidelines, U.S. District Judge Denny Chin cited "amazing letters" from admirers of the 83 year old.

Quote:

"Mr. Wyatt is a most extraordinary man.

He has lived a remarkable life.

There is little doubt in my mind that Mr. Wyatt broke the law."

What a remarkable country America is; where, on the one hand, the death sentence is routinely carried out yet there are times when mercy is also shown.

Vaile Denies Accusations

The Australian Nationals leader, Mark Vaile, has rejected allegations that Foreign Minister Alexander Downer knew about the AWB scandal before it was revealed.

Former Austrade director John Finnin, who was Australia's top Middle East trade official, told Fairfax newspapers that Mr Downer would have known AWB, Australia's single-desk wheat exporter, was paying kickbacks to Saddam Hussein.

Mr Finnin says he met with the owners of Jordanian trucking firm Alia in September 2003.

Alia was was used to channel funds to Saddam through "trucking fees".

Quote:

"I was the senior trade officer in the region and Iraq was my responsibility.

The foreign minister had enough advisers to know that (the meeting occurred)."

Mr Vaile, a former trade minister, retorted:

"We established, for all intents and purposes, a Royal Commission that was overseen by Royal Commissioner Cole into this whole issue.

It's conclusion was that there was certainly no wrong-doing by government or by government officials and that is a matter on the public record.

As far as we are concerned, the case is closed - it's finished."

Wyatt Confesses

Oscar Wyatt, the Texan oil tycoon on trial for paying kickbacks to Saddam Hussein, has confessed that he paid illegal kickbacks to Saddam in exchange for oil contracts through the U.N. oil-for-food program.

Wyatt, who is 83, opted for a plea bargain and agreed to serve up to 24 months behind bars.

Wyatt must also pay the $11M he made as a result of his dealings with Iraq between 2000 and 2003.

Wyatt's sentencing date is set for November 27th.

Saddam's Old Friend

Saddam Hussein allegedly told Houston oilman Oscar Wyatt in 1995, that the ranks of Iraq's friends had dwindled so much during the years of economic sanctions he could count them on one hand.

Iraqi-American consultant Samir Vincent told the federal court, trying Wyatt for paying kickbacks to Saddam:

"You are one of them."

Wyatt allegedly replied:

"I appreciate the gesture, Mr. President. I feel the same way about Iraq."

Vincent, appearing for the prosecution, said that he accompanied Wyatt on seven or eight trips to Iraq between 1991 and 1997.

Vincent identified a photograph he said showed Saddam sitting with Wyatt, Vincent and Tariq Aziz, Iraq's former deputy prime minister.

At that time Iraq was under international sanctions, and Americans were barred from spending any money to travel to Iraq without the U.S. government's permission.

Class Action Filed Against AWB

Australia's main wheat exporter AWB Ltd has stated that a class action has been filed against it, and its United States subsidiary AWB (USA) Ltd, by lawyers acting for Iraqi citizens.

The class action, filed in the Southern District of New York, is being undertaken by victims of crimes perpetrated by the Saddam Hussein regime in Iraq from 1996 to 2003, or their surviving immediate family members.

The action, which also names French bank BNP Paribas as a defendant, alleges that the defendants contributed to the injuries and damages sustained by the plaintiffs by giving substantial assistance to the Saddam regime.

AWB was found by an Australian judicial inquiry to have paid kickbacks of $222M to the regime to secure sales.

The Wyatt Trial

Oscar Wyatt, a Texan oil billionaire, is now being tried in the US accused of paying millions of dollars in kickbacks to Saddam Hussein's government.

Wyatt, 83, is pleading not guilty. However, if convicted, he faces 74 years in jail.

Assistant US Attorney Stephen Miller opened for the prosecution by stating:

"When the world imposed sanctions on Iraq, Oscar Wyatt stepped up to help them evade sanctions."

Wyatt's lawyers contend that he "did not pay any surcharge to the Iraqis".

Wyatt faces five charges, including engaging in prohibited financial transactions with Iraq.

Tip Off Trial

U.S. District Judge Denny Chin has ruled that prosecutors can introduce evidence (in the form of a diary) in the trial of Oscar Wyatt, a Texas oil tycoon, that shows that Wyatt tipped off Iraq about the impending 2003 US invasion.

Judge Chin also allowed evidence that the defence claims unfairly suggested that payments made by Wyatt to Iraq's state oil marketing organisation were bribes passed on to Saddam Hussein.

Wyatt will stand trial on September 5, at a federal court in Manhattan, accused of paying millions of dollars in kickbacks to Iraq to win oil contracts and corrupting the oil-for-food program.

The judge agreed with prosecutors who said that the diary was needed to show Wyatt's close ties with Iraqi officials.

Quote:

"It shows Mr. Wyatt was trying extremely hard to get additional (oil) allocations," the judge said. "Why was the Iraq government treating Mr. Wyatt so well? Why did he get the first (oil) allocation? ... This is further evidence of that relationship."

AWB Bill Passed

The Australian lower house of parliament has passed a bill that will punish those who break UN sanctions. It is ten years since allegations first surfaced that AWB might have been bribing Saddam Hussein.

Attorney-General Philip Ruddock said:

"I reject the suggestion the government has been slow in its response to the threat of money laundering or terrorist financing.

The government, of course, remains committed to ensuring that Australian businesses uphold our international obligations in relation to trade sanctions and combating foreign bribery.

Contravention of UN sanctions and bribery of foreign officials will not be tolerated."

AWB's $300M kickbacks to Saddam were uncovered after the government set up the Cole Commission.

The bill adds a new offence to the 1945 Charter of the United Nations Act which makes it illegal to break an Australian law which enforces UN sanctions, and creates a separate criminal offence for providing false or misleading information relating to sanctions.

Was Saddam Tipped Off?

The prosecution of Oscar S. Wyatt Jr., a Texas businessman accused of being involved in the Iraqi oil scandal, alleged that he told the Iraqi government crucial details of the impending 2003 American invasion of Iraq.

Lawyers for Wyatt said that the allegations, contained in an Iraqi official's diary, were highly prejudicial and irrelevant and should be kept out of his upcoming trial.

Quote:

"This document essentially alleges that Wyatt has committed the deplorable crime of treason and aided an enemy of the United States."

Wyatt is charged with conspiring to pay millions in kickbacks to Saddam Hussein's regime, to win contracts under the United Nations' oil-for-food program in Iraq.

The statements about him were contained in a diary kept by an employee of Iraq's State Oil Marketing Organisation. The diary suggests Wyatt notified the Iraqi government that the United States would bomb Iraq, when it would invade Iraq and how many soldiers would be sent.

Wyatt has pleaded not guilty, and is scheduled to go to trial in early September.

Irish Kickbacks

The Gardai (Irish police) have confirmed that they are continuing investigations into claims that three Irish companies paid illegal kickbacks to Saddam Hussein in 2001.

The companies were named by a UN investigative committee, in a report published in 2005.

The Irish chapter of anti-corruption group, Transparency International, said it welcomed the Gardai investigation. However, it accused the Irish government of not doing enough to enforce or raise awareness of the crime of bribing foreign public officials.

British Oil Trader Arrested

John Irving, a British oil trader was arrested yesterday on U.S. charges of paying bribes to Saddam Hussein as part of the U.N. oil-for-food program for Iraq.

Irving was detained in London, by the Metropolitan Police, on a U.S. extradition warrant. He appeared at the city's Westminster Magistrates Court and was released on bail until his next hearing on July 20.

Irving was one of three men charged in New York in 2005 with defrauding the United Nations of at least $100M, money that should have gone to humanitarian aid for Iraqis.

The other two men, Texas oil executive David Chalmers and Bulgarian oil trader Ludmil Dionissiev, have pleaded not guilty to the charges.

The extradition warrant accuses Irving of colluding with Chalmers and others to defraud the U.N., and pay "illegal and secret commissions and surcharges to officials of the government of Iraq" between January 2000 and March 2003.

Irving has previously denied any wrongdoing.

The Spoils of War

AWB Ltd, the Australian wheat exporter caught up in the oil for food scandal in Iraq, will survive losing its position as the monopoly wheat exporter.

That at least is the view of its chief executive officer, Gordon Davis.

A new grower-controlled, single desk wheat exporter will take over from AWB next year.

This change is as a result of AWB having been found to have paid Saddam Hussein's regime about $300M in bribes.

AWB's export arm, AWB International, could still regain full control of the single desk if grower lobby groups cannot form a new desk structure by March next year.

Mr Gordon said AWB began weaning itself off income from the single desk some time ago.

"When the company was privatised in 1999, 100 per cent of its income was from managing the single desk."

He said the aim had been to reduce this to 20% by 2010.

However, not everyone is convinced by AWB's publicly stated change of purpose.

Liberal backbencher Sophie Mirabella has AWB of trying to blackmail an Australian grain company.

Ms Mirabella has told parliament the grain company Silo Bags developed a revolutionary way of handling storing and trading grain around the world.

She says the AWB saw this innovation as a threat to its lucrative market, and tried a boorish takeover which Silo Bags knocked back.

Ms Mirabella says that the unethical vultures of the AWB have now forced the smaller company onto the sidelines, with blackmail and legal manoeuvres.

Seemingly, AWB has some PR issues that it needs to address!

The Cost of Kick Backs

Australian wheat exporter AWB Ltd is now suffering "payback", for the kick back allegations that engulfed it.

First-half profits fell 72%, to $9.7M, the company blamed Australia's worst drought in 100 years and costs from a scandal related to kickbacks to Iraq to win wheat contracts.

AWB paid $2.2M towards the cost of a government inquiry into the kickbacks scandal.

The Australian government has promised to reform the Australian wheat market after an inquiry last year concluded that AWB paid $220M in kickbacks to Saddam Hussein's regime between 1999-2003, to secure lucrative wheat contracts under the discredited U.N. oil-for-food scheme.

What goes around, comes around!

Bar-Ilan University, just outside of Tel Aviv, has awarded an honorary doctorate to billionaire Marc Rich, who was pardoned of tax evasion charges by President Clinton in 2001 and founded of an oil trading firm under investigation for dealings with Saddam Hussein.

In 1983, Rich left the U.S. for Switzerland after he was charged with tax evasion and illegal oil trading with Iran. Clinton pardoned Rich of all criminal charges on his last day in office in 2001.

In 2005, a commission investigating the U.N. oil-for-food scandal concluded the Marc Rich Group – a Swiss-based oil trading firm – illegally gave kickbacks to Iraqi officials under Saddam.

Swiss authorities launched an investigation, which is still ongoing. The company has denied the accusations.

AWB Sued

AWB Ltd, the Australian wheat exported implicated in the oil for food kickback scandal, is facing lawsuits in both Australia and the USA.

Lawyers in both Sydney and New York have lodged claims for a combined $125M.

Retired farmers John and Kaye Watson are the lead plaintiffs in a class action lodged on behalf of AWB shareholders in Sydney's Federal Court.

Mr Watson owned 10,000 AWB shares, which were once worth more than $6 each. The share price halved during the Cole inquiry into the Iraq kickback scandal, which found that AWB had been channeling money to Saddam Hussein's regime in the build up to the Iraq war.

Mr Watson says he lost around $10,000 of his investment in AWB.

Mr Watson said:

"The evidence suggests they were corrupt, full-stop. They were supposed to keep the market informed but they misled the government and the shareholders."

The US law firm of Cohen, Milstein, Hausfeld and Toll filed a class action lawsuit on behalf of American wheat farmers in federal district court in New York.

The suit seeks up to $100 million in damages from AWB Ltd and its US subsidiary, AWB (USA) Ltd.

US farmers claim they were "stuck with an oversupply of wheat" between 1999 and 2003, because Iraq dealt only with AWB Ltd.

The suit invokes the RICO racketeering law, it says AWB "paid bribes to the Iraqi government" to "exploit a monopoly on wheat sold into Iraq."

Partner Benjamin Brown said:

"AWB knew that, by paying these bribes, it would profit at the direct expense of American farmers -- its only real competition in the Iraqi market.

Unfortunately, AWB achieved its monopoly in the Iraqi market not through fair competition, but by deceiving the United Nations into unwittingly funding Hussein's corrupt regime."

What goes around, comes around.

Iraq Bribe Scandal

Tongsun Park, a South Korean businessman and lobbyist, has has been jailed for five years for accepting kickbacks from Saddam Hussein to subvert the UN's oil-for-food program in Iraq.

Park was convicted on conspiracy charges in July 2006, for receiving at least $2M from Baghdad.

Park was sentenced at a hearing in New York.

US District Court Judge Denny Chin, sentencing Park, said that the 5 year term was "harsh" for a man of Park's age (71) and health but was reasonable and appropriate.

Park was also fined $15K, and told to forfeit $1.2M.

Mr Park travelled to Iraq to collect $700K in cash, and accepted envelopes stuffed with $100 notes, Judge Chin said.

Quote:

"You acted out of greed, acted to profit out of what was supposed to be a humanitarian program."

Park is also due to face trial in Washington DC, accused of making false statements about his role in the UN programme in an interview with FBI agents in December 2004.

British Firms Investigated

The Serious Fraud Office (SFO) is investigating a number of British companies, over allegations that they paid bribes to Saddam Hussein to win lucrative contracts.

The investigation will look at possible breaches of the oil-for-food sanctions.

The UN has issued a report which lists over 2,200 companies, worldwide, that may have been linked to bribery to Iraq.

The British firms listed in the report by Paul Volcker, submitted two years ago, include GlaxoSmithKline and AstraZeneca. They have all denied the accusations.

The SFO spokesman said:

"The SFO has now opened a formal investigation into issues relating to the breaches of the embargo (against Iraq).

All this springs out of the Volcker report and other information that came to us last year. The director of the SFO has now signed us up to conduct a full investigation."

AstraZeneca state:

"We deny any allegation of unethical behaviour on our part in our trading relationships with Iraq,” a spokesman said.

AstraZeneca sent a consignment of medicines originally requested by the Hussein government under the United Nations Oil for Food Programme.

Most of the consignment was delivered after the coalition forces of the US and UK had taken control of the country.

The consignment was sent with all relevant United Nations permissions and UK Government Department of Trade and Industry export licences in place."

A GlaxoSmithKline spokesman said:

"GSK denies any wrongdoing. The UN Oil for Food programme was run in the UK by the Department of Trade and Industry and GSK operated entirely within DTI guidance in this area.

Indeed, GSK had a regular dialogue with officials at the DTI in order to ensure that all its dealings under the Oil for Food programme were transparent and in accordance with the regulations."

The investigation will take years and cost millions.