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U.S. Delaying Action on Violators of Iraq Sanctions

Fear of Alienating Allies Close to Election Is Cited

By Robin Wright and Glenn Kessler
Washington Post Staff Writers
Friday, October 8, 2004; Page A30

The Bush administration does not plan to take immediate action or pressure foreign governments to act against individuals or companies that may have violated U.N. sanctions against Saddam Hussein because it fears igniting new tensions with allies -- and undermining the president's message that he is working closely with the international community, according to U.S. officials.

With only 26 days until the election, America's position in the world has emerged as a key issue in the presidential campaign. Democratic candidate John F. Kerry has charged that the Iraq war and the administration's decision not to support international treaties on climate control, land mines and an international criminal court are hurting America's international standing and alliances.

_____In Today's Post_____
Former U.N. Inspectors Cite New Report as Validation (The Washington Post, Oct 8, 2004)
Hussein's Aims, Capabilities Often Differed (The Washington Post, Oct 8, 2004)
1,300 Oil Vouchers Begin to Tell Story (The Washington Post, Oct 8, 2004)
Privacy Act, Order Shielded U.S. Names on List (The Washington Post, Oct 8, 2004)
Many Helped Iraq Evade U.N. Sanctions On Weapons (The Washington Post, Oct 8, 2004)
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"What's next is subject to the election campaign. . . . We're interested in tracking down the [illegal] trade but not interested in doing it before the elections for fear of opening up new fronts and further alienating European allies," said a U.S. official who spoke on the condition of anonymity because of the sensitive diplomacy. "The inducement is to make no news."

The White House is "taking its time" to go through the voluminous report by U.S. weapons inspector Charles A. Duelfer and is exploring options, said James R. Wilkinson, deputy national security adviser for communications. The report lists 44 countries in which people or firms conducted oil business with Iraq when sanctions were in effect.

"We're still studying the report, but it paints a disturbing picture of individuals, companies and others with curious relationships working secretly to help Saddam. At this point, I wouldn't rule out future options," Wilkinson said.

Yesterday, a backlash built among countries that were listed in the report. European allies and individuals expressed outrage at being named, with the unstated implication that they may have engaged in illicit activity in violation of a U.N. resolution.

The atmosphere at a State Department briefing Tuesday for diplomats from countries in the report was "extremely bad" and some participants were "totally outraged," said a foreign diplomat who attended the meeting. "The line of questioning was hostile. People wanted to know why they weren't given further advance notice, why there was no specific information about what the report would say and why American companies were not named."

Another envoy said the group, briefed by Deputy Assistant Secretary of State John F. Tefft, was fuming because the report concluded that Hussein did not seek new weapons of mass destruction after 1991, and yet implied some countries were helping such an effort. The diplomats were also angry because they were not given the report and were instead told to download it from the CIA Web site. But the site became so overwhelmed that some envoys said yesterday they had to try other Web sites, including washingtonpost.com.

A State Department official who attended the meeting described the atmosphere as "fine" but acknowledged that some participants asked "pointed questions" and were unhappy that the report was not available. "The choice was to give them a heads-up or not say anything at all," he said.

Among the most sensitive items to emerge from Duelfer's report are the lists of countries, companies or individuals allegedly dealing with Iraq -- without any indication of whether they had violated sanctions.

In one section, the report lists the Indonesian president, the Russian foreign ministry, a former French cabinet official and the governments of two African countries as having cashed in on lucrative "vouchers" for millions of barrels of oil from Iraq, potentially for profit.

In Indonesia, foreign ministry spokesman Marty Natalegawa said yesterday that there is "no credence" to allegations that President Megawati Sukarnoputri made illegal use of Iraqi vouchers to cash in on 3.7 million barrels of oil. "It's a fact that we took part in the oil-for-food program, but this notion of vouchers is far-fetched."

In Washington, French Ambassador Jean-David Levitte "expressed anger at the process and said he was not happy that names of individuals and companies are being made public on the basis of allegations that have not been verified," French Embassy spokeswoman Nathalie Loiseau said. Levitte also protested that the parties listed in the report were not given any opportunity to provide their side of the story, while the names of U.S. companies that conducted the same business were left out. Those companies were not identified because of U.S. privacy laws, U.S. officials said.

The Namibian government said it had never received vouchers for 7 million barrels of oil, as cited in the report, or bought oil from Iraq. In a statement, former Russian presidential candidate Vladimir Zhirinovsky said he never took oil or money from Iraq; the U.S. report, based on Iraqi documents, says he cashed in on almost 80 million barrels of oil.

Instead of taking immediate action, the administration will mainly rely on the U.N. inquiry led by former Federal Reserve chairman Paul A. Volcker and congressional investigations into the oil-for-food program, which Hussein manipulated to generate income that was not controlled by the United Nations. By subverting that program as well as by smuggling, kickbacks and bribery, the former Iraqi leader made $11 billion during 12 years of sanctions, Duelfer's report said.

"It seems the sensible thing to do is to let these investigations play out," a senior administration official said. "The information is only going to get better as time goes on."

Washington is also "confident" that U.S. allies are studying the report "as closely as we are and there may be potential actions by those nations internally," Wilkinson said.


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