Iraq illicitly earned an estimated $21.3 billion by circumventing United Nations sanctions between 1991 and 2003, according to estimates released yesterday by a U.S. Senate panel.
The figure -- double a previously released estimate -- was derived by Senate investigators who examined proceeds from a range of moneymaking schemes, such as kickbacks charged for humanitarian goods, surcharges on oil sales and the illegal export of oil.
Investigators for Republicans on the Permanent Subcommittee on Investigations also released new details of how the regime of former Iraqi president Saddam Hussein manipulated the U.N.'s oil-for-food program, which was designed to allow Iraq to sell oil to purchase food, medicine and other humanitarian goods.
"The oil-for-food program was intended to allow the government of Iraq to provide for humanitarian aid and assistance for its people," Sen. Norm Coleman (R-Minn.), chairman of the Governmental Affairs Committee's subcommittee, said during a hearing yesterday. "Instead, under the oil-for-food program, Saddam Hussein generated massive amounts of money that had one sole purpose: to keep him in power."
During the hearing, lawmakers also raised alarm about documents contained in a recent report by former U.S. weapons inspector Charles A. Duelfer that suggested foreign leaders and a top U.N. official may have received lucrative vouchers to purchase Iraqi oil. Duelfer, who testified at the hearing, said that while Iraqi documents listed the names of various officials, he could not say for certain that they actually used the vouchers and profited from trading the oil.
Duelfer's report, released last month, said that Hussein had raised $11 billion in illegal income between 1991 and 2003. A recent U.S. Government Accountability Office report provided a lower estimate of illegal payoffs during the oil-for-food program -- between 1997 and 2003 -- than Senate investigators calculated.
Fred Eckhard, a U.N. spokesman, cast doubt on the Senate numbers, saying that they "look exceedingly high" but that officials were still reviewing the data.
Coleman renewed his complaints that the U.N. had failed to cooperate with his subcommittee's investigation. Eckhard declined to comment.
The subcommittee's investigation, one of several congressional inquiries into Iraq's circumvention of U.N. sanctions, has been underway for seven months and Coleman said the panel would continue probing the matter. U.N. Secretary General Kofi Annan appointed former U.S. Federal Reserve chairman Paul Volcker to probe corruption in the oil-for-food program.
Iraq raised the bulk of its illicit proceeds by illegally exporting oil between 1991 and 2003, according to subcommittee documents. The report also described how Iraq would contract for first-rate goods and accept delivery of items of lesser value; the supplier would receive a percentage of the difference in price and Iraq would keep the rest.
The report also detailed a pattern of illegal surcharges and kickbacks that Iraq demanded on contracts during the oil-for-food program.
Investigators cited one case in which Iraq's oil ministry told a contractor to inflate prices charged to the country and to then deposit a kickback in an Iraqi government account in Switzerland.
The Weir Group PLC, a Glasgow, Scotland-based company that makes industrial valves and pumps for the oil industry and other uses, complied by boosting the original 2.2 million euro price by 13 percent and depositing the difference between its original offer and the revised offer into an Iraqi account in Switzerland, said Steven Groves, a counsel to the subcommittee.
Weir officials were not in their offices and could not be reached last night. The company released a statement in July acknowledging that prices had been inflated and said it was investigating.
Groves said that money was effectively stolen by Hussein for his own purposes and was not put to its intended use of buying food, medicine or other humanitarian goods for the country's residents.
Staff writer Colum Lynch contributed to this report.