Corruption Watch: March 4, 2004

Part 1 of this article examined a partial list of Russian companies among the nearly 270 names published by the Iraqi daily newspaper "Al-Mada" on 25 January. The paper reported that those individuals, companies, or organizations were allegedly given coupons to exchange for oil by then-President Saddam Hussein's Iraqi regime in order to secure their political support.

The level and scope of the "Al-Mada" allegations have been startling. Along with Russian and Ukrainian oil giants, others on the list include Ukrainian political parties, a Canadian oilman, and a British politician.

Also named on the list are a number of terrorist organizations -- allegations that, if true, would support the claim of U.S. President George W. Bush that the Iraqi regime supported terrorism. The Popular Front for the Liberation of Palestine (PFLP) was named in the "Al-Mada" list as allegedly receiving 5 million barrels. The PFLP was placed on a U.S. list of terrorist organizations in November 2001. It is highly doubtful, however, that the UN Office for Iraqi Affairs would have allowed an oil-for-food (OFF) contract to be awarded to the PFLP.

Under the rubric "Palestine," the name Abu al-Abbas is listed as having received 1 million barrels of oil. According to the Israeli government's website (http://www.israel-mfa.gov.il/mfa/go.asp?MFAH0n3z0), "Palestinian Liberation Front (PLF) squad activists arrested by the Israeli security services revealed in their interrogation that they trained in military camps in Iraq, including in the Republican Guard base in Tikrit. They stated that Iraqi intelligence personnel were directly responsible for their instruction and briefing. In addition, the instruction and guidance process involved PLF leader Abu al-Abbas and Bassam al-Ashqar (Abu Mustafa), a senior PLF leader, who was previously a member of the terrorist squad that kidnapped the Achille Lauro passenger ship and was subsequently arrested in Italy."

The Mujahedin Khalq Organization (MKO) in Britain also allegedly received 1 million barrels of oil. The organization is in opposition to the regime in Iran and is classified as a terrorist organization by the United States. The MKO is not known as an oil trader.

There is a mysterious listing for Malaysia: "Hawala, 1 million." "Hawala" is the name for the informal banking system used in many Middle Eastern and Asian countries by terrorist groups to move money without detection and criminal gangs to launder funds. This is the only item on the list without a concrete name attached to it, perhaps implying a high level of confidentiality.

The list published by "Al-Mada" also contains the name "Muhammad Salah," an Egyptian who allegedly received 7 million barrels. In the U.S. list of designated terrorist organizations and individuals, the name "Muhammad Salah" appears along with his alias "Nasr Fahmi Nasr Hasanayn."

THE STRANGE CASE OF GEORGE GALLOWAY

But can the "Al-Mada" list be trusted? Many have questioned the veracity of documents that have been used to implicate individuals or organizations in the oil-for-dollars scandal.

George Galloway, a former British Labour Party member of parliament (MP), was first accused of taking bribes from Hussein by the British "Daily Telegraph" on 22 April 2003. According to Iraqi intelligence reports found by the newspaper, Galloway allegedly received "at least 375,000 pounds sterling per year." The paper reported that "Galloway asked an agent of the Mukhabarat secret service for a greater cut of Iraq's exports under the oil-for-food program." One of the documents found in the Iraqi Foreign Ministry stressed that "payments to him must be made under 'commercial cover.'" According to "The Daily Telegraph," Galloway allegedly became a beneficiary of Hussein's generosity for his longstanding record as a critic of Anglo-American policy toward Iraq and his ardent stand against sanctions imposed on that country.

The article in "Al-Mada" mentions Galloway's name six times. One example is a 2001 contract for 4 million barrels concluded with a the company Aredio Petroleum, which is allegedly connected to Fawaz Zeurekat, a Jordanian businessman. An annotation next to the entry on the document reads "for Mr. George Galloway." Zeurekat told AP on 27 January that "selling Iraqi oil is a legitimate business, it's not like selling drugs. All my deals were done with the approval of the United Nations and the money I received was from international firms I had sold the oil to and not from Iraq."

Immediately after the publication of this expose in "The Daily Telegraph," Galloway denied the charges in a 22 April 2003 letter published in "The Guardian." In the letter Galloway wrote: "To the best of my knowledge, I have never met an officer of the Iraqi intelligence. I have never solicited nor received money from Iraq for our campaign against war and sanctions." Galloway also filed a libel suit against "The Daily Telegraph."

David Blair, the British journalist who wrote the story for "The Daily Telegraph," was asked about the authenticity of the documents he used in his story. Blair told the BBC on 23 April 2003 that "I think it would require an enormous amount of imagination to believe that someone went to the trouble of composing a forged document in Arabic and then planting it in a file of patently authentic documents and burying it in a darkened room on the off-chance that a British journalist might happen upon it and might bother to translate it. That strikes me as so wildly improbable as to be virtually inconceivable."

The U.S. press also picked up the story. On 25 April 2003, the "Christian Science Monitor" ran a story about documents obtained in Iraq that alleged Hussein's regime had paid Galloway $10 million over 11 years to promote its interests in the West. The paper said it got the documents from an Iraqi general, Salah Abdel Rasool.

The report claimed that one of the documents was written on Republican Guard stationary and read: "Manager of the security department, in the name of President Saddam Hussein, to order a gratuity to be issued to Mr. George Galloway of British nationality in the amount of three million dollars only." None of the documents given to the "Christian Science Monitor" mentioned any vouchers for oil.

But other media began to doubt that the documents were real. The British-based "Mail on Sunday" (a right-wing paper unlikely to be one of Galloway's cheerleaders) on 11 May 2003 disputed the authenticity of documents obtained from General Rasool. Those documents, unlike the ones obtained by the "Monitor," included purported Galloway signatures. "Extensive examination of the documents by experts has proved they are fakes, bearing crude attempts to forge the MP's signature," "The Mail on Sunday" wrote.

In June 2003, the "Christian Science Monitor" backtracked and admitted that documents it had received in Iraq and used in its previous story were "most certainly forgeries." The paper also apologized to Galloway. These documents, according to the "Monitor's" story on 20 June 2003, were purported to have originated in the Special Security Section, run by Hussein's second son, Qusay, who was later killed by coalition troops.

"In light of this new information bearing on the credibility of the source of the 'Monitor's' alleged Galloway papers, editors decided to consult document experts in the United States to see if the papers could be proved either false or genuine," the paper wrote. "On the recommendation of several forensic experts, the 'Monitor' turned to Valery Aginsky, an ink chemist with Riley & Welch Associates, Forensic Document Examinations, Inc., in East Lansing, Mich. Dr. Aginsky first tested ink from the two alleged Galloway documents with the oldest dates -- 1992 and 1993. He found that the ink components had not yet finished aging, a process that typically takes no more than two years. The documents tested simply could not have been prepared when their dates said they were, according to Aginsky.

"Aginsky then compared the ink from these older-dated documents with that from a document dated 2003. He determined that they were aging at the same rate -- meaning that these papers had most likely been written at approximately the same time and not over a period of a decade, as their written dates claimed," the paper wrote. Aginsky said it was "90 percent probable" that the documents had been prepared recently.

After the forensic examination was complete, Ilene Prusher, a "Christian Science Monitor" correspondent, met with General Rasool. Prusher reported that the general "was offering other documents alleging malfeasance on the part of a wide array of foreign public figures noted for their support of the Hussein regime." Earlier, when he had given documents to the "Monitor," Rasool had denied having documents dealing with any foreign politicians other than Galloway.

ALLEGATIONS OF FORGERY

The story published by the "Christian Science Monitor" in June raises a number of red flags about the "Al-Mada" list. Did "Al-Mada" also receive documents from General Rasool? If so, are they genuine? Can they stand up to forensic examination?

On 19 February, the "Arizona Daily Star" provided the following information from "Al-Khaleej," a newspaper based in the United Arab Emirates: "An Iraqi man and a group of others had compiled a counterfeit list [the 'Al-Mata' list] of names of Arab and foreign individuals and firms that had received oil coupons from the former regime of Saddam Hussein. The paper wrote that the man, who identified himself as Sajjad Ahmad Ali, said he and his companions received $3,700 and gifts in return for the counterfeit operation. Ali said the counterfeit list was drawn up in 10 days in December, and explained that the documents were steamed and dried 'to make the paper appear old.'

"Ali urged those who saw their names on this list to demand the original copy and to scientifically examine the date of the writing. The Iraqi insisted that those who had been accused of taking oil bribes from the former regime in return for their loyalty would be able to 'discover that all the dates are lies and will know the paper is new and does not look anything like Iraqi paper used during the sanctions.'" The same charges were repeated on 13 February on the English-language website of the Lebanese-based "Dar Al Hayat" after an Iraqi man had claimed that he had falsified the "Al-Mada" lists.

CONCLUSION

With the huge potential for embarrassment over the sensitive nature of the allegations, there have been a number of calls for an international investigation into the "Al-Mada" list. "The Wall Street Journal Europe" on 20 February reported that the U.S.-led Iraqi Governing Council had appointed the international auditing firm KPMG and the London-based law firm Freshfields Bruckhaus Deringer to investigate the "Al-Mada" allegations and to conduct a forensic analysis of the documents. The paper noted that the council would ask the United Nations to help in this investigation.

It seems reasonable to assume that the prewar Iraqi government and President Hussein were engaged in open, as well as covert programs, to buy political support around the world. There have been plenty of credible accounts by individuals who were approached by Iraqi officials offering such bribes. There is, however, no credible information as to the scope of the covert effort. In addition, a full investigation of the authenticity of the documents published or possessed by "Al-Mada" needs to be conducted by a reputable international agency. The information in these documents, if they are authenticated, also needs to be compared to any testimony given by Hussein himself and other high-level officials of his government who are now prisoners of the coalition in Iraq. Moreover, the use of forgeries by Iraqis or others interested in discrediting opponents of Anglo-American policies in Iraq tend to confuse and obfuscate what actually took place prior to the war.

The allegations on the "Al-Mada" list do have an air of unreality about them. Could it have been possible for so many high-level government officials and large corporations to take such large bribes without being discovered?

In certain cases, these are not new charges and demand further investigation; in others, they are shocking to the point of being outrageous. If any or all of the charges are proven to be true, the question of punishment will be raised. In some instances, high-ranking government officials are openly named, and, if further investigations are conducted, then in all likelihood many more might well become implicated. It is more than likely that many governments will not want to place such persons on trial.

The affair also shows that Hussein's regime was engaged in a multipronged operation of subversion and subterfuge. Hussein used the OFF program's liberal provision of allowing Iraq to choose its clients to buy good will toward his regime. As the end approached, the methods became less sophisticated and the direct use of bribery was employed. The regime, desperate for cash to satisfy Hussein's megalomania, used various kickback schemes to bypass the OFF restrictions and began demanding money from its friends and supporters.

But the largest operation seems to be the huge amounts of oil "coupons" given to the Russian oil giants and allegedly sold on behalf of Hussein, who took the money and in return promised the Russians access to the country's giant oil fields. If such a scheme did take place it was pure extortion.

The names of companies contracted to purchase oil under the UN program is not on public record. According to a September 2002 Washington- and Hague-based Coalition for International Justice (CIJ) report, the initial largest participant in the OFF program was Turkey followed by Russia.

This was an unheard-of opportunity for highly placed Russians to acquire, and possibly steal, millions of barrels of oil. But not only for personal enrichment, it was an opportunity for Russia to gain an upper hand in the great game of oil. By controlling Iraq's oil, the second-largest deposits in the world, in addition to their own fields, the Russians would be able to break OPEC's back and dictate their terms to consumer nations, while cynically declaring their support for Hussein.