The Washington Times
May 23, 2005
The U.N.-run oil-for-food program for Iraq ended up being easily manipulated by Saddam Hussein’s regime. One Iraqi businessman who gamed the system to import forbidden dual-use technology told The Washington Times how easy it was.
From 1996 to 2003, when U.S.-led forces invaded Iraq, Saddam’s government ran circles around the United Nations, following strategies developed in the early 1990s to slip under the wire of international sanctions imposed after Iraq invaded Kuwait in 1990.
In that first stage, said T.J., a businessman with close ties to the Iraqi military industry, Iraq used Jordan “as the window to the world, to obtain all available weapons and materials from [former] communist and socialist countries.”
Saddam and Hussein Kamil, who was chief of Iraq’s ballistic-missile weapons system, put together a plan to sell Iraqi goods abroad, put the cash in Jordanian banks, then open letters of credit there to pay for embargoed materials and import them through Jordan’s Aqaba port.
For example, T.J. said, they set up a Jordanian-Iraqi venture called Al-Qaim, led by a close relative of Palestinian leader Yasser Arafat, who died last year. The company, T.J. said, signed contracts with the Iraqi ministry of industry and supplied it with missile-guidance systems stolen by the Russian mafia from the Russian army after the fall of the Soviet Union in 1991.
In 1994, he said, “the real contract presented to the Iraqi Central Bank said $10 million should be paid to this guy for importing electronic parts – without any definitions.”
“He brought two lots through Aqaba. One of the lots was delivered to us, and the other one was discovered by security officers at the port and given to U.N. inspectors,” the businessman said.
Mr. Kamil established a number of ostensibly private Iraqi companies for similar transactions to supply the Iraqi military industry with much-needed parts. A firm named Al-Beshaer, then located in front of the German Embassy in Baghdad, supplied gyroscopes and other parts needed to extend the distance capability of missiles.
Also in 1994, T.J. said, a company he was connected with illegally imported from France, via Tunisia and Jordan, vacuum furnaces needed to make part of the missiles’ liquid-propelled rocket engines.
When the oil-for-food program was set up to tighten sanctions but ease the burden on the Iraqi people, “the intelligence people and [then] Minister of Trade Mohammed Mehdi Salih played a big role in playing a game with the U.N. to smuggle as much cash as possible in U.S. dollars from these amounts and use these contracts to provide for the weapons program – not just infrastructure,” the businessman said.
They set up companies in Dubai, Jordan, and by 1998, in Syria.
Knowing that Syria’s relations with the United States were not good and that Damascus would not inform Washington, Iraq “asked the Syrian government to use this agreement to smuggle money, oil, weapons and equipment for the development of weapons programs.”
Within two years of the oil-for-food sanctions, “$2 billion in cash was running between the Iraqi government and Rafidian Bank on the one side and between the Syrian government and the Fifth Trading Bank in Damascus on the other side,” he said.
“Hundreds of personal accounts were opened in the name of the [Iraqi] Olympic committee … the military ministry and in the name of Iraqi, Syrian and Lebanese traders in Syria and Lebanon.” To facilitate transactions, Syria set up an international trading company, SES, owned and led by close relatives of Syrian President Bashar Assad.
SES was used to import military equipment, said the Iraqi businessman, who signed contracts with the company to bring in machinery for Iraq’s industry ministry from Spain, Turkey and the United States.
As late as 2002, a year before the U.S.-led invasion of Iraq, Saddam’s government was still sidestepping the sanctions to bring in equipment to advance his chemical-weapons program, as well as for missile guidance and delivery systems, the businessman said.