Investigators into the Oil-for-Food scandal at the United Nations are exploring a chilling possibility, that the U.N. humanitarian program may have funded terrorists — including possibly Al Qaeda.
Juan Zarate (search), the assistant Treasury secretary in the newly formed Office of Terrorism and Financial Intelligence, said the U.S. government is “very concerned” about what happened with the Oil-for-Food program that he said “provided [former Iraqi dictator] Saddam Hussein a vehicle … to do exactly what he wanted to do.”
“The problem though is complicated,” Zarate said. “There’s a wide source of potential funding for groups who want to do us harm.”
[Editor's Note: This is one in a series of articles about the U.N. Oil-for-Food program. Check back tomorrow for the final installment.]
One thing Saddam wanted to do was buy weapons to use against the United States, Zarate said. Selling arms to Saddam was illegal under U.N. sanctions in place after the first Gulf War ended in 1991 but Oil-for-Food (search), which began in late 1996, gave him the money — and the network to skirt the ban.
Case in point: the Al Wasel and Babel General Trading Company (search), which was established in 1999 in the United Arab Emirates to do business under the Oil-for-Food program.
FOX News has obtained a secret U.N. database, which shows that in 2000 and 2001 alone that company earned more than $126 million dollars selling Saddam everything from detergent to teak and white plywood.
Zarate said that Al Wasel and Babel was secretly controlled, in part, by Hikmat Mizban Ibrahim Al-Azzawi — Saddam's deputy prime minister and finance minister. Al-Azzawi — who would become the "eight of diamonds" in the deck of cards issued by the U.S. military following the downfall of Saddam’s regime in 2003 — ordered the company to collect illegal kickbacks from other Oil-for-Food suppliers, Zarate said.
Some of the money went to buy a missile system — specifically, a $174 million Russian anti-aircraft missile system that could shoot down American and British pilots then patrolling Iraqi "no fly" zones.
“He used Al Wasel and Babel … to try to procure weapons,” Zarate said, noting that U.S. Customs agents foiled the deal.
But Al Wasel and Babel kept on doing business with Oil-for-Food until this past April. That's when the U.S. Treasury Department officially identified it as a front company for Saddam.
FOX News has received no reply from Al Wasel and Babel or its parent company, the Lootah Group of companies, about the accusations it was secretly controlled by Saddam.
Treasury officials have already identified 11 front companies and nearly 200 Iraqi-controlled firms that they suspect were part of Saddam's secret and illegal network. And they say that's only the tip of the iceberg.
“One of our grave concerns is that the money … is still available to those who want to do us harm in Iraq,” Zarate said.
Another possibility is that Oil-for-Food money ended up in the hands of terrorists looking to strike in the United States — particularly Al Qaeda (search). It's something to think about in light of revelations in the report by the commission appointed to investigate the Sept. 11, 2001, attacks on America, which dispels the myth that Usama bin Laden financed Al Qaeda with a $300 million personal fortune.
The report says bin Laden had nowhere near the money to fund Al Qaeda's $30-million-a-year budget.
So where did Al Qaeda get the money?
The Sept. 11 commission doesn’t know. It can only point to an undefined "loose affiliation of financial institutions, businesses and wealthy individuals who supported extremist Islamic activities."
Could some of these also be the ones helping Saddam scam Oil-for-Food?
The Sept. 11 report reveals that Iraq and Al Qaeda started communicating after the United States kicked Saddam out of Kuwait in the first Gulf War in 1991. Bin Laden "himself met with a senior Iraqi intelligence officer" in Sudan in 1994 or 1995, the report says.
In 1996, the report says that bin Laden began having serious money problems that required him to cut back spending. One key bin Laden aide defected because he was only getting paid $500 a month.
Bin Laden sent out a number of feelers to the Iraqi regime in 1997, offering some cooperation. The next year, two Al Qaeda members reportedly went to Iraq to meet with Iraqi intelligence, and an Iraqi delegation traveled to Afghanistan to meet with bin Laden.
It was also in 1998 that Al Qaeda bombed two American embassies in Africa — after bin Laden called "for the murder of any American, anywhere on Earth." Suddenly, according to the Sept. 11 report, "Bin Laden had become the rich man of the jihad movement."
One more thing about 1998: that was the year the Oil-for-Food program really started pumping billions into Saddam's secret accounts, according to U.N. figures.
Claudia Rosett, a journalist in residence for the Foundation for the Defense of Democracies and a FOX News contributor working on Oil-for-Food stories, said the Sept. 11 commission never looked at Oil-for-Food records.
“Someone probably needs to take up the records on the Oil-for-Food end and trace it further forward,” Rosett said.
One place investigators might want to explore is a sprawling, family owned conglomerate based in Yemen called Hayel Saeed Anam. According to a FOX News computer analysis of the Oil-for-Food database, it did more than $286 million worth of business with Saddam between January 1997 and February 2001 alone.
One of the directors of Hayel Saeed Anam is Abdul Rahman Hayel Saeed.
FOX News has found with the help of a specialized international private investigation firm and Arabic handwriting experts that Saeed is a founder of a company called MIGA — Malaysian Swiss Gulf and African Chamber — registered in Lugano, Italy.
The Treasury Department’s Zarate knows MIGA well. He described it as “another very good example of a front company used as a shell to hide and move money." More than that, MIGA was designated in 2002 by the United States and the United Nations as "belonging to or associated with" Al Qaeda.
For more about MIGA, click here.
FOX News attempted to contact the founder and chairman of the Hayel Saeed Anam group about MIGA, Oil-for-Food and Al Qaeda. Plus, FOX News sought to contact Abdul Rahman Hayel Saeed. But FOX News received no reply.
Zarate would not comment on FOX News’ findings because he said his responsibility was to protect potentially sensitive information.
But Rep. Christopher Shays (search), a Connecticut Republican who is heading up an Oil-for-Food investigation in the House, said he is certain terrorists somewhere benefited from the program.
“Did this money go to terrorists? I don't think it went to the American Beauty Pageant,” Shays said. “Did it go to terrorists? I think you can be absolutely certain it went to terrorists.”