House Panel to Blast Oil-for-Food Program

Congressional investigators have uncovered new evidence of corruption within the U.N. Oil-for-Food program (search) and are expected to unleash a fresh barrage of accusations and criticisms next week, FOX News learned Friday.

A memo, obtained by FOX, was prepared for members of the House subcommittee on National Security, Emerging Threats and International Relations. The panel, chaired by Rep. Christopher Shays (search), R-Conn., will hold a hearing on the matter next Tuesday.

The committee will be highly critical of what it says is the lack of transparency about Oil-for-Food, a program the United Nations created in late 1996 to allow the Iraqi government to sell oil so it could buy humanitarian goods. But officials believe billions of dollars were diverted to Saddam Hussein and his associates.

Investigators said the list of oil purchasers was not known and the list of humanitarian providers was not known. Plus they found that not only were internal U.N. audits not released, they continue to be withheld from both member states of the United Nations as well as from the public.

But the committee will also single out certain Security Council (search) nations as being complicit in the corruption, among them France, Russia and China. Businesses from these nations, the memo says, made billions through their involvement with Saddam’s regime.

The committee also has new evidence of how the Iraqi regime abused the program and continued to export oil above and beyond the amounts it should have, thereby generating billions of dollars in extra revenue.

The memo says that in February 2002 the tanker Clovely was loaded with oil by the Iraqis despite that fact that its letters of credit had expired. Officials from Saybolt, the company that was supposed to monitor all Iraqi oil exports, said they tried to stop the loading but they could do nothing because of the limited powers the United Nations gave them.

A Saybolt executive is due to testify at next Tuesday's hearing as well as senior figures from Cotecna (search), the company that monitored imports into Iraq under Oil-for-Food and BNP Paribas (search), the French bank that handled most of the scheme's money. U.N. officials will not be there to testify.

A U.N. spokesman said the information cited in the memo has always been in the hands of U.S. government officials. Plus, on Nov. 23 of last year, the United Nations provided the U.S.-led
Coalition Provisional Authority in Iraq with its entire Oil-for-Food database, the spokesman said.

On April 15, U.N. Secretary-General Kofi Annan (search) was quoted as saying that “transparency is the only way to deal with such allegations [Oil-for-Food corruption], and by far the best way to prevent corruption.”

To read a copy of the congressional report, click here (pdf).