Iraqi citizens filed a $200 million lawsuit against a prominent European bank and an Australian wheat exporter, saying they were cheated out of humanitarian goods when the companies permitted the United Nations oil-for-food program to be corrupted.
Friday's lawsuit, which sought class-action status on behalf of northern Iraqis, said the bank, BNP Paribas, and AWB Limited, the largest humanitarian goods provider under the oil-for-food program, cheated the citizens of Iraq from June 10, 1999 to June 3, 2003.
The civil action sought at least $200 million in damages under the federal Racketeer Influenced and Corrupt Organizations Act, the Foreign Corrupt Practices Act and the International Emergency Economic Powers Act.
According to the lawsuit, residents of the Arbil, Dihouk and Suleimaniyeh areas of Iraq claimed they did not receive the full benefits to which they were entitled.
The lawsuit said the companies stole from the Iraqis "by engaging in a brazen kickback scheme" in which money earmarked for the benefit of Iraqis were instead improperly transferred "into the coffers of Saddam Hussein's corrupt Iraqi regime or used to indemnify goods suppliers, including AWB, for the bribes they had paid Iraq."
The lawsuit said the companies disguised and misrepresented the kickbacks to make them appear to be legitimate costs. It also accused them of knowing or recklessly disregarding that money was being paid illegally to the government of Saddam Hussein.
BNP paid as much as $1.5 billion in kickbacks to Hussein's government while AWB paid more than $200 million, the lawsuit claims.
BNP is headquartered in Paris, France, but has offices in the United States, including New York. Edwina Frawley, a BNP spokeswoman, said she had no immediate comment Friday.
A government-commissioned report in Australia was released several weeks ago saying that AWB paid $220 million in kickbacks to former Iraqi leader Saddam Hussein's regime from 1999 to 2003 to secure lucrative wheat contracts under the oil-for-food scheme.
Under the oil-for-food program, AWB, which had sold wheat to Iraq since 1948, sold 6.8 million tons of wheat to Iraq, receiving more than $2.3 billion in payments, the lawsuit said.
AWB did not immediately respond to an e-mail message sent to the company Friday. On its web site, the company said it was not responding to allegations regarding the oil-for-food program until the completion of an investigation.
"In the meantime, we seek the support and understanding of our farmers, shareholders and customers as we manage through this difficult period," it said.
The statement said AWB and its predecessor, the Australian Wheat Board, had earned an excellent reputation as it marketed Australia's wheat to the world for more than 65 years.
"Regretfully, AWB's reputation has been significantly damaged as a result of the company's participation in the United Nations Oil-For-Food Program and subsequent media coverage," it said.
Iraq no longer permits AWB to send wheat there.
In October 2005, a U.N.-backed investigation said in a report that about 2,200 companies in the oil-for-food program, including corporations in the United States, France, Germany and Russia, paid a total of $1.8 billion in kickbacks and illicit surcharges to Saddam Hussein's government.
The investigation that looked into the $64 billion program was led by Paul Volcker, a former Federal Reserve chairman. The investigators reported that companies and individuals from 66 countries paid illegal kickbacks in a variety of ways.