America is looking into reports that Saddam Hussein diverted money from a U.N. aid program for Iraq, Secretary of State Colin Powell (search) said Saturday during a stopover in Kuwait.

U.S. congressional investigators have charged that Saddam's regime amassed $10 billion through oil smuggling, illegal surcharges and kickbacks from the U.N. oil-for-food program. An Iraqi newspaper has published a list of about 270 former Cabinet officials, legislators, political activists and journalists in about 46 countries suspected of profiting from the scam.

"We are concerned, deeply concerned, that money that was supposed to be going to help the Iraqi people was diverted by Saddam Hussein (search), once again demonstrating the nature of that regime," Powell told reporters.

"That money was not used for food or health care or clean water," he said. "It was used for palaces and debauchery."

Powell said Washington would assist the investigation that U.N. Secretary-General Kofi Annan (search) proposed Friday.

The oil-for-food program, which ended in November, was set up by the U.N. Security Council to enable the Saddam regime to sell oil on condition that the proceeds were used to buy humanitarian goods for the Iraqi people and pay reparations for the 1991 Gulf War.

Powell spoke at the end of his six-day tour of Asian and Middle East nations. During his hours in Kuwait, he talked with the emir, the foreign minister and the prime minister.

Powell arrived from Saudi Arabia, where he said the United States would help Arab countries move toward democracy, but it has no intention of imposing that system.

While the United States stands ready to help, "each nation has to find its own path and follow that path at its own rate of speed," he said.

Powell said he was encouraged that the Arab League (search) is discussing the possibility of adopting a resolution calling for political reform. He said he had contacted many Arab leaders on what a reform resolution might contain.