British link investigated in oil-for-food scam

Customs and Excise is investigating a British link to the multimillion-pound corruption scandal of Iraq's oil-for-food programme operated during Saddam Hussein's regime.

Money was allegedly siphoned off from the scheme to fund pressure groups which fought international sanctions against Saddam's regime. The campaigns were backed by MPs, including George Galloway, the independent MP for Glasgow Kelvin, who was expelled by the Labour Party. There is no suggestion that any British MPs profited personally or knew about the alleged corruption.

The United Nations oil-for-food programme, which allowed Iraq to use some of its oil revenues to buy food and aid between 1996 and last year, is believed to have been used by Saddam to buy influence, break sanctions and sustain his regime and military machine. Some estimates suggest he earned £2.6bn in illegal surcharges and "service fees" on UN-supervised contracts.

The Customs investigation was disclosed by Jack Straw, the Foreign Secretary, in written evidence to the Foreign Affairs Committee. He said: "I can confirm that the Government has been given copies of documents relating to the corruption allegations, and that these name a small number of UK individuals and entities." He assured MPs that the "entities" named in the documents, which emerged in Baghdad after last year's war, were not linked to the British government.

The "individuals" are understood to be three Middle East businessmen living in Britain. Two gave money to the Mariam Appeal run by Mr Galloway. A third ran an anti-sanctions campaign. The three are alleged to have sold oil rights at a profit.

The committee said in yesterday's report: ""We recommend that the Government provide further information on the progress of the inquiry into allegations of corruption in the oil-for-food programme, including any further information on UK involvement."

The MPs also expressed concern about the use of private military and security companies in Iraq and Afghanistan.