Revealed: How oil-for-food reaped a web of contracts for Zureikat

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Indy Politics

The Jordanian businessman named as George Galloway's man in Iraq made money from a web of deals under the UN's oil-for-food programme set up to help the Iraqi people.

Critics of the programme, which has delivered humanitarian aid worth £17bn to Iraq since 1997, allege that Saddam Hussein's regime made up to £1.25bn a year by manipulating the project and smuggling.

Fawaz Zureikat, 48, said he had won a series of legitimate contracts under the oil-for-food programme ranging from supplying food to delivering spare parts for industry.

He declined to give details of his work and when asked whether he had been requested to pay a kickback to the Iraqi regime, he replied: "No comment". He said he won his contracts because of his ministerial contacts from working in the country for 17 years. "I cannot talk about my business, this is private," he said. "It's a good business... generating enough money for me to live, my family to live and to support activities I care about."

Mr Zureikat, who trained as an engineer in Baghdad and worked for the Iraqi oil ministry, is reported by The Daily Telegraph to have met Iraqi intelligence officers to negotiate on Mr Galloway's behalf for oil contracts. Both Mr Galloway and Mr Zureikat deny any involvement in such meetings.

The oil-for-food programme was set up as a temporary measure to relieve suffering of the Iraqi population after five years of sanctions following Iraq's invasion of Kuwait.

A humanitarian disaster prompted a reassessment and, despite the initial intransigence of Iraq, the oil-for-food programme was conceived. The UN said there were strict controls to prevent its abuse but, despite delivering aid on which the population has depended, critics said it was a useful source of backhanders for the regime.

The programme allowed for Iraqi oil to be sold with two thirds of the proceeds going towards humanitarian needs. The remainder went on war reparations and administration. At the start of the programme in 1996, Iraq was allowed to sell £1.25bn of oil every six months to middlemen and companies it selected. The amount of oil allowed to be sold was increased until the cap was removed in December 1999. Despite the name of the programme, it was gradually expanded to cover 24 different sectors, including irrigation, health and agriculture. The oil middlemen made money by selling on the international markets.

Under the system, more than 1,000 companies from dozens of countries applied to deal in Iraqi oil. They had to be vetted by their own governments but critics said the procedure was cursory at best.

John Fawcett, who investigated Saddam's sources of funding for the Coalition for International Justice, said: "We estimated that just on the oil sales side there were $200-$300m in kickbacks. Anybody that you see buying oil from the second half of 2000 and virtually all of 2001, you can assume there was a kickback. The UN oversight was virtually nil. The system is absolutely rotten."