Iraqis 'used oil to bribe politicians'

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Saddam Hussein exploited a loophole in the United Nations oil-for-food programme to buy influence with officials and politicians, the Iraq Survey Group report claims.

The report lists countries and hundreds of individuals, including key figures in the United Nations, who allegedly received vouchers from Saddam enabling them to buy Iraqi oil at discount prices.

It claims Benon Sevan, the former chief of the oil-for-food programme, profited from Saddam. George Galloway, the former Labour MP, is also listed in the report as having received two allocations of 3,000 barrels of oil. Both protested their innocence yesterday, denying allegations of having profited from either Saddam's regime or the UN programme.

Others featuring on the list include Vladimir Zhirinovsky, the founder of the Russian Liberal Democrat Party, and Charles Pasqua, a former French interior minister.

The allegations are being investigated by at least five US congressional committees, the Iraqi Interim Government and a UN inquiry headed by Paul Volcker, the former chairman of the US Federal Reserve.

The oil-for-food programme was established in Iraq as part of the UN trade embargo implemented after Saddam invaded Kuwait. The scheme was designed to enable Iraq to sell limited amounts of oil and use the proceeds to buy humanitarian supplies abroad.

However, as Saddam was able to choose who could buy Iraqi crude oil, he is said to have exploited the system by awarding the right to purchase to his friends and allies. They were able to sell on those rights to oil traders for a profit. The oil traders would then lift the oil from Iraq to sell it on the world market. The scheme was scrutinised this year when al-Mada, a Baghdad newspaper, published a list of companies and individuals who allegedly received vouchers.

Yesterday, Mr Sevan, who was in charge of the scheme from 1997 until it closed down after the war last year, reiterated his innocence.

Mr Galloway also issued a strenuous denial. "I have never visited the Iraqi oil ministry or to the best of my knowledge met any ministry official," he said. "I have never seen a barrel of oil, owned one, bought one or sold one and neither has anybody on my behalf. No one has produced a scintilla of evidence in support of the allegation that I have profited from Iraq in any way because no such evidence exists."