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Report finds illicit oil-for-food payments widespreadFrom Phil Hirschkorn RELATEDYOUR E-MAIL ALERTSNEW YORK (CNN) -- Nearly half the vendors who participated in the United Nations' oil-for-food program in Iraq engaged in some illicit payments to the Saddam Hussein regime, investigators have found. Of roughly 4,500 vendors who either purchased oil from Iraq or sold Iraq food, medicine, and supplies during the seven-year program, the number who paid illicit surcharges and kickbacks was more than 2,000, said Richard Goldstone, a co-chairman of the Independent Investigative Committee (IIC) led by Paul Volcker. The committee plans to publish its review of the oil-for-food vendors' behavior in its final report in October. "Companies are getting letters informing them of what allegations are likely to be made and what evidence is going to appear in the October report," Goldstone said. "They are being given an opportunity to respond to it." One reason the $64 billion program has gotten so much scrutiny is that Saddam subverted U.N. controls on oil revenue by extorting surcharges on the oil sales and kickbacks on the goods purchased. The oil surcharges ran from 10 to 30 cents a barrel, while the kickbacks were around 10 percent of the goods contracts, according to multiple investigations of the program. Those payments netted Saddam an estimated $2 billion to $4 billion. While the oil revenue went into a U.N.-controlled account at BNP Paribas, willing vendors paid the surcharges and kickbacks to accounts at other banks or front companies controlled by the Iraqi regime. The side agreements were either verbal or in letters, according to Reid Morden, executive director of the IIC. "The vast majority were people providing humanitarian aid," Morden said. A total of 248 companies, from 61 nations, imported 3.4 billion barrels of oil from Iraq while the program was in effect from late 1996 until early 2003, when the U.S.-led invasion toppled Saddam, The contracts for purchasers and sellers were approved by the U.N. Security Council. Morden said the committee's information would be shared with law enforcement officials on request, but the committee had not yet made any referrals to prosecutors. "These companies come from all over the place," Morden said. "Whether they would attract criminal charges in one jurisdiction or another would depend on national laws." Federal prosecutors in New York have brought charges against one oil company for paying illegal surcharges. That company is Bayoil, a Houston-based firm that congressional investigators have said dealt with 20 percent of the oil leaving Iraq. Federal prosecutors have obtained convictions against two people involved in the Iraq deals. The most recent was Monday's plea by Alexander Yakovlev, a 52-year-old Russian contracts officer at the United Nations who admitted soliciting hundreds of thousands of dollars in bribes from companies that did business with the world body. (Full story) An IIC report issued Monday lambasted Yakovlev and bolstered its finding that the program's director, Benon Sevan, a 67-year-old retired U.N. careerist from Cyprus, received nearly $150,000 in cash payments from a friend's company awarded Iraqi oil, allegedly at Sevan's behest. Sevan denies the allegation. A law enforcement source said the Sevan bank records disclosed by Volcker are well known to prosecutors. The United Nations has said it is willing to lift his diplomatic immunity should prosecutors seek to levy charges. Before the IIC's final report, the panel in September will issue its last word on Secretary-General Kofi Annan and his son, Kojo, who worked for Cotecna when that company was chosen by the United Nations in the late 1990s to authenticate humanitarian goods shipments entering Iraq. Recently obtained e-mails among Cotecna executives caused Volcker's staff to take another look at whether the United Nations favored Cotecna because of the Annan connection. The IIC previously concluded there was no evidence that the elder Annan influenced the deal. (Full story) Kojo Annan, who refused for months to speak to investigators, is cooperating again. He answered questions in the past month in London. Liz Neisloss contributed to this report. 
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