Live-blogging Oil For Food indictments
The tv prep says Benon Sevan is still under scrutiny and the details of the indictment haven’t been released. However, we’re dealing with a “scheme” to make kickbacks to Saddam. But it look slike the news conference will be delayed.
Fascinating. Fox has a Nation writer on camera who says this is a Texas scandal, not a UN scandal. [ED: Will the Nation rename the scandal “Oil For Longhorns”?]
David N. Kelley US Atorney conducted the press conference (10:48 AM EDT).
OFF= Oil For Food
First Allegation: Bayoil tried to fix the price of oil under OFF. Under OFF, Iraqi oil could be purchased by people or entities the right to buy Iraqi oil by the government of Iraq.
Second allegation: South Korean Tongsun Park conspired to act as agent for Saddam
As for Bay Oil– Kelley said Saddam corrupted OFF by requiring a “secret surchange” (mid-2000 through March 2003) for oil deals. The funds did not go to the UN account, but went through Saddam’s front companies.
Bayoil defendants allegedly did three things:
(1) Paid inflated commissions to oil industry brokers knowing the commissions were earmarked for kickbacks to Saddam.
(2) Instead of funneling aid to needy, the funds were sent to Saddam’s front companies
(3) Fixed oil prices. Oil prices were “artificially deflated.”
Kelley then outlined the payment process.
Here are the charges against the Bayoil defendants:
(1) wire fraud and wire fraud conspiracy charges (up to 40 years in prison)
(2) engaging in prohibited financial transactions with a country supporting international terrorism (ten years)
(3) violations of the “emergency international powers act” (ie, dealing with Iraq, 12 year max)
Two of the indicted have been arrested in Houston. An extradition request will be made for the third actor in the Bayoil deal (he’s apparently in the UK).
Mr. Park is charged with conspiring to work for Saddam. Park allegedly received up to two million dollars and Kelley says Some of the money was delivered via diplomatic pouch. Some of the money for Park was supposed to be used to quote “take care of one of the UN officials with whom Park negotiated.”
That’s the biggest prosecutorial bomb, it seems. Now Fox and –quick check– it seems everyone else (CNN,MSNBC) have left the news conference. And my one CSPAN channel wasn’t covering it.
Do these indictments help Bolton? Of course they could. Bolton’s nomination hearings have been delayed until next week and the indictments will surely be a topic for discussion. (ED: Were the arrests and press conference timed to help Bolton? Don’t know, but given the timing of events, it’s an inevitable question.)
But Bolton is only part of the bigger strategic issue which is UN accountability for incompetence and corruption. Accountability is the route to genuine organizational reform.
As for the Nation writer’s assertion this is a “Texas scandal”: he has a point. Kelley indicated the Bayoil kickback scheme took place outside of the OFF program and a Texas company is involved. But “Texas scandal” is a decidedly narrow reading. What Kelley described is a Texas scandal, and an oil scandal, and a Baghdad scandal, and a British scandal– all tied to abusing the UN program. But that’s the Bay Oil allegations and indictments. The allegations regarding Mr Park look like a Saddam and UN deal. We’ll need more details on his situation.
UPDATE: Here’s a link to a NY Times story on the indictments (similar to the earlier post using the AP wire report).
UPDATE 2: Via counter-terrorism blog (ht Instapundit), links to the indictments.
I know credentialed UN diplomats have diplomatic immunity and so they can get away with scofflawing parking tickets, etc. But can the US prosecute non-US UN employees for breaking American laws while at the UN? Is the UN US territory subject to US service? Is the UN a non-US diplomatic teritory like an embassy? This seems likely to define to whom UN employees are accountable or if they are unaccountable. I have a feeling I know the answer and it explains why Clinton and his lawyer David Craig have been so helpful to Kofi and Kojo.
Comment by Richard Heddleson — 4/14/2005 @ 10:02 am
David Chalmers, who puts the “Tex” in “Texas scandal”, gets mentioned in this LA Times story from last Oct 9 (apparently, Bay Oil was mentioned in a CIA Oil for Food report last fall). And this LA Times follow-up tells us this about Wyatt, a more central figure (Chalmers’ company, Bay Oil, was named in the report; Wyatt was one of three Americans named; Chalmers is a former associate of Wyatt):
Comment by Tom Maguire — 4/14/2005 @ 10:51 am
But can the US prosecute non-US UN employees for breaking American laws while at the UN? If I understand correctly, it can, but only if the UN agrees to lift the immunity of those employees. The UN can’t be forced to do this, although obviously a formal and public request would put some pressure on them.
Comment by jaed — 4/14/2005 @ 11:03 pm