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Russian Politicians Implicated in Oil-for-Food Scandal

A U.S. Senate committee investigating corruption in the U.N. oil-for-food program has released a report alleging that Russian politicians received millions of barrels of Iraqi oil in exchange for their support of Saddam Hussein's regime.

The Senate Permanent Subcommittee on Investigations says it has found that Russian politicians benefited from a scheme created by the regime of the now deposed Iraqi leader Saddam Hussein.

The U.N. program, which began in late 1996 and ended in 2003, was designed to alleviate the effect of sanctions on Iraq by allowing Baghdad to sell oil to buy humanitarian supplies.

But the Senate panel found evidence to support allegations that the Iraqi government used the program to buy political influence. It concludes the Iraqi regime steered a massive portion of its oil allocations toward U.N. Security Council members that were perceived as sympathetic to Iraq's desire to have sanctions lifted.

Russia topped the list, according to the committee. In fact, the report says Russian individuals and political parties received about 30 percent of all the oil allocated during the course of the program.

The report says the allocation holders essentially became gatekeepers to Iraqi oil, selling their allocations to traditional oil buyers with a commission of up to 30 cents a barrel. Since most allocations amounted to millions of barrels of oil, such commissions reached hundreds of thousands of dollars per allocation.

One political party that received an especially large number of allocations was the Unity Party, now known as the Unified Russia Party, a pro-Kremlin party associated with Russian President Vladimir Putin. However, there is no evidence that President Putin was aware of the scheme.

The reports says the Russian Ministry of Foreign Affairs, the Communist Party and the Liberal Democratic Party of Russia, founded by ultranationalist Vladimir Zhirinovsky, also received oil allocations. In addition, the Russian Presidential Council, made up of advisors appointed by the Russian president who drafted presidential policy and decrees, received oil allocations.

The Senate committee report details examples of where Russia took positions at the Security Council that favored Saddam's regime and opposed the position of Security Council members who sought to enforce the sanctions.

For instance, in 2000, the United States proposed a resolution to restrict the illicit trade occurring at Iraq's border in violation of the sanctions. But Russia threatened to use its veto on the proposal, effectively ending any efforts to pass the resolution.

The report says Saddam told his subordinates to "show gratitude" to the Russians for supporting Iraq in the Security Council on the issue. That gratitude entailed giving the Russians additional oil allocations.

Russian officials have not responded to the Senate report.

While oil allocation holders made millions of dollars in commissions by selling their allocations, the Senate committee found that Saddam Hussein also made money through the scheme by attaching surcharges to the allocations.

Senator Norm Coleman, a Minnesota Republican and chairman of the Senate panel, says "Saddam Hussein was able to rip off that program for billions of dollars."

The committee's report comes after a year-long probe that included interviews with 16 former Iraqi officials, including Deputy Prime Minister Tariq Aziz and Vice President Taha Yasin Ramadan, both of whom are in U.S. custody.

The report comes days after the committee released a separate report citing evidence that British lawmaker George Galloway and former French Interior Minister Charles Pasqua accepted oil allocations under the scheme. Both men have denied any wrongdoing in the oil-for-food program.

Mr. Galloway has been invited to testify at a Senate committee hearing into the oil-for-food scandal Tuesday.

At the United Nations, Secretary General Kofi Annan says he does not believe the allegations coming out of the Senate probe will derail efforts to reform the world body. "I think the member states, who themselves are very much aware of how the oil-for-food (program) was set up, how it was managed, how it was organized, I think are much more sanguine about the facts than most other people, and I hope they will focus on the work ahead and strengthen this institution. And so I do not expect it to derail the reform process. We are determined to go ahead and I urge all Member States to go ahead and do so. For some, the oil-for-food crisis will never die down," he says.

The Senate panel is one of several congressional bodies investigating allegations of wrongdoing in the oil-for-food program.