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Investigators Say Syria Profited Illegally from Iraqi Oil For Food Program

US investigators say the Syrian government is among those to profit from the illegal sale of Iraqi oil under the United Nation's controversial Oil for Food Program. The State department says Syria could face penalties if it doesn't return millions of dollars to the new government of Iraq.

Speaking to members of Congress in Washington, government experts outlined an intricate financial scheme that generated billions of dollars in illegal oil revenue for Iraq. State Department documents released to the committee focus on Syria's role in the oil for food scandal, in which oil profits that were meant to feed Iraqi citizens were funneled into private bank accounts.

Committee chair Ileana Ros-Lehtinen says Syrian banks helped launder billions of dollars for Iraq's former leader Saddam Hussein. "Far from providing the Iraqi people its intended humanitarian assistance," she said, "the arrangement became astonishingly corrupt, with UN and foreign officials and governments systematically abusing the system and receiving hefty sums of money in kickbacks from the Iraqi regime. Thus the food for oil program became the biggest heist in recent history."

The Internal Revenue Service has launched a criminal probe into the activities of the Commercial Bank of Syria in Damascus and in Lebanon. The State Department's Deputy Assistant Secretary of State Elizabeth Dibble said he investigation has uncovered some startling details.

"According to estimates from Iraq's state oil marketing organization, known as SOMO, from January 2000 until July 2003, the Iraq-Syria trade protocol generated approximately $3.4 billion from the sale of illicit Iraqi crude oil and Iraqi petroleum products," said Ms. Dibble.

The State department is pressuring Syria to turn over all illegal assets to the Development fund for Iraq. Syrian President Bashar Assad has complied by turning over 120 million dollars in oil profits but investigators say more than a quarter of a billion dollars remains unaccounted for.

US Lawmakers are concerned some of the money is being used to fund illegal activities.

"There's never been a any real accounting of themoney Iraq earned from these illicit deals," says Victor Comras, former member of the U.N.'s Al-Qaida monitoring team. "There are still vast amounts of money out there in Syria, Lebanon, the Middle East and elsewhere. We can only believe that some of these funds are now supporting the insurgents in Iraq and perhaps terrorism farther afield."

The U.N.'s Oil for Food program was initiated after Saddam Hussein's 1990 invasion of Kuwait, delivering as much as $40 billion in aid by some accounts. Previous allegations say other countries, including those friendly to the United States, illegally purchased oil from Iraq. They include Jordan, Egypt and Turkey.

Politicians from other US allies have also been implicated in the scheme. Congressman William DelaHunt says a broader investigation is needed. "Just to select Syria out on this particular occasion opens us to charges of being selective and therefore critical because our pals and our allies are very much implicated in this issue," he said.

The State department says it's considering sanctions against Syria if it refuses to return what the US believe may be as much as $262 million in illegal oil profits.