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Iraq Earns Billions from Improper Activities, says Report - 2002-09-18

Iraqi President Saddam Hussein and his family will earn more than $2 billion this year from smuggling operations and manipulating the United Nations' oil-for-food program. A new report says the amount of illegal money flowing into Iraq has risen considerably since the U.N. program began in 1996.

The report by the Washington-based Coalition for International Justice says Iraq is systematically exploiting the oil-for-food program, and Saddam Hussein will pocket $2.5 billion this year.

The report says 90 percent of the illegal money will be earned through smuggling oil, mostly to countries in the Middle East.

Susan Blaustein is a senior advisor to the human rights group and an author of the report on illicit sources of revenue to the Iraqi government.

Ms. Blaustein says despite more than a decade of sanctions, Saddam Hussein has stayed in power by illegally acquiring wealth to finance cronyism and purchase weapons.

"What our report concludes is that the U.N. sanctions program has been an absolute failure in strangling Saddam's finances," she said. "That it is not intended to do that, that it is intended to assist the Iraqi people, but because of its structure it can not get around Saddam Hussein. Saddam Hussein has not only not been delivering the aid to the Iraqi people, but has been using the program to rob the Iraqi people of their natural due and to make money and to possibly procure weapons on the side."

Iraq is allowed to export oil and is supposed to use the money to pay for food, medicine and other humanitarian needs of the Iraqi people.

Iraq makes about $6 billion a year from the program, but the report by the Coalition for International Justice says Saddam Hussein and his family are making billions more through kickbacks and smuggling operations.

The report says the Iraqi government is generating more than one billion dollars a year by pumping oil through a recently reopened pipeline to Syria.

Susan Blaustein says other countries, including some members of the U.N. Security Council, are ignoring the illegal trade.

"What we would hope is that the international community would face up to the fact that this program, as much as it has cost, has been a complete failure in its intention," she asserted. "That is depriving Saddam of the capacity to develop and procure and use weapons and weapons of mass destruction and we hope there would be some new thinking as to how that might be done."

The report says the lax enforcement of the oil-for-food program by the international community is allowing Saddam Hussein to use the U.N. program to consolidate power and is therefore jeopardizing efforts to bring down his government.