Text: New Data Indicate Saddam Hussein Took $10 Billion From U.N. Oil Program

U.S. congressional investigators estimate that Saddam Hussein's regime received more than $10.1 billion in illegal revenues related to the United Nations' oil-for-food program from 1997 to 2002.

In a March 18 preliminary report to a House of Representatives panel, Congress' General Accounting Office (GAO) said that the former Iraqi government received $5.7 billion from oil illegally smuggled out of Iraq and $4.4 billion in illicit surcharges on oil sales and commissions from suppliers.

An earlier GAO estimate covering oil-for-food program activities through 2001 found that Saddam Hussein's regime had taken $6.6 billion in illegal revenues from the U.N. program.

The new estimate, submitted during a hearing of the House Financial Services Subcommittee on Oversight, includes 2002 data from oil revenues and contracts and newer estimates of illicit commissions from commodity suppliers, GAO said.

Under the oil-for-food program, the Iraqi government was permitted to sell oil only if the money was used to buy humanitarian goods and pay victims of the 1991 Gulf War. Other oil sales were prohibited under the U.N. embargo imposed after Iraq's 1990 invasion of Kuwait. The oil-for-food program expired in November 2003.

The GAO report warned that the U.S.-led campaign to find and repatriate Iraqi assets faces challenges, including the planned transfer of sovereignty to an interim Iraqi government in June.

"It is uncertain whether the new government will allow the United States to continue its hunt for the former regime's assets," the report said.

Overall, the United States has had "varying results" in its campaign to identify, freeze and repatriate Iraqi assets, GAO said. "While the amount of hidden assets accumulated by the former Iraqi regime is unknown, estimates range from $10 [billion] to $40 billion in illicit earnings."

In separate testimony before the same House subcommittee, Deputy Assistant Treasury Secretary Juan Zarate said that over the past year almost $2 billion in Iraqi assets outside the United States and Iraq have been newly identified and frozen. Other countries have transferred about $750 million dollars to the Development Fund for Iraq (DFI), and another $1.3 billion in cash and valuables have been recovered inside Iraq, he added.

The Treasury Department on March 18 also moved to capture more Iraqi money hidden around the world by formally submitting to the United Nations the names of 16 members of Saddam Hussein's family and 191 quasi-governmental companies, Zarate said.

U.N. Security Council Resolution 1483 requires member states to freeze accounts and financial assets that might hold Iraqi money and transfer the funds to the DFI.

"Every day, we are learning more about the maze of Hussein's money trails, and every day, we take concerted efforts to get other countries to identify Iraqi assets and transfer the funds that they have already frozen," Zarate said.

"This is a process that, by its very nature, will take time," he added.

The full text of Zarate's testimony is available on the Web at: http://www.treas.gov/press/releases/js1244.htm

The text of the GAO report is available at: http://financialservices.house.gov/media/pdf/031804gao.pdf

Following is an excerpt from the GAO report summarizing its findings to
date:

 

United States General Accounting Office (GAO)
Recovering Iraq's Assets
Preliminary Observations on U.S. Efforts and Challenges

March 18, 2004

Summary
 

We estimate that from 1997 through 2002, the former Iraqi regime acquired $10.1 billion in illegal revenues related to the Oil for Food Program -- $5.7 billion in oil smuggled out of Iraq and $4.4 billion in illicit surcharges on oil sales and commissions from suppliers. This estimate is higher than our reported May 2002 estimate of $6.6 billion because it includes 2002 data from oil revenues and contracts under the Oil for Food Program, newer estimates of illicit commissions from commodity suppliers.

The United States has tapped the services of several U.S. agencies and used recently developed domestic and international tools in its efforts to recover Iraqi assets worldwide. Led by the Department of the Treasury, about 20 government entities have combined efforts to identify, freeze, and transfer the former regime's assets to Iraq. The United States also used the International Emergency Economic Powers Act (IEEPA), as amended by provisions in the USA Patriot Act of 2001, to confiscate the property of the former Iraqi regime under U.S. jurisdiction and vest the assets in the U.S. Treasury. Finally, U.N. Security Council Resolution 1483 required all U.N. members to freeze without delay and immediately transfer assets of the former Iraqi regime to the new Development Fund for Iraq (DFI).

U.S. efforts to recover Iraqi assets have had varying results.

-- In March 2003, the U.S. government quickly took control of Iraq's assets in the United States. From May to September 2003, the United States transferred $1.7 billion to Iraq to help pay for the salaries of Iraqi civil servants, ministry operations, and pensions. The United States also transferred $192 million to the DFI in July 2003. Most of the vested funds have been spent on reconstruction.

-- Within Iraq, U.S. military and coalition forces seized about $926 million of the regime's assets. The CPA used these funds for Iraqi projects, ministry operations, and liquefied petroleum gas purchases.

-- Other countries froze about $3.7 billion of Iraqi regime assets in compliance with U.N. Security Council resolutions. As of March 2004, Treasury reported that more than 10 countries and the Bank for International Settlements had transferred approximately $751 million to the DFI. State Department and Treasury officials continue to work diplomatically with other countries to expedite the transfer of remaining Iraqi assets.

-- Little progress has been made in identifying and freezing additional Iraqi assets that remain hidden. While the amount of hidden assets accumulated by the former Iraqi regime is unknown, estimates range from $10 billion to $40 billion in illicit earnings.

The United States faces key challenges in recovering Iraq's assets. First, recovering the former regime's assets was not initially a high priority in the overall U.S. effort in Iraq. Second, U.S. expectations for the quick transfer of funds may have been overly optimistic given the legal capabilities of some countries. Third, the impending transfer of sovereignty to an interim Iraqi government may further complicate U.S. efforts to locate and recover assets of the former regime.

(end text)

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)