The Iraqi government filed a lawsuit in a US civil court to recover damages from companies who allegedly paid kickbacks to ex-Iraqi leader Saddam Hussein.
NEW YORK, June 30 (Reuters) - The Iraqi government sued
dozens of companies, including oil giant Chevron Corp., for
more than $10 billion on Monday, saying they paid kickbacks to
former Iraqi leader Saddam Hussein's government under the U.N.
The civil lawsuit, filed in U.S. federal court in
Manhattan, seeks to recover damages from companies investigated
by a U.N.-commissioned inquiry, claiming they cheated the
Iraqi people out of benefits of the $67 billion U.N. program.
The U.N. oil-for-food program, which ran from 1996 to 2003,
was created to help Iraqis cope with U.N. sanctions after Iraq
invaded Kuwait in 1990. The program allowed Baghdad to sell oil
in order to buy humanitarian goods.
The lawsuit says billions of dollars were lost, "all of
which were directly translatable into food, medicine and other
humanitarian goods that were supposed to reach the Iraqi
Among the individuals named in the lawsuit are Texas oilmen
Oscar Wyatt and David Chalmers, who both admitted to paying
millions of dollars in kickbacks to Saddam's regime.
But a U.N.-commissioned inquiry headed by former U.S.
Federal Reserve Chairman Paul Volcker found the program was
corrupted by 2,200 companies from 66 countries that paid $1.8
billion in kickbacks to Iraqi officials to win supply deals.
The lawsuit follows U.S. criminal investigations into the
program, which produced the convictions of individuals,
including Wyatt and Chalmers, and oil companies named in the
complaint, including Chevron, which agreed to pay $30 million
to resolve criminal and civil liabilities.
Most of the companies named in the lawsuit could not
immediately be reached for comment.
The lawsuit said the defendants had violated U.S.
racketeering laws including mail and wire fraud and money
laundering. Chevron and Swiss oil trading firm Vitol were also
accused of breaching their fiduciary duties.
"The corruption of the United Nations Oil-For-Food
Programme (OFFP) has been described as the largest financial
fraud in human history, but its impact on the people of Iraq
went far beyond financial loss," the lawsuit begins. "The
corruption of the OFFP affected the very lives and health of
the Iraqi people."
Other companies named in the lawsuit include European bank
BNP Paribas, drug makers GlaxoSmithKline and Roche Holding, and
units of drug company Schering-Plough, as well as several units
of Switzerland's engineering company ABB Group.
The lawsuit also names AWB Ltd -- Australia's largest wheat
exporter. A 2006 Australian government judicial inquiry found
the company paid $222 million in kickbacks to Saddam's regime
for wheat sales.
"We have not yet received the court documents. Once we have
reviewed the documents we will respond accordingly," AWB
spokesman Peter McBride said.
AWB faces several suits in the United States over its
business in Iraq. One case is on behalf of Iraqi citizens
claiming it contributed to injuries and damages sustained by
the plaintiffs by giving substantial assistance to the
government of Saddam Hussein.
The U.S. criminal prosecutions found Wyatt and Chalmers,
who acted on behalf of his two oil corporations Bayoil Supply
and Trading and Bayoil USA Inc. and other companies, including
El Paso, complied with the then-Iraqi government's demands to
pay secret surcharges, in violation of U.N. sanctions and U.S.
law, to front companies and bank accounts controlled by the
Wyatt, the founder of Houston's Coastal Corp, met directly
with Saddam and became the most prominent figure imprisoned
over the scandal when he was sentenced to one year in prison in
A self-made billionaire who started out as a cropduster and
World War Two pilot, Wyatt went on to found Coastal in 1955,
selling it to El Paso Corp in 2000 and 2001 for $17 billion.
Date created : 2008-07-01