RENEE MONTAGNE, host:
And we take you to other news. A UN investigation into the Iraq oil-for-food program has disclosed that more than half of the 4,500 companies involved paid illegal kickbacks and surcharges to Saddam Hussein's regime. The independent commission is headed by Paul Volcker, former chairman of the Federal Reserve. A final report is being released today. It details how companies from more than 60 countries were able to evade UN controls to make bogus income for themselves and for Saddam Hussein during the seven years the program was in operation. Now this was a $64 billion program. NPR's Corey Flintoff joins us now to discuss the report's findings.
And how much money are we talking about in illegal payments?
COREY FLINTOFF reporting:
Well, Renee, Chairman Volcker says his investigation shows nearly $2 billion in various kinds of, you know, some kickbacks, some bribes. Volcker is stressing, though, it's not just the cash amount even though that's huge. It's the indication of how pervasive this corruption was. More than half the companies involved in the oil-for-food program are thought to have manipulated this process one way or another.
It should be noted here, and the investigators stressed this, that the investigation comes from Iraqi records and Iraqi sources, which are not regarded as being fully reliable. So the investigators are saying that just because a company has its name on the list doesn't necessarily mean that it's guilty.
MONTAGNE: But are they all coming from Iraqi sources or is there, you know, corroborating information?
FLINTOFF: Well, there is, and in fact, there's a striking amount of record keeping that was apparently done. The report has tables in it that show how payments were allegedly made, so you know, there's ledger work here that surprises you, you know, considering this is all illegal transactions.
MONTAGNE: And how were these companies--we're talking about 2,200 companies--able to skirt UN controls?
FLINTOFF: Well, there were two ways of doing business under the oil-for-food program. Companies could either buy Iraq's oil or they could supply the food and the medicine and the humanitarian goods that the money was supposed to buy. The Volcker report says that actually most of the companies that were allegedly involved in corruption were suppliers, and they were accused of paying surcharges to Iraqi officials for bringing their goods into the country. According to the report, that amounted to about $1.5 billion. There were also some traders who bought Iraqi oil and they're accused of things like paying below-market prices for the oil and then kicking back part of their profits to Iraqi officials. According to the report, that would have amounted to about $300 million.
MONTAGNE: France and Russia, two of the countries most opposed to overthrowing Saddam, benefited most, it turns out.
FLINTOFF: Right. The report says that Russian firms actually make up the largest number of the companies that were implicated in corruption, with French companies also being pretty heavily involved. It's not clear just yet how many US companies might be involved, although Mike Holtzman, who's the spokesman for the investigation, said that there are some well-known world-class companies that are going to be named here. It's not clear whether those are going to be American companies or not. A few people have actually already been named and charged, and those include a couple of oil men from Texas, as well as a former French ambassador to the United Nations.
MONTAGNE: Well, just briefly, throughout the program Saddam was also selling oil on the black market, and that was bringing in an awfully lot more money even.
FLINTOFF: It's not clear how much Saddam made on these deals, either through kickbacks or smuggling. But I've seen estimates as high as $8 billion.
MONTAGNE: Corey, thanks very much.
FLINTOFF: Thank you, Renee.
MONTAGNE: NPR's Corey Flintoff.
And a final report into the UN's oil-for-food program will be released today.
This is NPR News.
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