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Virginia Company Caught in Oil Scheme
21 October 2005
by Anai Rhoads
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AnaiRhoads.org - A Virginia
firm pled guilty Thursday to charges that they paid more than $440,000
in 2000 and 2001 in kickbacks to Iraq for oil purchases during the U.N.
oil-for-food programme.
The programme, which allowed Iraq's former President Saddam Hussein to
disburse oil in exchange for civilian goods to 27 million Iraqis, was
established in December 1996 and ended in 2003 after the U.S.-led
invasion of the country. The programme's intention was to help relieve
the burden of the U.S. imposed sanctions that were put in placed in
1991. The sanctions, which ultimately killed nearly a million children
under the age of five, were implemented shortly after Iraq's 1991
invasion of Kuwait.
The Reston, VA based firm, Midway Trading, pled guilty to first-degree
grand larceny and was forced to pay a $250,000 fine in a plea deal.
Also involved were Bulf Oil, a known Romanian trading partner of Midway
Trading.
Former Federal Reserve Chairman Paul Volcker (Independent Inquiry
Committee (IIC) and District
Attorney Robert Morgenthau began an investigation early 2005 to
determine exactly what happened during the U.N.'s programme.
The investigation includes allegations of fraud and corruption on the
part of United Nations officials, contractors, personnel and
agents, including entities that have entered into contracts with the
U.N. or with Iraq under the programme.
"The oil-for-food programme was set up as a way for the Iraqi people to
receive humanitarian goods and not to line the pockets of the ruling
party," Morgenthau said in a statement to a Senate committee.
U.N. official Benon Sevan, who headed the U.N. programme before it
ended in 2003, is being investigated for criminal charges by
Volcker and Morgenthau.
Volcker is accusing the native Cypriot of receiving approximately
$150,000 in payments from an oil trading firm during his leadership of
the oil-for-food programme.
Despite denying all charges against him, Sevan fled to Cyprus soon
after the investigation against him was revealed.
Since Cyprus has no extradition agreement with the U.S., Sevan may
never be fully charged as long as he remains in Cyprus.
Stephen W. Baumgart, who is listed in the Virginia State Corporation
Commission records as Midway's current President, declined to discuss
the charges with us.
In early January, Volcker made public 58 audit reports under his
purview, including 37 related to the Oil-for-Food programme, 16 related
to the UN Compensation Commission and two draft reports related to the
Oil-for-Food programme which were not finalised due to the outbreak of
war.
The completed report is expected
sometime later this month, where it will expose the dozens of national
and international companies that benefited from the $64 billion
programme.
©2005 Anai Rhoads. Reproduction must be authorised in writing
by author only. Altering, redistributing, or selling this material is
strictly prohibited.
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