US Oil Firm Admits "Oil for Food"
Kickbacks
Yahoo News/Reuters
By Jeanne King
October 20, 2005
NEW YORK (Reuters) - A Virginia oil trading company pleaded guilty on
Thursday to charges of scheming to pay more than $400,000 in kickbacks to Iraq
for oil purchases made as part of the defunct U.N. oil-for-food program for
Iraq.
Midway Trading, a Reston, Virginia-based firm, agreed to pay a $250,000 fine
in a plea deal, according to the Manhattan district attorney's office.
The kickback scheme also involved one of its trading partners, Bulf Oil, the
office said. But it provided no details on Bulf Oil.
The case grew out of an investigation into the scandal-ridden $64 billion
oil-for-food program launched by District Attorney Robert Morgenthau's office
this year.
Also investigating corruption in the program, which was shut down in 2003
after the U.S.-led invasion of Iraq, are the federal U.S. Attorney's office in
the Southern District of New York, several congressional committees and a
U.N.-appointed commission led by former
Federal Reserve Chairman Paul Volcker.
Morgenthau's office said the case against Midway began as a result of
cooperation with Volcker's Independent Inquiry Committee, which is expected to
issue its final report this month, on companies around the world who benefited
from the U.N. program.
Morgenthau has also opened a criminal investigation of Benon Sevan, the U.N.
official who headed the U.N. program.
The Volcker inquiry has accused Sevan, a Cypriot and veteran U.N. senior
staff member, of getting about $150,000 in kickbacks from an oil trading firm
while he was in charge of the program. Sevan has denied the charges, but has
fled to his native Cyprus which has no extradition agreement with the United
States.
The oil-for-food program began in December 1996 and allowed former Iraqi
President Saddam Hussein to sell oil to buy civilian goods to ease the impact
of U.N. economic sanctions on ordinary Iraqis. The sanctions were imposed after
Iraq's 1991 invasion of Kuwait.
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