Senator Collins’ Statement On Investigation Into Former Iraqi Abuse Of U.N. Oil For Food Program

Washington, DC – A subcommittee of the Senate Governmental Affairs Committee today held a hearing to investigate “How Saddam Hussein Abused the United Nations Oil-for-Food (OFF) Program.” Senator Susan Collins, who is the Chairman of the Governmental Affairs Committee, participated in today’s hearing.

The committee heard testimony from Charles A. Duelfer, author of The Comprehensive Report of the Special Advisor to the DCI on Iraq’s WMD. Mr. Duelfer testified about how Saddam Hussein manipulated the OFF Program to erode United Nations sanctions, generate billions of dollars of illicit funds, and procure conventional weapons. Juan Carlos Zarate, the Assistant Secretary of Terrorist Financing and Financial Crimes at the Department of the Treasury, discussed the extent to which funds illicitly procured under the OFF Program may have been used by Saddam Hussein for illicit purposes, including whether monies pilfered from the OFF Program are being used to fund the Iraqi insurgency or terrorist groups. The hearing also examined specific transactions in which the former Iraqi regime procured illicit funds and peddled influence by granting vouchers for oil deals, demanding kickbacks on contracts for humanitarian goods and exacting surcharges on oil sales.

The following is her opening statement from today’s hearing:

“Let me begin by commending you for conducting this much-needed investigation into Saddam Hussein’s abuse of the United Nations Oil for Food program I know that you have worked extraordinarily hard for months at unraveling the strands of this corrupt scheme.

“The Oil for Food program was created out of a genuine desire by the members of the United Nations Security Council to meet the humanitarian needs of the Iraqi people while UN sanctions worked to force compliance with Security Council resolutions. But this effort quickly mutated into what the Wall Street Journal has called ‘the largest bribery scheme in the history of the world.’

“One of the most disturbing aspects of this scandal is its sheer size. While the world may never know exactly how much money was plundered by Saddam Hussein’s regime, the Government Accountability Office estimated in July that Saddam amassed more than 10 billion dollars in illegal revenues between 1997 and 2002. That’s 10 billion dollars in a 67 billion dollar program. The Subcommittee’s estimate over a longer period is a staggering 21 billion dollars. I am deeply troubled that UN sanctions could be circumvented by the former Iraqi regime on such a massive scale. Moreover, the evidence suggests that the Oil for Food Program was manipulated by Saddam to erode the international community’s resolve to enforce the sanctions against his regime.

“Just one example of how this money was stolen can be found in Saddam spending two billion dollars during the 1990s to construct nine lavish presidential palaces. As General Tommy Franks said during a visit to one such palace, perhaps the Oil for Food program should have been dubbed the “Oil for Palaces” program instead.

“But far worse, much of Saddam Hussein’s illicit revenue was used for the more sinister purpose of undermining sanctions and rebuilding the Iraqi war machine. One of today’s witnesses, Charles Duelfer, reported in September that, and I quote, “The billions of dollars of revenue generated by the various protocols, illicit surcharges, and oil smuggling schemes drove the explosive growth in [Iraq’s] military imports. This allowed [Iraq’s Military Industrialization Commission] to smuggle millions of dollars worth of military equipment into Iraq in contravention of UN Sanctions.”

“The Military Industrialization Commission, incidentally, was the agency in Iraq’s government responsible for overseeing the Iraqi military-industrial infrastructure. Mr. Duelfer’s report explains that this Commission’s budget grew from 7.8 million dollars in 1996 to 350 million dollars in 2002 to 500 million in 2003, all during a period when Iraq was supposed to be under UN sanctions.

“I look forward to the testimony of today’s witnesses, and the light they will shed on this very complex course of events. And I again commend Senator Coleman and Senator Levin for investigating the scope of this scandal and what steps need to be taken to ensure that the same kind of wrongdoing never occurs in future such humanitarian programs.”