United Nations examining 2,200 companies named in oil-for-food report

The United Nations said yesterday it is examining whether it does business with more than 2,200 companies accused of colluding with Saddam Hussein's regime to bilk the U.N. oil-for-food program in Iraq of $1.8 billion.

"Where appropriate, and with the full respect for due process, such companies may be suspended from doing business with the U.N. pending fruther investigation and clarification of their role in the oil-for-food program," U.N. deputy spokeswoman Marie Okabe said.

In a scathing final report released on Oct. 27, a yearlong investigation led by former U.S. Federal Reserve chairman Paul Volcker exposed the global scope of a scam that allegedly involved such name-brand companies as DaimlerChrysler and Siemens AG, as well as a former French U.N. ambassador and a firebrand British politician.

The 623-page report meticulously detailed how the $64 billion program became a cash cow for Saddam and more than half the companies participating in oil-for-food at the expense of Iraqis suffering under U.N. sanctions. It blamed shoddy U.N. management and the world's most powerful nations for allowing the corruption to go on for years.

Under the program which ran from 1996-2003, Iraq was allowed to sell oil provided the proceeds went primarily to buy humanitarian goods to help offset U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait. Saddam corrupted the program by awarding contracts to and getting kickbacks from favored buyers, the report said.

Most oil-for-food contracts went to Russian and French companies and individuals, who were rewarded for their governments' outspoken opposition to sanctions. Still, even firms in countries supportive of the sanctions, such as the United States, found ways to manipulate the system illegally sometimes by using Russian firms as middlemen.

Volcker said his Independent Inquiry Committee was only a fact-finding effort, with no law-enforcement power. He expressed hope that investigators in countries where the companies and individuals live would pursue legal cases against those mentioned in the report.

The committee is wrapping up its work at the end of November, reported AP.