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Wednesday, November 17, 2004 - Page updated at 12:00 A.M.

Iraq Notebook
Oil-for-food money paid bombers' kin


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NEW YORK — Saddam Hussein diverted money from the U.N. oil-for-food program to pay millions of dollars to families of Palestinian suicide bombers who carried out attacks on Israel, say congressional investigators who uncovered evidence of the money trail.

The former Iraqi president tapped secret bank accounts in Jordan — where he collected bribes from foreign companies and individuals doing illicit business under the humanitarian program — to reward the families up to $25,000 each, investigators told The Associated Press.

Documents prepared for a hearing today by the House International Relations Committee outline the new findings about how Saddam funneled money to the Palestinian families.

Investigators believed it was "important for us to determine whether the profits from his corruption were put toward terrorist purposes," committee Chairman Henry Hyde, R-Ill., said of Saddam's well-known financial support of suicide bombers.

Today's hearing will focus on BNP-Paribus, a French bank that handled most of the money for the program.

An audit by a U.S. regulatory agency of a small sample of transactions out of the $60 billion U.N. escrow account managed by the bank raised serious questions concerning compliance with U.S. money-laundering laws, investigators said.

"There are indications that the bank may have been noncompliant in administering the oil-for-food program," Hyde said in his statement. "If true, these possible banking lapses may have facilitated Saddam Hussein's manipulation and corruption of the program."

"No departure from any standard caused or contributed in any way to the abuse at the oil-for-food program," said the bank's lead counsel, Robert Bennett. "There are simply no connections."

The humanitarian program that let Iraq trade oil for goods was created in 1996 to help Iraqis get food, medicine and other items that had been scarce under U.N. economic sanctions imposed after the Gulf War.

But investigators say Saddam made more than $21.3 billion in illegal revenue under the program as well as by evading the sanctions for more than a decade.
 
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Money from kickbacks on oil-for-food deals, illegal oil payments from the Jordanian government and other illicit funds were paid into accounts held by a Jordanian branch of the Iraqi government-owned Rafidain Bank, investigators said.

According to employees of the Iraqi Central Bank and the Rafidain Bank, the former Iraqi ambassador to Jordan, Sabah Yassen, withdrew money from the accounts to make payments ranging from $15,000 to $25,000 to the families of Palestinian suicide bombers, Hyde said.

Palestinians have said Saddam paid more than $35 million to families of Palestinians killed or wounded in the conflict with Israel that began in September 2000.

Punishment sought for Reserve supply unit

WASHINGTON — The Army is recommending punishment for about two dozen soldiers from an Army Reserve unit in Iraq that refused orders to drive a fuel convoy because they believed it was too dangerous, officials said yesterday.

No final decisions have been made, and none of the soldiers has been charged with a crime, the officials said.

But they said preliminary findings of an Army investigation faulted about 24 members of the 343rd Quartermaster Company, which is based at Rock Hill, S.C.

About 18 of the 24 were held for nearly two days after refusing orders to drive a fuel convoy from Tallil Air Base in southern Iraq to a base north of Baghdad.

Another six also have been faulted.

They raised concerns about the safety and the condition of their vehicles and whether the convoy was getting adequate protection.

Islamic Party official detained after raid

BAGHDAD, Iraq — U.S. forces detained a senior official of the Iraqi Islamic Party in a dawn raid on his house yesterday, colleagues said, a week after the leading Sunni Muslim party pulled out of the government.

"The Americans took Naseer Ayef from his house at dawn," an Islamic Party official told Reuters.

The U.S. military had no immediate comment.

Ayef is deputy head of Iraq's provisional National Assembly and a member of the Iraqi Islamic Party politburo, the Islamic Party official said.

The Iraqi Islami party pulled out of Iraq's U.S.-backed interim government a week ago to protest the onslaught by U.S. forces on the rebel-held city of Fallujah.

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