US And Congress Knew Saddam Was Smuggling Oil

Mark Turner in New York 

01/19/05 "Financial Times"
-- The Clinton and Bush administrations not only knew but told the US Congress that Iraq was smuggling oil to Turkey and Jordan, and in both cases recommended continuing military and financial aid to countries seen as important allies. 

Recent revelations that Saddam Hussein was able to raise billions of dollars in illicit revenue in defiance of international sanctions have prompted savage criticism of the United Nations by members of Congress and rightwing commentators.

Yet two letters sent by the State Department to Congress in 1998 and 2002 clearly show that successive US administrations knew of sanctions-busting and turned a blind eye to it. Some US lawmakers are now demanding that the US also hold itself to account for those decisions and not shift all the blame to the UN.

Tom Lantos, the ranking Democrat on the House of Representatives' international relations committee, said recently he was “stunned at the failure of our own State Department to put a halt to Saddam's larceny”.

In both cases, as most policymakers knew at the time, the administration judged that maintaining constructive relations with the two countries was in the “national interest”. 

It issued a waiver on legal restrictions on aid for countries known to violate sanctions and Congress duly authorised and appropriated the funds.

Charles Duelfer, head of the Iraq Survey Group, said last year that Iraq's smuggling to and from neighbouring countries was by far the largest source of revenue for Mr Hussein's regime, accounting for $8bn (£4.2bn) out of $11bn. Its single biggest source of illicit income was trade with Jordan, at least until 2000, after which trade with Syria and Turkey grew in importance.

In December 1998, the State Department under Bill Clinton's presidency told Congress: “Despite United Nations Security Council resolutions banning Iraqi oil imports (except under the terms of the oil for food resolutions) Jordan has continued to import oil from Iraq.”

But it said continued US assistance would provide the Jordanian government with “some flexibility to pursue policies which are of crucial importance to US objectives in the Middle East”, including the Middle East peace process.

That sent a message that the smuggling would be tolerated. The wording of a letter in 2002, despite being issued under President George W. Bush, was almost identical. It noted the waiver had been given to Jordan every year since 1991, when UN sanctions were imposed on Iraq.

“Providing the planned assistance will bolster the Jordanian government in its commitment to participate in . . . co-operation with the US in supporting regional security and stability, co-operation with Israel . . . and promoting democratic reforms,” it said.

Similarly, in 1998 the State Department said: “Turkey permits the importation of a limited amount of diesel oil from Iraq and Turkish trucks carry goods into northern Iraq.”

But it added that with the exception of “this local trade”, the fellow Nato-member had been an important ally in enforcing the embargo, which had cost it $22bn in lost trade.

US assistance should continue since Turkey promoted “security, prosperity and other vital US interests”.

In 2002, as the illegal trade with Turkey grew, the State Department wrote: “The government of Turkey permits the importation of oil from Iraq and private Turkish entities provide non-lethal goods and cash to Iraq.”

But again, providing aid was in the national interest because Turkey was an ally in the war on terror as well as a secular democracy in a region of “weak economies, political instability, shaky democratic traditions and ethnic strife”. 

© Copyright The Financial Times

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