Washington, 27 October 2005 (RFE/RL) -- The Volcker-commission report cites extensive documentation from Iraqi officials as evidence of participation by Russian entities in improper activities.
Russia, France, and China were three UN Security Council members that consistently argued in favor of easing sanctions on Iraq from the late 1990s through 2002.
In return, according to the report, they received a large share of the contracts awarded by Hussein's government under the terms of the oil-for-food program set up by the UN Security Council. Participating companies from these and many other states also took part in abuses, it states.
Volcker cited a pattern of favoritism by Hussein.
"Saddam plainly chose to favor those nations, companies, and individuals that he felt -- rightly or wrongly -- would assist his efforts to end the sanctions imposed at the end of the Gulf War," Volcker said. "It's also true, as our early reports have emphasized, that political differences and pressures within the United Nations organization itself -- the Security Council, the secretariat, and some UN agencies -- frustrated appropriate and effective response to the manipulation and corruption of the program."
The report says Russian companies contracted for about $19.3 billion worth of oil from Iraq, about 30 percent of all oil sales during the time of the program.
It says that the largest amount of illegal surcharge payments to Hussein's regime went through the Iraqi Embassy in Moscow.
For example, it said, between March 2001 and December 2002 more than $52 million in surcharges was paid through that embassy.
Among the companies allegedly making such payments were Alfa Eco, LUKoil, Zarubezhneft, and the Tyumen Oil Company. Officials from most of them have denied wrongdoing but, according to the report, these companies have not provided any information refuting the records submitted to them by the commission.
The report says that overall, Hussein's regime gained nearly $2 billion in illicit payments from more than 2,000 foreign companies.
It cites Iraqi documents showing Russia's Communist Party and Liberal Democratic Party of Russia each receiving large oil shipments for their support of Iraq. It points to evidence of personnel involvement of such shipments by the chiefs of the two parties -- Gennadii Zyuganov and Vladimir Zhirinovskii, respectively.
The commission says Zyuganov has not responded to repeated communications from the committee. Zhirinovskii has denied any wrongdoing.
At a news conference, Volcker declined to speculate what legal proceedings could emanate from the report.
"The report is public. Any law-enforcement agency in the United States or any other country can decide whether on the basis of this report or other information it may have, whether it wants to pursue the kind of question you are raising," Volcker said. "But I can't tell you which cases and particularly under what condition they may want to take that path."
The report says that overall, Hussein's regime gained nearly $2 billion in illicit payments from more than 2,000 foreign companies. Among those firms alleged to be taking part were Siemens of Germany, Volvo of Sweden, and Bayoil of the United States.
The report alleged that Jean-Bernard Merrimee, France's former UN ambassador; British lawmaker George Galloway; and Roberto Formigoni, the president of Italy's northern Lombardy region also benefited improperly from contacts with Iraq.
Volcker faulted UN oversight. "The corruption of the program by Saddam and by many participants -- and it was substantial -- could not have been nearly so pervasive if there had been more discipline management by the UN and its agencies," he said. "It is in that sense that this last report reinforces and underscores the need for fundamental and wide-ranging administrative reform that we emphasized in our report last month."
The commission's report also listed case studies involving a Belarusian and Russian firm making illicit payments in exchange for humanitarian contracts.
It claims the Belarus company paid nearly $20 million in kickbacks on humanitarian contracts and surcharges on oil contracts.
The report also charges that the Russian energy company paid more than $8 million in kickbacks on humanitarian contracts and surcharges on oil contracts.