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Iraq Sues Companies For $10 Billion Over Oil-For-Food Kickbacks

NEW YORK -- The Iraqi government is suing dozens of companies, including oil giant Chevron Corp., for more than $10 billion, saying they paid kickbacks to former Iraqi leader Saddam Hussein's government under the UN's oil-for-food program.

The civil lawsuit, filed on June 30 in U.S. federal court in Manhattan, seeks to recover damages from companies investigated by a UN-commissioned inquiry, claiming they cheated the Iraqi people out of benefits of the $67 billion UN program.

The UN oil-for-food program, which ran from 1996 to 2003, was created to help Iraqis cope with UN sanctions after Iraq invaded Kuwait in 1990. The program allowed Baghdad to sell oil in order to buy humanitarian goods.

The lawsuit says billions of dollars were lost, "all of which were directly translatable into food, medicine, and other humanitarian goods that were supposed to reach the Iraqi people."

Among the individuals named in the lawsuit are Texas oilmen Oscar Wyatt and David Chalmers, who both admitted to paying millions of dollars in kickbacks to Hussein's regime.

But a UN-commissioned inquiry headed by former U.S. Federal Reserve Chairman Paul Volcker found the program was corrupted by 2,200 companies from 66 countries that paid $1.8 billion in kickbacks to Iraqi officials to win supply deals.

The lawsuit follows U.S. criminal investigations into the program, which produced the convictions of individuals, including Wyatt and Chalmers, and oil companies named in the complaint, including Chevron, which agreed to pay $30 million to resolve criminal and civil liabilities.

Most of the companies named in the lawsuit could not immediately be reached for comment.