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Denials follow U.N. oil-for-food report

MOSCOW - A scathing report on corruption in the U.N. oil-for-food program for Saddam Hussein's Iraq drew widespread denials, terse dismissals and protestations of innocence Friday. But there were also pledges to investigate from some of the 2,200 companies cited and countries with citizens named.

Russian officials angrily alleged that documents accusing companies and officials in that country were fake, and the head of the nation's electricity monopoly called for the report's writers to be punished. But in a rare partial admission, Sweden's Volvo AB acknowledged making payments through an agent to Iraqi authorities but said it did not consider that bribery.

Volvo AB no longer owns carmaker Volvo, which was sold in 1999 to the Ford Motor Company.

The U.N. report issued Thursday by the Independent Inquiry Committee rattled reputations around the world with charges of kickbacks in lucrative contracts in the 1996-2003 program, under which Iraq was allowed to sell oil provided the proceeds went to buying humanitarian goods to help offset U.N. sanctions.

Among those implicated was former Kremlin chief of staff Alexander Voloshin, now board chairman of the state electricity grid UES. Russian Foreign Minister Sergey Lavrov, in remarks reported by domestic news agencies, claimed some of the documents cited by the commission used forged signatures.

The Independent Inquiry Committee, led by former U.S. Federal Reserve Chairman Paul Volcker, was extremely cautious on the claim against Voloshin. It noted that Iraqi Oil Ministry records reported about 4.3-million barrels were allocated in his name through a Russian company called Impexoil.

Yet it also acknowledged Russian claims that his signature was forged and said samples of his signatures were "not substantially similar" to the signature that appeared on a letter purportedly written by him. It said it could not find evidence linking Voloshin with Impexoil.

Texas oilman Oscar S. Wyatt Jr., the former chairman of Coastal Corp. who was described in the report as a favorite customer of Iraq, pleaded not guilty Thursday in New York to charges that he conspired to pay several million dollars in illegal kickbacks to Hussein's regime to win oil-for-food contracts. Volcker said Wyatt, 81, was the lone exception to an Iraqi ban on selling oil to American companies.

Switzerland said it has launched a criminal investigation focusing on four people connected to the oil-for-food program. Swiss authorities already have fined a Geneva-based oil-trading company $40,000 for paying kickbacks under the program but have not identified the company.

France will study the report and "wants full light to be shed on the embezzlement that took place in the framework of the oil-for-food program," Foreign Ministry spokesman Jean-Baptiste Mattei said. French judges are investigating 10 French officials and business leaders on suspicion they received oil allocations as kickbacks.

In Australia, Prime Minister John Howard said he doubted the Australian Wheat Board, which was the single largest supplier of humanitarian goods under the program, would have knowingly made improper payments. The report said the board, which sold $2.3-billion of wheat to Iraq, made "side payments" for transportation of the grain to a Jordanian company that was owned in part by Hussein's government.

An Italian politician named in the scandal, Roberto Formigoni, said he received "neither a drop of oil, nor a single cent." Fiery British lawmaker George Galloway, who founded a charity aimed at fighting the U.N. sanctions against Iraq, said "there is a witch hunt going on" and accused Sen. Norm Coleman, R-Minn., of falsifying evidence against him.

Germany's Siemens AG said it found no evidence of kickbacks allegedly paid by its French, Turkish and Middle East subsidiaries. A DaimlerChrysler statement said the company was aware of the report but declined to comment. Anglo-Swedish pharmaceutical company Astra Zeneca also denied alleged wrongdoing.

The report also implicated Lukoil Asia Pacific, a company the report called a subsidiary of Russia's No. 1 producer, Lukoil.

Lukoil's spokesman, Dmitry Dolgov, said he had never heard of the company, adding that investigators had worked with Iraqi documents, which could have been forged.

Dolgov noted that investigator Robert Parton resigned from Volcker's committee in April, reportedly because he believed it ignored evidence critical of U.N. Secretary-General Kofi Annan. "This creates the impression that this report is aimed at distracting attention from the oversights of U.N. officials and laying the blame with certain companies," Dolgov said.

[Last modified October 29, 2005, 01:46:07]