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U.S. Buyers of Hussein's Oil Acted to Assist Iraq

October 18, 2004|T. Christian Miller | Times Staff Writer

WASHINGTON — A month before the Persian Gulf War began in 1991, with an attack by the U.S.-led coalition imminent, famed Texas oil tycoon Oscar Wyatt rushed his corporate jet to Baghdad to rescue 21 Americans being held hostage by Iraqi President Saddam Hussein.

It was a personal triumph for Wyatt, who had clashed with the U.S. government over the private rescue mission, and a political one for Hussein, who was trying to convince the world that he remained open to negotiation after his invasion of Kuwait.

This month, Wyatt was one of three Americans whose names surfaced in a CIA report listing the people and companies whom Hussein allegedly awarded lucrative vouchers to buy oil in the decade that followed his defeat in 1991.

In the interim, Wyatt came to be a central figure in a small, loosely knit group of Americans who supported policies and activities potentially beneficial to Hussein even as they benefited from the dictator's oil resources, U.S. officials, oil analysts and personal acquaintances said.

Their story provides a revealing glimpse at the politics of oil and the people behind it, operating in a world that mixed diplomacy, intrigue and multimillion-dollar oil deals.

The men, involved in Iraq through professional and personal relationships that in some cases stretched back decades, at times engaged in a secretive campaign of private diplomacy, offering themselves as a communications back channel between Hussein and at least two U.S. administrations, the sources said.

At least one of the men attempted to broker a peace deal between the U.S. and Iraq in a last-ditch effort to avoid war. Others waged campaigns to put an end to United Nations sanctions against Iraq, portraying their efforts as humanitarian gestures to help the Iraqi people.

At the same time, all were donating to U.S. political campaigns. Since 1991, Wyatt and his wife, Lynn, for instance, have given more than $700,000 to federal campaign and political organizations, most to Democrats and most after Wyatt and his firm began to buy oil from Iraq in 1997, according to records maintained by the Campaign Finance Analysis Project.

The other Americans named in the CIA report, Virginia oil trader Samir "Sam" Vincent and Michigan real estate developer Shakir Al Khafaji, helped sponsor high-level trips to Iraq during the 1990s with influential U.S. congressmen and brought high-ranking Iraqi religious leaders to the United States.

Friends said the men were trying to bring attention to the suffering of ordinary Iraqis under the sanctions, which had squeezed food and medical shipments to the nation's 26 million people.

Wyatt and a former business associate, David Chalmers, whose company was mentioned in the CIA report, were primarily interested in Iraq for business reasons, friends and analysts said. They bought Iraqi oil in a market that came to be characterized by shadowy middlemen and kickbacks, backroom deals and high-stakes showdowns.

Wyatt said through a spokesman last week that all his transactions in Iraq complied with applicable laws. Chalmers, Vincent and Khafaji did not respond to attempts to contact them or their companies.

None of the men has been accused of breaking the law by trading oil with Hussein, a process overseen by the U.N. between 1996 and 2003 as part of its oil-for-food program.

Many companies, including firms run by Wyatt, Vincent and Chalmers, were on a list approved by the U.N. to buy oil from Iraq under the program, which was designed to use the proceeds from oil sales to provide humanitarian aid for the Iraqi people.

The legality of oil sales to individuals, however, is suspect, congressional investigators said. Hussein abused the U.N. program by personally issuing oil vouchers to high-ranking political figures worldwide to win friends and wage a propaganda war to lift the sanctions, according to the CIA report by special weapons inspector Charles A. Duelfer.

Hussein's vouchers entitled the bearers to a certain quantity of oil. The holders could then sell their coupons to middlemen, who would in turn sell the oil to companies. Sometimes the vouchers were gifts; sometimes they were contracts to buy oil at a specific price.

Such vouchers are at the heart of what has become one of the gravest corruption scandals at the United Nations since its founding in 1945. The oil-for-food program generated an estimated $67 billion legally and $11 billion illegally, with top U.N. officials and officials from China to France to Russia implicated as having received such vouchers.

Wyatt, Khafaji and Vincent are the only Americans on the list of recipients, which was obtained from records kept by Iraq's State Oil Ministry and recovered by U.S. troops. Five U.S. companies were also named: Chevron-Texaco, Exxon Mobil, Wyatt's Coastal Corp., Vincent's Phoenix International, and Chalmers' Bay Oil.

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