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El Paso to settle Iraq oil charges

February 08, 2007|From Reuters

WASHINGTON — El Paso Corp. will pay $7.7 million to settle charges that it indirectly paid nearly $5.5 million in illegal surcharges to former Iraqi dictator Saddam Hussein's government under the U.N. oil-for-food program, U.S. officials said Wednesday.

El Paso bought about 21.4 million barrels of Iraqi crude oil from third parties participating in the defunct $64-billion United Nations program, the Securities and Exchange Commission said.

About 25 to 30 cents of each barrel purchased by El Paso was illegally kicked back to Iraq through surcharges, which the Houston-based company either knew about or was reckless in not knowing, the SEC said.

El Paso, operator of the country's largest natural gas pipeline system, settled without admitting or denying the charges.

Under the deal, El Paso will pay restitution of $5.48 million to the U.S., which will seek to transfer the funds to the Development Fund of Iraq set up to aid reconstruction, U.S. Atty. Michael Garcia said in New York

Separately, the firm agreed to pay an additional $2.24-million penalty to the SEC, Garcia said.

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