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Oil report links Iraqis, Kremlin

Justin Blum and Colum Lynch Washington Post

WASHINGTON – Top Kremlin operatives and a flamboyant Russian politician reaped millions of dollars in profits under the U.N. oil-for-food program by selling oil that Iraqi leader Saddam Hussein allowed them to buy at a deep discount, a Senate investigation has concluded.

The allegations – which include descriptions of kickbacks to Saddam – are detailed in hundreds of pages of reports and documents made public Sunday night by the Senate Permanent Subcommittee on Investigations in advance of a hearing Tuesday.

The documents outline a trail of oil and money that leads directly from Iraq to the Kremlin and the former chief of staff to Russian President Vladimir Putin and former President Boris Yeltsin. The report said Iraq sought to influence and reward the Russian government because it sits on the U.N. Security Council that oversaw sanctions against the Saddam government. Russia repeatedly sided with Iraq on issues before the Security Council.

A Russian Embassy spokesman in Washington said it received the reports but couldn’t yet discuss them.

A CIA report last year said Saddam granted top political leaders from around the world the opportunity to buy Iraqi oil at a discount. But the Senate report presents more detailed evidence, alleging Russian officials took up the offer and profited handsomely.

The reports allege Russian politician Vladimir Zhirinovsky, several Russian entities and a Houston-based oil trading company, Bayoil, “paid millions of dollars in illegal, under-the-table surcharges to the Hussein regime in connection with these oil transactions.” U.S. officials say Saddam used illicit proceeds from oil sales to buy weapons, among other things.

Iraq’s U.N. ambassador, Feisal Amin Istrabadi, said Russia was one of dozens of countries that took advantage of Iraq’s oil wealth.

The reports were given to reporters Friday on condition that articles about them not be published until today.

These are the latest allegations over the U.N. program established to provide Iraq a partial exemption from economic sanctions, allowing it to sell oil to buy food, medicine and humanitarian goods.

The program limited Saddam’s acquisition of weapons of mass destruction and improved humanitarian conditions for Iraqis. But Saddam siphoned more than $2 billion by charging kickbacks to companies that traded with Baghdad, U.S. investigators say.

The problems have caused some U.S. lawmakers to call for the ouster of U.N. Secretary General Kofi Annan.

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