British link to oil-for-food scandal probed

1.00pm - By ANDREW GRICE

Customs and Excise is investigating a British link to the multi-million pound corruption scandal surrounding the oil-for-food programme which operated under Saddam Hussein's regime in Iraq.

Money was allegedly siphoned off from the scheme to fund pressure groups which campaigned against international sanctions against Saddam's regime.

The campaigns were backed by MPs including George Galloway, the independent MP for Glasgow Kelvin, who was expelled by the Labour Party.
There is no suggestion that any British MPs profited personally or knew about the alleged corruption.

The United Nations oil-for-food programme, which allowed Iraq to use some of its oil revenues to buy food and aid between 1996 and last year, is believed to have been used by Saddam to buy influence around the world, break sanctions and sustain his regime and military machine.

Some estimates suggest he earned £2.6 billion in illegal surcharges and "service fees" on UN-supervised contracts.

The Customs investigation was disclosed by Jack Straw, the Foreign Secretary, in written evidence to the Foreign Affairs Committee.

He said: "I can confirm that the Government has been given copies of documents relating to the corruption allegations, and that these name a small number of UK individuals and entities."

A further letter from Mr Straw to the committee was classified as confidential and not released. He assured the MPs that the "entities" named in the documents, which emerged in Baghdad after last year's war, were not linked to the British Government.

The "individuals" to whom he referred are understood to be three Middle East businessmen living in Britain. Two of them gave money to the Mariam Appeal run by Mr Galloway. A third ran an anti-sanctions campaign, Friendship Across Borders, whose patron was Tam Dalyell, the longest-serving MP and which organised visits to Iraq by politicians.

The three businessmen are alleged to have sold oil rights at a profit, exploiting a loophole in the oil-for-food scheme.

The committee said in yesterday's report: "We are concerned that the documents given to the United Kingdom Government relating to the oil-for-food programme corruption allegations name a small number of UK individuals and entities.

"We recommend that in its response to this report, the Government provide further information on the progress of the inquiry into allegations of corruption in the oil-for-food programme, including any further information on UK involvement."

The MPs also expressed concern about the use of private military and security companies in Iraq and Afghanistan and criticised the Government for dragging its feet on legislation to regulate the firms.

Mr Straw said the Government came down against a new law because of the difficulties involved and suggested that controlling the companies was now a matter for the Iraqi authorities.

The MPs urged him to think again.

They said: "We conclude that the increase in the use of private military or security companies in Iraq and Afghanistan in the last two years has added to the case for regulation of these companies, where appropriate, by the British Government."

They said ministers should either bring in legislation to regulate the private firms or explain full their reasons for not doing so.

- INDEPENDENT