August 19, 2005

Danish firm admits paying Iraq oil-for-food kickbacks

By Per Bech Thomsen

COPENHAGEN (Reuters) - A Danish maker of industrial pumps,
Grundfos, on Friday admitted paying kickbacks to authorities in
Saddam Hussein's Iraq under the U.N. oil-for-food program.

"We deeply regret that two employees have taken part in
bribery in connection with Grundfos's sales of pumps under the
oil-for-food program," Grundfos Chief Executive Jens Joergen
Madsen said in a statement.

The company said an internal investigation in May 2004 had
revealed that the employees had paid bribes to Iraqi
authorities in 2001-2002 to win two orders. It fired them and
notified the Danish Foreign Ministry and the United Nations
about the matter.

The company, which sold products worth up to 100 million
Danish crowns under the oil-for-food plan during 1996-2003,
declined to comment on the size of the bribes.

Earlier this month Benon Sevan, former head of the $67
billion oil-for-food humanitarian plan for Iraq, was accused of
receiving nearly $150,000 in kickbacks, and U.N.
Secretary-General Kofi Annan last week ordered a broad
independent review of the world body's procurement practices.

Grundfos has been contacted by the U.N. in the
investigation of the oil-for-food program being conducted by
former chairman of the U.S. Federal Reserve Paul Volcker.

"We have done everything to openly cooperate with the
United Nations in New York to end the case in a satisfactory
way," Grundfos said.

Denmark, ranked in international surveys as one of the
least corrupt countries in the world, has 530 soldiers serving
with the U.S.-led forces in Iraq.