US oil tycoon, 2 Swiss charged in Iraq oil scandal

By Daniel Trotta

NEW YORK (Reuters) – U.S. prosecutors have charged a Texas
oil tycoon and two Swiss executives and their companies with
paying secret kickbacks to Iraq in the U.N. oil-for-food
program.

Tycoon Oscar Wyatt, the former Coastal Corp. chairman, was
arrested in Houston, Texas, on Friday, prosecutors said,
becoming one of the highest profile figures ensnared so far in
the scandal. The two Swiss nationals are being sought for
extradition.

The U.S. Attorney for the Southern District of New York
charged Wyatt along with Catalina del Socorro Miguel Fuentes,
alias Cathy Miguel, and Mohammed Saidji. All three face up to
62 years in prison and heavy fines if convicted.

“Mr. Wyatt has violated no laws and will vigorously defend
against these charges,” said Wyatt’s lawyer Carl Parker in
Houston.

Three companies were also charged, including the
Cyprus-based oil trading companies Nafta Petroleum Company Ltd.
and Mednafta Trading Company Ltd, collectively known as the
Wyatt Foreign Companies.

Those firms were operated by Miguel and Saidji in close
consultation with Wyatt, the statement said.

Also charged was Sarenco, a Swiss consulting firm operated
by Miguel and Saidji, prosecutors said in the statement.

“Wyatt, Miguel and Saidji obtained oil under the United
Nations’ oil-for-food program by paying millions of dollars in
secret kickbacks to Saddam Hussein’s regime in Iraq. These
kickbacks were allegedly paid to the government of Iraq for oil
allocated by the Saddam Hussein regime to the Wyatt Foreign
Companies and the Coastal Corporation,” prosecutors said.

Specifically they allege that Wyatt, Miguel and Saidji
directed millions of dollars in illegal kickbacks to Saddam’s
government by depositing cash into a Jordanian bank account.

Wyatt also lobbied the United Nations to set an official
selling price that would allow recipients of the oil to pay the
kickbacks and still profit, the statement said.

Wyatt’s Coastal Corp. was sold to natural gas pipeline
company El Paso Corp. in 2001.

A flamboyant personality in a typically conservative oil
industry, Wyatt has had close ties with Iraq for years.

In December 1990, just before the Gulf War, he met Saddam
and other senior Iraqi officials to secure the release of 32
American hostages who were subsequently flown back to the
United States in a Coastal-chartered jet.

Before Iraq invaded Kuwait in August 1990, Coastal
accounted for some 10 percent of Iraq’s total crude sales.

FIRST SANCTIONS, THEN SCANDAL

The now-defunct oil-for-food program allowed Saddam to sell
oil to buy food and medicine in order to ease the impact of
U.N. sanctions. It ran from 1996 to 2003.

The program allowed Iraq to negotiate its own contracts,
and mismanagement allowed Saddam to rake in more than $10
billion in oil smuggling profits, according to CIA reports last
year.

An investigation led by former U.S. Federal Reserve
Chairman Paul Volcker found that Secretary-General Kofi Annan,
his deputy and the U.N. Security Council all share
responsibility.

Volcker announced on Friday he would issue a final report
on October 27 on the role of private companies in the scandal.
South African Judge Richard Goldstone has said there is some
evidence of wrongdoing among some 2,500 of the more than 4,000
companies involved in the program.

Federal prosecutors in New York have now charged six people
and six companies involved in the program, and state
prosecutors have pursued their own cases.

(Additional reporting by Deepa Babington, Irwin Arieff and
Evelyn Leopold in New York and Mark Babineck in Houston)