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US oil tycoon, 2 Swiss charged in Iraq oil scandal

Posted on: Friday, 21 October 2005, 18:50 CDT

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)

Source: REUTERS

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