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3 U.S. oil companies subpoenaed in Iraq probe

Federal grand jury looking into U.N. oil-for-food program

From Jonathan Wald
CNN

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UNITED NATIONS (CNN) -- Three of America's biggest oil and gas companies have received subpoenas from federal prosecutors related to the U.N. oil-for-food program in Iraq.

Exxon Mobil Corp., ChevronTexaco Corp. and Valero Energy Corp. -- all major buyers of Iraqi oil under the U.N.-managed program -- were sent subpoenas last week by the U.S. attorney for the Southern District of New York.

"We are responding appropriately," said Prem Nair, spokeswoman for Exxon Mobil, the largest provider of gas and oil in the United States.

"We purchased oil through the oil-for-food program from the beginning of the program to its end, and everything we did was within U.S. law and U.N. guidelines," Nair said.

Jeff Moore, a spokesman for ChevronTexaco, the country's second biggest oil and gas provider, said the company is cooperating with the "request for information."

Mary Rose Brown, senior vice president for corporate communications at Valero Energy, said the company received a subpoena in connection with a federal grand jury investigation into the program.

"We intend to cooperate fully with the investigation and have until July 27 to produce a list of documents and other items associated with our purchases of Iraqi oil in the 1995-2003 time period," Brown said.

A spokesman for the U.S. attorney's office would not say what the request for documents was related to.

Congress, the Iraqi government and the United Nations are already conducting separate investigations into allegations of corruption and mismanagement in the program.

Paul Volcker, the former Federal Reserve chairman who heads the U.N. probe, said his committee will need "a year or more" to come up with final conclusions, though its first interim report is expected in two months.

Allegations of corruption haunted the program from its inception, but the controversy gained momentum with the discovery of Iraqi documents alleging U.N. officials and others profited from the oil sales.

Charges of misconduct first appeared in January in an Iraqi newspaper, Al Mada, which ran a list of 270 former Iraqi Cabinet members, diplomats, company officials and journalists suspected of profiting from the program by making private deals with Saddam Hussein's government.

In March, an official from the General Accounting Office, the investigative arm of Congress, told a subcommittee of the U.S. House of Representatives that Saddam Hussein personally made $10.1 billion between 1997 and 2002, $4.4 billion on oil sold through the program and the rest through smuggling. (Full story)

The United Nations set up the program to provide food and medical supplies to the Iraqi people, who were suffering from years of sanctions imposed by the Security Council in 1990 after Iraq invaded Kuwait.

The program began in December 1996 and allowed Iraq to sell some of its oil and use the funds to buy humanitarian supplies for its people.

The program was shut down in November 2003, by which time it had brought some $38 billion in humanitarian supplies into the country, according to U.N. figures.


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