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Texan Oil Executive indicted in Oil for Food scandal

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Texas Businessman Indicted in Iraq Oil-for-Food Program

By TERENCE NEILAN

Texas businessman, as well as a British and a Bulgarian citizen, have been indicted in New York for reportedly paying millions of dollars in secret kickbacks to Saddam Hussein's government in Iraq as part of the United Nations oil-for-food program.

The Texan, David B. Chalmers, a principal of Bay Oil U.S.A. Inc., and an associate of the company, Ludmil Dionissiev, a Bulgarian and permanent American resident, were arrested this morning at their homes in Houston.

The United States Attorney for the Southern District of New York, David N. Kelley, said at a news briefing this morning in Manhattan that he would seek the extradition from England of a third defendant, John Irving.

Mr. Kelley said Mr. Chalmers and the other defendants played "a pivotal role" in efforts to fix the price of oil that was traded and sold under the oil-for-food program and "facilitated the payment of illegal surchages" on the oil to the Hussein government.

The money was intended to be used for relief purposes.

In a complaint stemming from the same investigation, a South Korean citizen, Tongsun Park, is charged with conspiracy to act in the United States as an unregistered agent of the Iraqi government in creating the oil-for-food program.

Mr. Park, who is believed to be living in South Korea, is said to have received $2 million from the Iraqi government, and to have used some of that money "to take care of" a United Nations official, Mr. Kelley said.

Mr. Chalmers is the second American indicted in the scandal-ridden program.

Many member countries at the United Nations have refused to cooperate fully with a separate, independent inquiry by investigators looking into waste, fraud and mismanagement in the oil-for-food program, which was approved by the Security Council in 1995, allowing Iraq to sell limited quantities of oil in return for essential goods.

The Independent Inquiry Committee, head by Paul A. Volcker, former head of the Federal Reserve, has issued two interim reports of its findings, and a final report is due in midsummer.

In its first interim report, on Feb. 4, the commission found that the former head of the program, Benon V. Sevan, had a "grave and continuing conflict of interest" in helping a friend obtain valuable Iraqi oil contracts and said a second United Nations official, Joseph Stephanides, had violated procurement rules. Both men have been suspended and are in the process of answering United Nations charges against them.

Questions have also been raised about the participation of Kojo Annan, son of the United Nations secretary general, Kofi Annan. The elder Mr. Annan was criticized in the most recent interim report on the grounds that he failed to perceive the appearance of a conflict of interest when Kojo Annan was employed by a contractor employed by the program.

Kofi Annan told 1,600 employees gathered in the General Assembly hall on April 6 that there had been "troubling lapses" in the management of the Iraq program but that he was making changes to prevent any recurrence.

The other American indicted in connection to the oil-for-food program was Samir A. Vincent, an Iraqi-American businessman. On Jan. 18, he pleaded guilty to lobbying influential Americans on behalf of Mr. Hussein without registering as a foreign agent. Mr. Vincent admitted he had secretly been paid hundreds of thousands of dollars and granted rights to sell millions of dollars' worth of Iraqi oil, in exchange for working to end United Nations economic sanctions imposed in 1990. He is now cooperating with Mr. Kelley.

http://www.nytimes.com/2005/04/14/international/middleeast/14cnd-food.html?hp&ex=1113537600&en=b044dee6eae6276b&ei=5094&partner=homepage

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