Ruminatrix
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Saturday, May 10, 2003
Baghdad bank job
A lot of money went missing in the last days of the ancien regime in Baghdad. Tuesday's NYT reported that Qusay Hussein and Abid al Hasmid Masood -- assistant to the Iraqi president -- made a large withdrawal around 4 am on March 18th, hours before the first bombs struck Baghdad.
That's $900 million, plus Euros 100m -- or $1bn in cash.
So why was there so much specie floating around the Central Bank? Part of the answer is the Kirkuk-Banias pipeline. Re-opened in 1997, this conduit from the Northern Iraq fields to the Syrian port of Banias (or Baniyas) was used by Iraq to smuggle between 100,000 and 200,000 barrels of oil per day in circumvention of the UN oil-for-food program. Syria pretended the oil was from its own fields and paid the Iraqis off in cash to the tune of $6.6bn between 1997 and 2001. Its existence is not exactly secret: Google turns up 60-odd hits for "Kirkuk-Banias," mostly in oil-industry sources.
The best-known spigot suspected of filling Mr. Hussein's personal coffers was Iraq's oldest oil pipeline, from the northern oil fields around Kirkuk to Syria's Mediterranean port, Baniyas.Question: Why did it take the American press until 2003 to find out about the smuggling? This smuggling can't exactly have been a secret to US intelligence agencies, can it?
The pipeline pumped oil that was sold at cut-rate prices to Syria in return for kickbacks to the Hussein government, according to oil analysts and American officials.
Although American officials complained that the pipeline circumvented economic sanctions, it remained open until United States forces closed it last month.
"Syria continually denied doing it, they said they were testing the line," said James Placke, an oil analyst with Cambridge Energy Research Associates. "Well, they tested the line for two and a half years at the rate of about 150,000 to 200,000 barrels a day."
Since 1996, the United Nations has had official control of all Iraqi oil profits, which were to be used to purchase food and other relief supplies for Iraqi civilians.
While the United Nations has defended its oversight of the program, the General Accounting Office estimated last year that oil smuggling and other kickbacks linked to the United Nations program allowed Mr. Hussein to steal about $6.6 billion between 1997 and 2001.