Thursday, November 18, 2004.

Russia Stalls UN Hunt for Iraqi Assets

By Greg Walters

Special to The Moscow Times

Moscow is shielding a former Iraqi ambassador to Russia and two top former Iraqi spies from a U.S.-led campaign to repatriate some of the billions of dollars in assets Saddam Hussein's regime stashed around the world, a senior U.S. official said.

The United States, Britain and Iraq want the three men and a front company run by one of them added to a list of former Iraqi officials whose assets must be returned to the interim government in Baghdad under Security Council Resolution 1518, but permanent council member Russia won't allow it, U.S. Assistant Treasury Secretary Juan Carlos Zarate told a Senate committee investigating corruption in the UN's sanction program for Iraq.

Of the 232 people, companies and other entities that Washington, London and Baghdad have asked to be put on the list, only four have been contested -- all by Russia.

Zarate, the Treasury Department's point man for tracking terrorist and other criminal funds, said one of the three men, Nabil Abdullah al-Janabi, recruited foreigners to fight U.S. forces in Iraq, offering signing bonuses of $2,500. Al-Janabi was Iraq's ambassador to Lebanon before the March 2003 invasion and allegedly a senior official in the IIS, Hussein's secret intelligence service.

Others enjoying Russia's protection, according to Zarate, are: Abbas Khalaf Kunfuth, Hussein's last ambassador to Moscow; Muhannad Juma al-Tamimi, an undercover agent for the IIS; and Bloto International Ltd., a Bangkok-registered front company run by al-Tamimi.

Al-Tamimi is also wanted by Washington for allegedly plotting to kidnap and attack U.S. citizens in Thailand in January 2003, and for allegedly transferring explosives stored in the Iraqi Embassy in Bangkok to Baghdad in December 2001.

"The UN 1518 Committee has not yet adopted these names because Russia has placed a hold on them and prevented committee action," Zarate said, according to official transcripts of his testimony Monday. "The departments of state and treasury have been working diligently to convince Russia to lift its hold."

The Foreign Ministry in Moscow did not reply to requests for comment, but Russia's diplomatic mission to the United Nations downplayed the issue.

The Russian delegation has placed a hold on the names for "technical reasons," a Russian official at the UN said Wednesday by telephone from New York.

"There is no hot potato," said the official, who requested anonymity. "It is not ruled out that this hold will be canceled later. ... One should be careful in dealing with people's property."

Zarate's testimony comes on the heels of several reports detailing massive corruption that took place in the UN's $61 billion oil-for-food program, which ran from 1996 to the eve of the U.S. invasion in March 2003. Russian companies were the top participants of the program, through which Russian politicians and other entities allegedly made millions.

Zarate said Kunfuth, the former ambassador to Russia, embezzled $4 million of Iraqi funds that had been entrusted to him while he was stationed in Moscow. That sum has been frozen in a Russian bank, and Washington is negotiating with Moscow to have those funds sent back to Iraq, he said. Zarate did not identify the bank, and the Treasury Department did not respond to a request for clarification Wednesday.

The Iraqi Embassy in Moscow was one of the main collection points for illicit surcharges Hussein earned under the oil-for-food program, according to a CIA report written by Charles Duelfer, the top U.S. weapons inspector in Iraq.

Duelfer told Congress last month that Hussein instituted a system of illegal surcharges in exchange for vouchers that gave the bearer the right to trade Iraqi oil, and that Russian officials, companies, political parties and ministries were the top recipients.

Most of the $61 million in illicit surcharges that was paid in cash to Iraq's embassies around the world was deposited in the Moscow embassy "by Russian entities," according to Duelfer's report. Millions more went to bank accounts in third countries.

The Baltimore Sun, which interviewed Kunfuth shortly after the fall of Baghdad and just before his return to Iraq, said he showed up wearing aviator glasses and an open-necked shirt, looking "more like a boxing promoter than a diplomat." He was summoned to Baghdad in June 2003 for consultations with the interim administration. A month later three armed men stole $3 million from a safe in the Iraqi Embassy.

The U.S. State Department said in August that Kunfuth was still in Baghdad, and al-Janabi, the former ambassador to Lebanon, is reportedly still in Beirut. Al-Tamimi's whereabouts, however, are not known. He was expelled from Thailand in April 2003, according to the State Department statement.

Zarate said bank accounts and other assets belonging to the Hussein regime have been identified in Russia and 20 other countries, including Switzerland, France and Liechtenstein.

More than $6 billion in cash and other assets have been found and frozen so far, about $2.7 billion of which -- including one of Hussein's Falcon 50 corporate jets -- has been returned to Iraq, he said.

Locating secret assets salted away by Hussein is essential to preventing them from being used to fund the Iraqi insurgency and to keep them out of the hands of terrorists, Zarate said.

"The international community cannot permit these assets to be used against our troops, coalition partners and innocent civilians in Iraq, or potentially to support the nefarious activities of terrorists around the world," he said.

Some political observers said Russia's behavior regarding Resolution 1518 makes it look as if it has something to hide.

"There are persistent rumors that high-ranking Russian officials, in office and retired, were up to their eyeballs in oil-for-food scams," said Ariel Cohen, an analyst at the Heritage Foundation, a conservative think tank in Washington. "What a white-collar criminal would do in a situation like that is to try and cut a chain that would lead to him or her."

Russian officials and businessmen identified in the Duelfer and Senate reports who have commented on the record all denied wrongdoing.

The Senate report put Hussein's take from UN sanctions-busting activity at more than $20 billion. Unlike the Duelfer report, however, the Senate went back to August 1990, when the UN first slapped sanctions on Iraq.

One of the few Russians publicly identified during Monday's Senate hearings was Vladimir Zhirinovsky, the leader of the Liberal Democratic Party. Investigators presented a letter on party letterhead allegedly from Zhirinovsky to an "international oil company" inviting representatives of the company to come to Russia to negotiate the purchase of Iraqi oil.

"It is my honor to invite you for negotiations to Moscow, from the 18th to the 25th of January 1999. We will be happy to meet with you," Zhirinovsky wrote, according to Mark Greenblatt, a counsel for the Permanent Subcommittee on Investigations in the U.S. Senate. The name of the company was withheld, Greenblatt said, because the firm is under investigation. He noted that the date corresponded to the timing of an allocation of Iraqi oil made in Zhirinovsky's name, according to the Duelfer report.

Zhirinovsky did not return calls asking for comment Wednesday, but has repeatedly denied receiving oil or oil profits from the Hussein regime.