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Yahoo News!: Shell Denies Any Knowledge of Kickbacks: “The Royal Dutch/Shell Group denied Friday that it had any knowledge of kickbacks paid by a Geneva-based middleman it used to buy oil from Iraq (news - web sites) under the U.N. oil-for-food program” ( 4 Feb 05


By SAM CAGE, Associated Press Writer


GENEVA - The Royal Dutch/Shell Group denied Friday that it had any knowledge of kickbacks paid by a Geneva-based middleman it used to buy oil from Iraq (news - web sites) under the U.N. oil-for-food program.


Shell bought about 6.4 million barrels of Iraqi crude oil from African Middle East Petroleum, or AMEP, which has told U.N. investigators that it paid an illegal surcharge to obtain contracts from Saddam Hussein (news - web sites)'s regime.


"Shell wasn't aware of any surcharge payments being made to any persons on any of the cargoes it bought from third parties," spokeswoman Lisa Givert told The Associated Press from the company's headquarters in London.


AMEP president Fakhry Abdelnour told an investigation led by former Federal Reserve (news - web sites) Chairman Paul Volcker that he paid an illegal surcharge of $160,000 to an Iraqi-controlled bank account in Jordan in October 2001, using some of the proceeds he had received from the sale of oil to Shell.


The oil major made its final purchase from AMEP in September 2001, according to the Volcker report.


A receptionist at AMEP's office in Geneva said no one was available to comment and that Abdelnour was traveling.


AMEP is registered in Panama and has offices in Monaco, although Abdelnour lived and worked in Geneva during the oil-for-food program, which ended in 2003, said the Volcker report.


The Volcker investigation also said that Benon Sevan, the oil-for-food program chief, solicited oil allocations from Saddam Hussein's regime on behalf of AMEP between 1998 and 2001, and it raised concerns he may have received kickbacks for the help. The investigators said AMEP made profits of about $1.5 million from lifting Iraqi oil.


"Shell has no knowledge or information regarding the involvement of Mr. Benon Sevan in any of the Iraqi crude oil purchased by it," Givert said.


Abdelnour, who the Volcker report says comes from Egypt and is a cousin of former U.N. Secretary-General Boutros Boutros-Ghali, is currently not listed as living in Switzerland.


Secretary-General Kofi Annan (news - web sites) ordered disciplinary action Thursday against Sevan, who was sharply criticized in an investigation that accused him of a "grave conflict of interest" and "undermining the integrity" of the United Nations (news - web sites).


"Obviously there were some hard knocks in the report and we are concerned about it and that's why we intend to take action promptly," Annan said Friday in New York. "We do not want this shadow to hang over the U.N."


According to the U.N. investigation, Abdelnour contacted Saddam Hussein's regime to express an interest in buying crude oil under the oil-for-food program, but received no reply.


"Regardless of AMEP's standing in the oil industry, at that time in the program, it was highly unlikely that the oil would have been sold to AMEP unless a beneficiary to whom Iraqi officials had allocated oil designated AMEP as the purchaser," the report said.


"On the basis of the evidence ... it is apparent that Mr. Abdelnour arranged to have Mr. Sevan approach Iraq's Minister of Oil to obtain an allocation of oil for AMEP," the report explained.


Sevan's lawyer, Eric Lewis, accused Volcker's committee of making him a scapegoat and denied he ever received any money.


"Mr. Sevan ran the largest humanitarian program in U.N. history, a program that literally saved tens of thousands of innocent people from death by disease and starvation," Lewis said. "He is enormously proud of his service."

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