Demagogue

For months, the US Congress has been investigating activities that violated the United Nations oil-for-food programme and helped Saddam Hussein build secret funds to acquire arms and buy influence.

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But a joint investigation by the Financial Times and Il Sole 24 Ore, the Italian business daily, shows that the single largest and boldest smuggling operation in the oil-for-food programme was conducted with the knowledge of the US government.

“Although the financial beneficiaries were Iraqis and Jordanians, the fact remains that the US government participated in a major conspiracy that violated sanctions and enriched Saddam's cronies,” a former UN official said. “That is exactly what many in the US are now accusing other countries of having done. I think it's pretty ironic.”

Overall, the operation involved 14 tankers engaged by a Jordanian entity to load at least 7m barrels of oil for a total of no less than $150m of illegal profits. About another $50m went to Mr Hussein's cronies.

In February 2003, when US media first published reports of this smuggling effort, then attributed exclusively to the Iraqis, the US mission to the UN condemned it as “immoral”.

However, FT/Il Sole have evidence that US and UK missions to the UN were informed of the smuggling while it was happening and that they reported it to their respective governments, to no avail.

Oil traders were told informally that the US let the tankers go because Amman needed oil to build up its strategic reserves in expectation of the Iraq war.

Last week Paul Volcker, head of the independent commission created by the UN to investigate failures in the oil-for-food programme, confirmed that Washington allowed violations of the oil sanctions by Jordan in recognition of its national interests.