Settlements

ST-378
Vitol SA (UN Oil-for-Food)
Vitol SA
United States
New York County District Attorney's Office
Iraq (UN Oil-for-Food)
2007
11/20
Unknown
Legal Person
Criminal
Guilty Plea
Restitution; Legal Costs
$17,500,000.00
$0
$13,000,000
$4,500,000
$13,000,000
Restitution to Iraq via Development Fund for Iraq
Art.16, Art.26
Art. 1, Art. 2
Grand Larceny
Grand Larceny
Yes
According to the New York County District Attorney's Office Press Release, on November 20, 2007, "Manhattan District Attorney Robert M. Morgenthau announced today the guilty plea of a Switzerland-based oil trading company for its involvement in a scheme to pay kickbacks to Iraq in connection with oil purchases made under the United Nations Oil-for-Food Programme. VITOL, S.A. (VITOL) pleaded guilty today in New York State Court to Grand Larceny in the First Degree in connection with the scheme. According to the plea, VITOL paid $13 million in kickbacks to Iraqi officials in connection with oil purchases but allowed false representations to be made to the United Nations that no kickbacks were paid. Relying on those false representations, United Nations officials approved the contracts and authorized millions of dollars in payments for the benefit of Iraq from the Oil-for-Food Programme. Instead of halting these transactions, United Nations officials were duped into allowing the Oil-for-Food Programme to continue unchanged. As a result of its guilty plea, VITOL will pay restitution of $13 million to the Iraqi people through the Development Fund for Iraq and a payment of $4.5 million in lieu of fines, forfeiture and to cover the cost of prosecution. The plea by VITOL is part of a continuing investigation by the Manhattan District Attorney's Office into the Oil-for-Food Programme. This investigation began as a result of this office's cooperation with the Independent Inquiry Committee into the United Nations Oil-for-Food Programme, headed by Paul Volcker. Mr. Morgenthau said, 'The Oil for Food Programme was established by the United Nations with the noble goal of providing for the humanitarian needs of the Iraqi people. One outcome of this investigation, and last week's joint investigation involving Chevron, is to insure that illegal funds that were paid to Saddam Hussein's government are redirected to benefit the Iraqi people.' Through its representative, duly appointed by Vitol's Board of Directors, VITOL admitted in court today that while the United Nations Oil-for-Food Programme was in effect, VITOL purchased Iraqi crude oil first as a direct purchaser and later from third-parties. In June 2001, after an OPEC meeting, an agent of VITOL was told by Iraqi officials that surcharges had to be paid in order for Iraqi crude oil to be lifted. Over the next year, VITOL paid or caused surcharges to be paid on certain oil purchases in two ways. In direct purchases, VITOL had an associated entity called Vitol Bahrain send the surcharge monies to accounts controlled by the Iraqi regime. In indirect purchases, VITOL financed the purchase of oil through third-parties who then paid the surcharge to the Iraqi regime. VITOL did not inform the UN about the surcharge payments. During the period from June 2001 through September 2002, approximately $13,000,000 in surcharge monies were paid directly to the Iraqi regime in connection with crude oil purchased directly or indirectly by VITOL. The investigation into the United Nations? Oil-for-Food Programme has resulted into two other actions against oil companies. Last week, there was a settlement with the Chevron Oil Company in which Chevron paid $27 million, of which $20 million was paid as restitution for the benefit of the Iraqi people. In October 2005, Midway Trading pleaded guilty for paying kickbacks to Iraq for oil purchases." Mr. Morgenthau thanked the Independent Inquiry Committee into the United Nations Oil-for-Food Programme and Paul Volcker who heads the Committee. (Source: New York County District Attorney's Office, News Release on Vitol SA Plea, November 20, 2007.)