UNITED NATIONS (AP) – About 2,200 companies in the UN oil-for-food programme, including corporations in the United States, France, Germany and Russia, paid a total of US$1.8 billion (euro1.49 billion) in kickbacks and illicit surcharges to Saddam Hussein’s government, a UN-backed investigation said in a report released yesterday.

The report from the committee probing the US$64 billion (euro53.07 billion) programme said prominent politicians also made money from extensive manipulation of the UN oil-for-food programme in Iraq.

“The corruption of the programme by Saddam would not nearly have been so pervasive if there had been diligent management by the United Nations and its agencies,” said Paul Volcker, a former Federal Reserve chairman who led the investigation.

Using terminology that Saddam coined in the first Gulf war, Volcker said Saddam preyed on the “mother of all humanitarian programmes,” the largest aid effort at the United Nations.

The investigators reported that companies and individuals from 66 countries paid illegal kickbacks using a variety of ways, and those paying illegal oil surcharges came from, or were registered in, 40 countries.

There were two main types of manipulation: surcharges paid for humanitarian contracts for spare parts, trucks, medical equipment and other supplies; and kickbacks for oil contracts.

Among the companies that paid illegal surcharges were South Korea’s Daewoo International and three subsidiaries of Siemens AG of Germany. On the oil side, contractors listed included Texas-based Bayoil and Coastal Corp, Russian oil giant Gazprom, and Lukoil Asia Pacific, a subsidiary of the Russian company Lukoil.

The report strongly criticises the UN Secretariat and Security Council for failing to monitor the programme and allowing the emergence of front companies and international trading concerns prepared to make illegal payments.

It said responsibility should start with the UN Security Council, which is dominated by its five permanent members: Britain, China, France, Russia and the United States.

“The programme left too much initiative with Iraq,” the letter said. “It was, as one past member of the council put it, a compact with the devil, and the devil had means of manipulating the programme to his ends.”

The oil-for-food programme, which ran from 1996-2003, allowed Iraq to sell limited and then unlimited quantities of oil provided most of the money went to buy humanitarian goods.

It was launched to help ordinary Iraqis cope with UN sanctions imposed after Saddam’s 1990 invasion of Kuwait.

But Saddam, who could choose the buyers of Iraqi oil and the sellers of humanitarian goods, corrupted the programme by awarding contracts to – and getting kickbacks from – favoured buyers.

The smuggling of Iraqi oil outside the programme in violation of UN sanctions poured much more money – US$11 billion (euro9.1 billion) – into Saddam’s coffers in the same period, according to the report.