Four charged in U.N. oil-for-food scandal
(Agencies)
Updated: 2005-04-15 09:06

Four more people were charged Thursday in the scandal in the U.N. oil-for-food program, including a Texas oil executive and a South Korean businessman who was at the center of a 1970s corruption case involving Congress.

The indictment also suggested that money skimmed from the oil program might have ended up in the hands of two U.N. officials. Their names were not released.

The oil-for-food program was created in 1996 to help Iraqis cope with a U.N. embargo imposed on Saddam Hussein's regime. The program let Saddam's government sell oil, provided the proceeds were used to buy food and medicine for Iraqis.

Ludmil Dionissiev, left, a Bulgarian citizen and U.S. resident, leaves the federal courthouse with his attorney David Howard, right, Thursday, April 14, 2005 in Houston. Dionissiev and David Bay Chalmers Jr. were indicted in the United Nations oil-for-food scandal Thursday on charges that they funneled kickbacks to Saddam Hussein with money intended for humanitarian relief. The two were arrested Thursday in Houston as prosecutors in New York announced their indictments. Briton John Irving also was indicted. [AP]

But authorities allege that the program was rife with corruption.

U.S. Attorney David Kelley called the new charges "two more pieces in the oil-for-food puzzle" and said the investigation is not over.

"We're going to wring the towel dry," he said.

One of the indictments announced Thursday charges a Texas oil company owner and two oil traders with paying millions in secret kickbacks to Saddam's regime to secure oil deals, thus cheating the program out of money for humanitarian aid.

The fourth person charged was Tongsun Park, a South Korean citizen and fugitive who allegedly accepted millions of dollars from the Iraqi government while he operated in the United States as an unregistered agent for Baghdad.

In the 1970s, Park was at the center of what became known as the Koreagate scandal, in which he was accused of trying to buy influence in Congress.

In the oil-for-food scandal, Park was accused of telling a cooperating government witness in 1995 that he needed $10 million from Iraq to "take care" of his expenses and his people. The witness believed that that meant a person identified in court papers only as "U.N. Official No. 1."

FBI agent Nicholas Panagakos alleged that the government witness in 1996 met at a New York City restaurant with Park, an Iraqi official and a high-ranking U.N. official, identified in court papers as "U.N. Official No. 2."

Park afterward claimed that he had used a $5 million guarantee from the government of Iraq to fund business dealings with the U.N. official, authorities said.

Park allegedly told the government witness in 1997 or 1998 that he had invested about $1 million he had gotten from Iraq in a Canadian company established by the son of U.N. Official No. 2. He said the company failed and the money was lost.

Kelley, pressed by reporters to say whether U.N. officials had actually received money tied to Park, said only that the issue was not part of the indictment.

Asked about the allegations, U.N. associate spokesman Stephane Dujarric said: "We've always maintained that anyone who's found to have committed any criminal wrongdoing in relation to the program should be prosecuted. So in that sense, what you're seeing today is progress."

The charges were announced at a news conference where an FBI official said the oil-for-food program was doomed when it let Saddam control who got to buy Iraqi oil.

"This was the embodiment of the fox guarding the henhouse," said John Klochan, acting assistant director in charge of the New York FBI office.

The indicted oil executive and traders are David B. Chalmers, sole shareholder of Bayoil (USA) Inc.; Ludmil Dionissiev, a Bulgarian citizen and permanent U.S. resident; and John Irving, a British citizen.

Chalmers and Dionissiev were arrested Thursday at their homes in Houston. Kelley said he will seek to have Irving brought to the United States from England to face charges.

"We will vigorously dispute the allegations of criminal conduct," said Catherine M. Recker, a lawyer for Chalmers and for Bayoil.

Dionissiev's attorney, David Howard, issued a statement saying, "the complete absence of specifics" in the indictment show that the government "has seriously over-reached by charging him. Mr. Dionissiev intends to plead not guilty because he is not guilty, and he will be found not guilty at trial."

The indictment accused the three of paying the kickbacks so that Chalmers' oil companies could continue to sell Iraqi oil under the U.N. program.

If convicted, the three could get up to 62 years in prison, while Park could face up to five years. Kelley said he would also seek $100 million from the three.

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