ABU DHABI // An Abu Dhabi-based businessman yesterday denied bribing Iraqi officials under the UN's Oil for Food Programme in return for contracts worth more than US$10 million (Dh37m). Ousama Naaman, a Lebanese-Canadian, appeared before the Washington DC Federal District Court, where it was alleged that he offered Iraqi officials kickbacks and kept two per cent of the proceeds for himself.
Mr Naaman, 62, is said to have operated several businesses in the UAE and acted as the agent of Inospec, an American chemical company. Although Mr Naaman is not a US citizen, he "acted as the agent for parent and subsidiary [Inospec and Swiss-owned Alcor] in Iraq and elsewhere beginning in at least 1995, and maintained his principal offices in Abu Dhabi", according to the indictment. He had been sought by US authorities under the Foreign Corrupt Practices Act since August 2008, but the indictment against him was sealed because he was living in the UAE, which has no extradition treaty with the US.
According to several of his employees here, Mr Naaman, travelled to Frankfurt, Germany, on July 28. It is believed that he was lured to Germany, where he was arrested at the airport. The indictment against him was unsealed the following day. In March, a German court ruled that he could be extradited to Washington to stand trial. Although Mr Naaman pleaded not guilty yesterday, according to court documents his legal team is working on a plea bargain.
It is believed that Mr Naaman's plea will be revisited because Inospec pleaded guilty in March to using him to win contracts with the Iraqi ministry of oil. According to UN reports on the programme, Iraqi officials and the Iraqi ministry of oil operated several front companies and used bank accounts here to receive kickbacks. After Iraq's invasion of Kuwait in 1990, the UN Security Council imposed strict sanctions on Iraq. In 1996, the sanctions eased for humanitarian reasons.
The Oil for Food Programme was created to allow Iraq to export oil worth $2 billion quarterly to buy humanitarian goods. The proceeds were to be transferred to a UN-controlled bank account. But many illicit deals, kickback schemes and inflated prices resulted, according to investigations. In this case, Iraq is said to have given contracts to Inospec and Alcor to provide tetraethyl lead for its oil refineries. Mr Naaman was allegedly used to win three major contracts.