June 15, 2005

From Russia with Love

Here's yet another tentacle thrown off by the ever-widening Oil for Food scandal: possible Russian complicity, via The Wall Street Journal (subscribers only).

The alleged role of the Iraqi Embassy in Moscow in helping Baghdad exploit the United Nations' oil-for-food program has emerged as a new flash point in already rocky U.S.-Russian relations.

In the three years before the U.S.-led invasion of Iraq, say former employees of the Iraqi Embassy in Moscow and American investigators, cash deliveries were funneled through the embassy as part of an elaborate kickback scheme to Saddam Hussein's government, paid in return for lucrative oil contracts under the U.N.'s oil-for-food program.

The main question facing investigators is whether the scheme took place with the active cooperation of the Kremlin or was simply part of the murky and often corrupt business climate that has flourished in Russia since the fall of the Soviet Union. The intermingling of Russia's government and business spheres -- many companies are either formally state-owned or under the unofficial control of powerful political or military figures -- is making the issue more difficult to resolve.

Posted by Alan at June 15, 2005 06:39 AM