From the Report on WMD and Oil for Food

from the report on wmd and OIL FOR FOOD The onset of the OFF program began what became a burgeoning source of real disposable income. The revenues Iraq garnered grew incredibly from an estimated $250 million in 1996 to $2.76 billion in 2001. The process of oil exports offered leverage in the international oil markets. The UN system for controlling Iraqi oil exports had the unintended consequence of allowing ample opportunities for corruption. Corruption of this process suited the objectives of Saddam of escaping the fetters of the sanctions controlled by the UN Security Council. As experience grew with the process of the Oil for Food program, Iraq found that the allocation of oil liftings was also a splendid opportunity to develop infl uence. Iraqi oil liftings were priced below market substantially; hence, obtaining the right to lift a tanker full of Iraqi oil was worth a considerable amount of money. While Iraq, due to the constraints imposed upon it by the UN system, could not legally receive cash, the price differentials could be pocketed by whatever trader designated to lift Iraqi oil. Saddam, again demonstrating his style of infl uence, distributed these allocations to those he deemed helpful in eroding support for sanctions. Saddam applied a dual approach to this objective. On the one hand he emphasized the suffering of the innocent Iraqi civilian population and argued that the sanctions were immoral. At the same time he gave prominent vocal Iraq supporters and willing infl uential UN-offi cials lucrative oil allocations. He gave individuals a moral rationalization for their support and friendship to the Regime. This worked with individuals as well as countries. The Regime’s strategy was successful to the point where sitting members of the Security Council were actively violating the resolutions passed by the Security Council. 1998—End of Inspections. The patience and utility of cooperating with the Security Council and the UN inspectors were diminishing in the view of Baghdad during the course of 1998. The potential of the inspection process leading to a formal lifting of sanctions by the Security Council was seen as diminishing. The approach of eroding the constraints of sanctions until they collapsed appeared more promising. Certainly the fl ow of imports and revenues was growing. The divisions in the Security Council were greater between the United States and the United Kingdom on one side and France and Russia on the other. (Iraq encouraged competition between France and Russia to do more to support Baghdad.) At the same time, Baghdad viewed the domestic controversies in the United States as indicating, if not weakness, certainly a distraction to the White House. During the summer of 1998, when UNSCOM surfaced its concern over the evidence it found that Iraq had, contrary to its declarations, weaponized VX in missile warheads, Baghdad appears to have concluded that there was no prospect of satisfying the inspection teams. Cooperation with UNSCOM was seen as a trap, not a path to ending sanctions. Baghdad ended full cooperation in August and began a series of confrontations with the UN that aimed at bringing its dialogue to the Secretary General and Security Council directly, and marginalizing UNSCOM. Baghdad was largely successful in drawing the Secretary General into the controversy and causing France and Russia to take fi rmer positions on its behalf. Ultimately, Iraq did not fully cooperate with UNSCOM in a test period of renewed