Thursday, May 12, 2005

Did Sask Wheat Pool Sell Oil for Food Wheat Through a Middleman?

and if so, who?
CBC Manitoba:
WINNIPEG – The Canadian Wheat Board is demanding a retraction from Saskatchewan MP David Anderson for comments he made in the House of Commons.

Last Friday, Conservative MP David Anderson stood in the House of Commons and accused the Wheat Board of illegal and corrupt practices in respect to a sale by the Saskatchewan Wheat Pool into Iraq's oil-for-food program.

"This directly affects Canadians because 30 per cent of the value of the contract disappeared through shipping delays and what are referred to as transfers to other buyers, whatever they are. That sounds like even more corruption," Anderson said. "How did the Wheat Board and its exporters manage to lose $8 million out of a $23 million illegal deal with Iraq?"
Wheat Board spokeswoman Louise Waldman says there is no basis to the allegations, which Anderson has declined to repeat outside the House of Commons. By law, MPs cannot be sued for anything they say inside Parliament.

The Wheat Board has asked Anderson to retract the comments. Waldman says as a marketing agency, the board has two things going for it: its product and its reputation.

"We have an extremely high-quality product, and we also have an extremely good reputation," she says. "We're viewed as having a lot of integrity in the international grain business, and our salespeople are extremely well-respected. So we felt that Mr. Anderson's comments threatened or damaged, could have damaged, this reputation."

From Steven Edwards April 30, 2005 story:
The congressional hearing in which the Saskatchewan Wheat Pool was mentioned Thursday saw BNP Paribas, the bank the UN used to broker deals in the oil-for-food program, acknowledge it improperly made 403 payments to third parties or their banks rather than to companies approved by the UN to deliver goods for Iraq.

Four of those payments are listed as going to the Saskatchewan Wheat Pool from 1999-2000, total value $23.15 million, and another two went to a Canadian-registered company called Limpex Trading in 2001, total value $124.1 million.

No allegation of corruption has surfaced, but congressional officials want to know more about the payments.

Officials of the Pool, Saskatchewan's largest grain handler and marketer, say that "as an accredited exporter for the Canadian Wheat Board," the Pool sent wheat to Iraq at that time.

They explain five vessels carried the shipments under the oil-for-food program, which the UN launched in late 1996 as a way to provide food and medicine to ordinary Iraqis as it pressed sanctions against the Saddam regime over weapons inspections.

"We received all the required verified approvals, and I have no reason to question the documentation wasn't valid," Mayo Schmidt, chief executive officer of the Saskatchewan Wheat Pool, said Friday in an interview.

"We disclosed in our annual report of 2000 that there were shipments to Iraq. In fact, we ended up suffering an $8.7-million loss because portions of the CWB wheat were rejected, and there were costs related to unloading delays and the transfer of the wheat to alternative buyers."

The UN directed the New York branch of Banque Nationale de Paris, which later became BNP Paribas, to handle finances for the six-year program, which ended following Saddam's overthrow.

Appearing at the hearing, held by the U.S. House subcommittee on oversight investigations, Everett Schenk, chief executive of BNP Paribas North America, said "some mistakes were made" as the bank processed 54,000 payments. But of the 403 he said "should not have occurred," he said the bank has uncovered no evidence any were "related to any corruption which may have occurred in the oil-for-food program."

Schmidt said the Pool will provide documentation of its shipments to Iraq "if asked by an agency of government that requires information about" them.
The report does not allege that payments were redirected from the SWP to any other party by BNP Paribas.

Later, Claudia Rosset reported in the NY Sun:
BNP was able, however, to supply Mr. Rohrabacher with the information that whoever might have been in charge of East Star, the company over the period 2000-03 received more than $80 million in BNP rerouted oil-for-food payments that were officially due to a Saudi Arabia-based supplier, Al Riyadh International Flowers, which BNP described as "reportedly" owned by a member of the Saudi royal family, Prince Bandar Bin Mohammed Bin Abdulrahm Al Saud. He is not the Prince Bandar who is the Saudi ambassador to America.

The Prince Bandar in question also turns up personally on the list of BNP's third-party payments, as having received, in 1999, $353,500 rerouted from another of his companies, Zahrat Al-Riyadh. This in turn shows up on the BNP list as having had about $29 million in oil-for-food payments rerouted by BNP in 1999-2000 to the Saskatchewan Wheat Pool.
This report alleges that funds were rerouted to the SWP. Transactions conducted through a middleman to Iraq could be an explanation - completely speculation on my part. I have seen records at the UN showing wheat purchases from Cyprus - which raised an eyebrow - I was not aware that Cyprus was a wheat-producer. This raised in my mind the possibility that wheat was traded to Iraq through agents.

It would be helpful to the OFF investigation to know to whom SWP actually sold the wheat it shipped to Iraq.

Here's how I read it now: a portion of SWP's shipment to Iraq was rejected on arrival (why? was it the quality of the product?), was transferred after sale to another party. Result: loss of $8m or so on the deal.

I'm making no allegations of any wrongdoing by SWP. But I have questions.

UPDATE: Cyprus wheat details found at UN OFF site.
1300333 Cyprus 2001/193 (260) KTG KENTFPRD GLOBE L.T.D. Foodbasket WHEAT WFP
This record was found using this Google search. A similar search, substituting 'Canada' for 'Cyprus' results in no hits. I will keep looking through the UN records to see if there was a contract between SWP and the UN. If the SWP had a direct contract with UN, I am not able to find a record of it, although it took me just a few minutes to find the Cyprus records again.