28 April 2005 Blog Home : April 2005 : Permalink
Among questions the subcommittee is likely to pursue is why BNP, straying outside its contract with the United Nations, reassigned letters of credit - meaning that payments from the Iraq escrow account guaranteed to one contractor approved by the United Nations for a given deal were instead sent to an unapproved third party. Under a U.N. sanctions regime, in which the basic aim of oil for food was to monitor Saddam's deals, such rogue payments, running right through the bank entrusted with the account, should have raised red flags. But the United Nations made no complaint. According to the U.N.-authorized inquiry led by Paul Volcker, the world body did not even bother to review BNP's handling of the letters of credit. And, like most of the more telling details of oil for food, the specifics of BNP's activities under the program were kept secret by the United Nations.
Three instances of reassigned oil-for-food letters of credit have already come to light, disclosed last November at a hearing of the House International Relations Committee, where members questioned BNP's chief executive officer for North America, Everett Schenk, who did not provide an explanation. In all three cases, the letters of credit - totaling millions - guaranteed funds from the Iraq account meant to pay one of Saddam's U.N.-approved suppliers of relief, the Saudi Arabia-based firm Al Riyadh International Flowers. Instead, BNP reassigned the letters of credit to a Malaysia-based firm, East Star Trading Company. Why?
Good questions - I wonder why BNP doesn't make these services available to other clients. I wonder what services BNP offer to other large net worth customers? and how do I get on the list?