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Tuesday, April 8

Saddam's wealth stems from illicit oil sales, kickbacks, investigators say

By Chuck Raasch | GNS

WASHINGTON - As coalition soldiers marvel at the opulence in Saddam Hussein's palaces, the United States and its allies are seizing assets of the Iraqi leader and his family here and around the world.

Prior to the war that began March 19, Saddam amassed a personal fortune that some say exceeds $10 billion through illegal oil sales, kickbacks on legal oil sales and imported goods such as cigarettes, and even by exploiting athletes' foreign currency exchanges, according to government and private industry reports.

After the war began, the United States confiscated about $1.7 billion of Saddam's assets frozen in banks here since the first Persian Gulf War in 1991. The money was deposited in the Federal Reserve Bank of New York for postwar use by the Iraqi people. About $125 million was paid to people who had successfully sued the Iraqi government, a U.S. Treasury Department spokesman said.

In addition, unidentified foreign governments have identified about $1 billion in Saddam's assets that will be set aside for a new regime in Iraq, the Treasury Department said Tuesday.

Treasury Secretary John Snow said the United States "is directing a worldwide hunt for the blood money that Hussein and his cronies have stolen from the Iraqi people.''

Dispatches from reporters traveling with American and British troops have shown gold bathroom fixtures, expensive furniture, fish-stocked moats and other trappings of wealth in palaces built for Saddam and his sons, Odai and Qusai. The State Department estimates Saddam spent about $2 billion building 48 such palaces.

American troops told USA TODAY that the contrast between the palaces and everyday life was striking.

"You go through little towns, and people barely got running water,'' said Army Pvt. Sam Hardy of Richmond, Va. "And the conditions these people live in - for him to say his people love him, it's crazy.''

An extensive study by the Coalition for International Justice (CIJ), a nonprofit human rights group, of Saddam's wealth estimated that he and his family took in about $2.5 billion in illicit riches last year alone. Oil smuggling, mostly into neighboring countries, accounted for 90 percent of the revenue, according to the report.

The Coalition for International Justice specializes in monitoring human rights abuses in Rwanda, the Balkans, East Timor and elsewhere.

The coalition's report lists other sources of Saddam's income "from transportation ventures to the cigarette smuggling that has developed into a turf war between Saddam's sons, to the cynical exploitation of opportunities afforded through the Iraqi Olympic Committee, to the gouging of (religious) pilgrims visiting Iraq's Holy sites.''

The Government Accounting Office estimated Saddam's wealth at $6 billion, but the coalition's study estimated that Saddam had taken in an average of $2 billion annually in personal wealth for the last five years.

Jules Kroll, a leading international investigator who probed the Iraqi leader's global wealth for the Kuwaiti government after the 1991 Persian Gulf War, agrees with the coalition estimates that Saddam has amassed holdings exceeding $10 billion.

The coalition's study also said that the United States and its allies were reluctant to crack down on the Saddam regime's illicit trade with bordering states Syria, Jordan and Turkey because they were allies in the war on terrorism.

Significant amounts of the oil sold for Iraq's U.N.-sanctioned "oil for food'' program is consumed in the United States, according to the coalition study. In January 2002, the month that President George W. Bush first dubbed Iraq part of the "axis of evil,'' 75 percent of the oil sold that month by the country ended up in the United States, according to the human rights coalition.

The CIJ study also identified France, Russia and Australia as Iraq's top importers.

Among the findings in the Coalition for International Justice study:

- Saddam and his sons, Odai and Qusai, have capitalized on over $1 billion annually in unsanctioned oil and diesel sales to neighboring Syria and Turkey and through kickbacks on the sales of goods from those countries.

- Saddam's regime receives kickbacks of hundreds of millions of dollars, such as a 30-cent-a-barrel surcharge on sanctioned oil sales.

- An Iraqi company said to be controlled by Odai charges enormous amounts to Shiite pilgrims from Iran, Pakistan, India and Lebanon when they visit shrines in Najaf and Karbala.

- Iraq, a nation of heavy smokers, consumes about 18 billion cigarettes annually. About 4 billion cigarettes are smuggled through Cyprus, according to international justice coalition. The CIJ report said that Odai "has long controlled the importation of cigarettes into Iraq.'' One defector, Abbas al-Janabi, a former chief aide to Odai, said he was working on a cigarette deal worth "hundreds of millions of dollars'' just before he defected in 1998.

- Athletes who travel overseas are permitted to convert Iraqi dinars into U.S. dollars only if they kick back three-fourths of the exchange to Saddam's regime. In addition, Odai, who is in charge of Iraq's Olympic Committee, is said to have gained financially from that association.