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France disputes report on oil deals

PARIS -- Allegations that French companies illicitly reaped financial benefits from the UN oil-for-food program are ''inaccurate" and unsubstantiated, France said yesterday in a sharp response to a US arms inspector's report.

The report by Charles Duelfer, which alleged that French companies and individuals participated in a secret oil voucher program that helped former Iraqi leader Saddam Hussein circumvent UN sanctions, lacks proof to back up the charges, the Foreign Ministry said.

The Foreign Ministry's response was an attempt to cast doubt on Duelfer's report, published earlier this month, listing foreign entities that received vouchers for oil contracts under the UN oil-for-food program.

The report said the names of American companies and individuals who may have been involved in oil deals weren't released because of US privacy laws.

It alleged that Hussein's government had used the oil vouchers both to solicit kickbacks and to reward countries and individuals willing to cooperate with Iraq's political goals. Companies and individuals from Russia, France, and China dominated the list.

But only 8 percent of France's oil imports came from Iraq in 2001, a separate Foreign Ministry statement said. It added that of 1,129 companies from 86 countries on a list of registered buyers under the oil-for-food program, only 20 were French.

''It is completely inaccurate to say that France had major commercial interests in Iraq before the war," the statement said.

The oil-for-food program had an account at French bank BNP Paribas, but France said the bank was located in the United States, subject to US regulations, and was one of two charged with managing the program.

''The account was also inspected twice yearly by the Board of Auditors of the United Nations," the ministry statement said.

In addition, many companies that participated in the oil-for-food program that were identified as French were not, the ministry said. Some companies were American but used French branches, agents, or intermediaries, it said.

France is cooperating with former US Federal Reserve chairman Paul Volcker, who was appointed in April by UN Secretary-General Kofi Annan to head a panel investigating alleged corruption in the multibillion-dollar UN oil-for-food program in Iraq.

Volcker was in Paris two weeks ago to meet with high-level officials who pledged their cooperation. France has agreed to declassify certain documents and make officials available for interviews.

Volcker's independent panel released the names of 248 companies that received Iraqi oil and 3,545 companies that exported goods to Hussein's government. Volcker has said that being on the list doesn't imply that a company is guilty of illicit, unethical, or corrupt behavior.

Among the companies listed that received Iraqi oil were four American companies: Texaco and Chevron, now ChevronTexaco Corp.; Mobil, now Exxon Mobil Corp.; and a third company listed as Phoenix International.

ChevronTexaco and Exxon Mobil have been subpoenaed by the Manhattan US Attorney's office for a grand jury investigation into the oil-for-food program.

Among the thousands of companies listed as exporting goods to Iraq were a handful of American ones. They included Baker Atlas, an oil service company owned by Baker Hughes Inc.; Cargill Inc.; and Continental Grain, now owned by Cargill.

France strongly believes that Duelfer, a CIA adviser who heads the Iraq Survey Group hunting for banned weapons in Iraq, was acting ''outside his mandate" when he issued his report, the diplomat said. ''Bribes may have been paid, but that is for Volcker to establish."

The oil-for-food program, which began in December 1996 and ended in November 2003, was launched to help Iraqis cope with UN sanctions imposed after Hussein's 1990 invasion of Kuwait.

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