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First Adscam, now Saddamscam?

By Kevin Steel ⋅ May 30, 2005 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

What do the prime minister, a UN official and a former Iraqi dictator have in common? That’s what oil-for-food investigators want to know

As if Paul Martin didn’t have enough scandals to worry about, investigators probing the United Nations oil-for-food fiasco have unearthed evidence that links Canada’s prime minister to the fraud. This time, the story isn’t about dirty ad executives and corrupt party hacks. In this scandal, the evidence appears to link Martin with one of the most brutal dictators in recent memory, the man who corrupted oil-for-food, Saddam Hussein.

The connection emerged in April, when investigators into the scandal looked into Cordex Petroleum Inc., a now defunct Calgary oil exploration company. Tongsun Park, a Korean businessman who allegedly acted as an agent for Hussein’s regime and paid millions to bribe UN officials, invested US$1 million in Cordex in 1997. The money may have come from Iraq. Another shareholder in Cordex was Martin, who owned 4.6 per cent of the company through his holding company CSL Group Inc.

The man who ran Cordex, Fred Strong, is also connected to Martin. Strong’s father is Maurice Strong, a special adviser to the prime minister and his longtime mentor; he was Martin’s boss when the two worked together at Montreal-based Power Corporation in the sixties. Maurice, UN Secretary General Kofi Annan’s right hand, was also a major shareholder in his son’s company, as well as chairman for a time.

In an indictment issued by U.S. federal prosecutors, Park (who has since gone into hiding to avoid U.S. criminal extradition) is alleged to have targeted two UN officials for bribes. Maurice Strong, the former head of Petro-Canada and Ontario Hydro, has admitted that he is one of them. He temporarily stepped down in April from his role as the UN’s special envoy to North Korea, after investigators found he had inappropriately hired his stepdaughter to work in his office as an aide. But despite being tied to Park, Strong says he had no involvement in oil-for-food. (The US$64-billion program was set up to allow Hussein to sell limited quantities of oil during the U.S. embargo to allow him to buy humanitarian supplies for his country, but investigations have revealed that Hussein sold oil at preferred rates to friendly buyers in exchange for kickbacks.) “Indeed I cannot recall a single instance in which I had any contact or discussion on the program with any of the officials responsible,” Strong wrote in a statement issued April 18. He has called Park’s participation in Cordex “a normal business investment.” Martin has yet to comment, but on May 2, Foreign Affairs Minister Pierre Pettigrew responded to calls from the Opposition to investigate Canadian links to oil-for-food by defending Strong. “I can tell you that Mr. Strong has absolutely denied these allegations and this country should be very proud of the role Mr. Maurice Strong has played over the years, working systematically for making progress at the United Nations institutions,” Pettigrew told the House.

But Martin is only the latest in a string of Canadian connections to the fiasco. A February interim report by the Independent Inquiry Commission–the official UN body investigating the scandal–alleged that Canadian UN Deputy Secretary General Louise Fréchette blocked auditors from reporting oil-for-food irregularities to the Security Council while the program was still active. Also, one of the commission’s lead investigators, a Canadian named Reid Morden, was Fréchette’s boss when she was working for Canada’s Foreign Affairs department, where he was deputy minister in the early 1990s. Paul Volcker, chair of the commission, has faced conflict of interest accusations because he is an adviser to Power Corp. Power’s subsidiary, Pargesa Holdings S.A., is owned, in part, by European bank BNP Paribas, which oversaw banking matters for the oil-for-food program and is itself under investigation by a Senate committee probing oil-for-food. Power, controlled by Montreal’s Desmarais family, also has a major share in French oil giant Total Group Inc., which had negotiated contracts with Hussein to develop large Iraqi oil deposits once sanctions were lifted.

Says Scott Newark, director of operations at the Investigative Project, a private counterterrorism think-tank based in Washington, D.C.: “Every time they lift up a rock at the UN, they seem to find another Canadian.”

[This article appeared in the May 30 issue of the Western Standard.]