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The Pentagon has asked the Coalition Provisional Authority in Baghdad to cancel three contracts for Iraqi cell phone networks worth about $500 million annually, citing fraud and the companies' links to an Iraqi-born Briton with ties to Saddam Hussein.

A June 14 memorandum from John A. Shaw, deputy undersecretary of defense for international technology security, says an investigation uncovered "fraud on the Ministry of Communications by Orascom, Atheer and AsiaCell."

The companies are suspected of rigging the bids for the cell phone contracts in favor of Nadhmi Auchi, who owns part of Orascom and a controlling interest in the bank BNP Paribas, which "is the French bank selected by Saddam Hussein to run the Oil for Food program."

"His role in assisting the Saddam regime, to his own immense profit, makes all three firms ineligible under Section 6.1.4 [of the contract] in that all the evidence strongly indicates Auchi had a direct or indirect ownership interest in all three firms at the time of signature, and his role continues today," the memorandum said. Read Full Post | Read Original News
Posted June 30th 2004 | 0 comments

An international financier with ties to Saddam Hussein's regime and the United Nations' oil-for-food program helped Middle Eastern and European cell-phone companies edge out American firms for lucrative Iraqi contracts, The Washington Times has learned.

Nadhmi Auchi, an Iraq-born British national who was involved in international arms trading, is being investigated for purportedly rigging bids with the Iraqi Communications Ministry and the Coalition Provisional Authority, which resulted in contracts being awarded to three companies tied to Europe, according to defense officials familiar with an internal investigation.

All the companies have links to Auchi, who was convicted in France last year for taking illegal payments. The contacts could be worth some $500 million annually in future cell-phone service in Iraq, said officials who discussed details ofthe investigation on the condition of anonymity.

"The winners of the Iraqi cellular tender were Saddam's most senior financiers, their Egyptian, Kuwaiti and Iraqi supporters, the bank BNP Paribas, European cellular corporations, particularly Alcatel and the European GMS technology it depends on, and Chinese telecom interests, such as Huawei, which had been active in breaking the Iraqi embargo," said a defense official. Read Full Post | Read Original News
Posted June 27th 2004 | 0 comments

The Defense Department has urged the U.S. led Iraqi provisional government to void three contracts for Iraqi cell phone service because of fraud, the Washington Times reported on Tuesday, citing an agency memorandum. The winning bidders, Orascom, Atheer and AsiaCell, are believed to have rigged the bids for the contracts, Deputy Undersecretary of Defense for International Technology Security John Shaw said in the memorandum obtained by the newspaper. Provisions of the contracts forbade them from direct or indirect ownership by anyone who supported or benefited from the Saddam Hussein regime but there were ties, according to the report. The contracts are worth up to about $500 million annually.

Shaw sent his recommendation to Paul Bremer, head of the U.S. led Coalition Provisional Authority, who turned the matter over to the CPA's general counsel, the Times reported. Pentagon investigators have said up to $11.5 million in bribes were paid to help win the contracts for the companies, the newspaper said. A Defense Department spokesman declined to comment. An Orascom official said the company was unaware of the memo while Faisal al-Ayyar, chairman of Kuwait-based National Mobile Telecom which heads the AsiaCell consortium, said his company had not been informed either. The three consortia, led by foreign firms, won cell phone licenses in Iraq in October and were given two years to build up their regional networks. Read Full Post
Posted June 25th 2004 | 0 comments

The FBI is conducting a preliminary inquiry into whether a businessman linked to Saddam Hussein's regime bribed U.S. and Iraqi officials to fix bids for Iraqi cell-phone contracts worth hundreds of millions of dollars, U.S. officials said.

The inquiry, referred to the FBI by the Pentagon inspector general earlier this month, focuses on Nadhmi Auchi, an Iraqi-born Briton who is suspected of orchestrating the cell-phone scheme to benefit three companies with which he is affiliated or owns, said the officials, who spoke on the condition of anonymity.

"Significant and credible evidence was developed that a conspiracy was organized by Nadhmi Auchi to offer bribes to 'fix' the awarding of cellular-licensing contracts covering three geographic areas of Iraq," a Pentagon report said.

The report by the Pentagon's International Armament and Technology Trade Directorate identifies cash payments made to two Iraqi officials, two British contractors and two Americans, totaling as much as $11.5 million. The contracts are worth an estimated $500 million annually.

It describes Auchi as a billionaire who has "served as Saddam Hussein's principle international financial manipulator and bag man" and says he was involved in European arms sales to Iraq for more than two decades. Auchi was convicted in November by a French court in an illegal oil company payment scheme. He received a 15-month suspended sentence and was ordered to pay a $2.4 million fine. Read Full Post | Read Original News
Posted June 17th 2004 | 0 comments