A judge for the US District Court for the Southern District of New York [official website] on Wednesday dismissed [opinion, PDF] an Iraqi government lawsuit accusing numerous business entities of conspiring with Saddam Hussein [JURIST news archive] to disrupt the UN Oil-for-Food Program [official website; JURIST news archive], thereby denying Iraqi citizens access to approximately $10 billion of essential aid. US District Judge Sidney Stein said the government of Iraq could not recover damages under a US anti-racketeering law because "the scheme described by Iraq is primarily foreign, focused on a multinational organization, engineered by a foreign government, and concerned with Iraqi oil, goods, and contracts." In addition, the court held that "the Republic of Iraq bears responsibility in this action for the Hussein Regime's corruption of the [Program]," rejecting Iraq's attempt to "sidestep responsibility because the conduct was illegal or the actors held power illegitimately." Iraq brought the claim in 2008, accusing more than 90 companies, subsidiaries and affiliates of responsibility for the program's corruption.
The oil-for-food program was established in 1996 by the UN, allowing Iraq to sell oil in order to finance the purchase of food, medicine and other goods for those citizens hurt by international trade sanctions [JURIST report] in the wake of the first Gulf War. Since its inception, several companies and individuals involved with the program have been accused of corruption. In July 2010 General Electric Co. (GE) [corporate website] agreed to a $23.5 million settlement after the US Securities and Exchange Commission (SEC) filed a complaint accusing GE of bribing Iraqi officials [JURIST report] to receive contracts under the oil-for-food program. That April a Paris judge charged [JURIST report] French oil company Total [corporate website] with bribery and complicity in connection with the program. According to the 2005 Volcker report, published by a UN-appointed Independent Inquiry Committee [official website] investigating corruption in the oil-for-food program, oil companies like Total allegedly paid Iraqi officials over $1.5 billion in illegal kickbacks [materials] in exchange for being selected as oil purchasers. Additionally, oil company Chevron [corporate website] also paid a large settlement to the SEC concerning misuse of the program, and two Texan oil barons, David Chalmers and Oscar Wyatt Jr. [JURIST reports], were sentenced to prison for their roles in the scandal. In 2005, Grundfos, a Danish company that produces industrial pumps, admitted [JURIST report] that two employees paid kickbacks to authorities in Saddam Hussein's government under the oil-for-food program.