Texas tycoon pleads not guilty in Iraq oil probe
NEW YORK (Reuters) - Texas oil tycoon and former Coastal Corp. Chairman Oscar Wyatt pleaded not guilty on Thursday to charges he paid millions in secret kickbacks to Iraq in the United Nations oil-for-food program.
Wyatt, who had long ties to the government of former Iraqi President Saddam Hussein, was arraigned by coincidence on the same day former Federal Reserve Chairman Paul Volcker issued his final report on the $64 billion scandal, detailing a scheme of kickbacks and surcharges.
Wyatt, his arm in a sling, was told by federal judge Denny Chin he must obtain special permission to travel outside the United States while he remains free on bail.
He had been arrested in Houston on Oct. 21, the day prosecutors announced charges against him and two Swiss business executive who remain at large.
Two previously indicted defendants also pleaded not guilty: David Chalmers, of Houston-based Bayoil Inc., and Ludmil Dionissiev, a Bulgarian oil trader living in Houston.
A lawyer representing Bayoil Inc and Bayoil Supply & Trading Ltd, also pleaded not guilty for the firms.
Defense lawyers said they planned to subpoena the United Nations and other agencies, including the CIA and the Pentagon, to hand over any documents.
"This is a questionable prosecution," Wyatt's lawyer Richard Hibey told reporters. Wyatt declined comment.
The judge set a trial date of June 20.
The program was aimed at easing the impact of U.N. sanctions imposed in 1990 after Saddam's troops invaded Kuwait. It allowed Iraq to sell oil in order to pay for food, medicine and other civilian goods.
The Volcker report faulted the program for allowing Saddam to choose his own customers and the amount of oil he would sell them. That led to Iraq demanding and getting kickbacks
Wyatt became the first person who agreed to buy oil and arrange to move it through his company, the Volcker report said. After that major world oil companies followed suit.
Prosecutors allege Wyatt directed millions of dollars in illegal kickbacks to Saddam's government by depositing cash into a Jordanian bank account.
In December 1990, just before the Gulf War, Wyatt met Saddam and other senior Iraqi officials to secure the release of 32 American hostages who were subsequently flown back to the United States in a Coastal-chartered jet.
Copyright © 2008 Reuters
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