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Published: Wednesday, 4/20/2005

The scandal that won't quit

THE focus in the Iraq oil-for-food scandal has shifted from New York to Texas with the arrest and indictment of David Bay Chalmers, Jr., head of Houston-based Bayoil U.S.A., Inc.

Mr. Chalmers was charged along with Bulgarian oil trader Ludmil Dionissiev by the U.S. Attorney for the Southern District of New York. The accusations included paying millions of dollars in kickbacks in connection with the $65 billion United Nations program. Oil-for-food was set up to try to spare ordinary Iraqis the pain of the U.N. sanctions against Iraq.

The Texas oil executive is charged with making extraordinary payments to get Iraqi oil; artificially lowering the price paid to the Iraqis, thus defeating the purpose of the program, and being involved in payoffs to U.N. officials. Bayoil is the first U.S. firm to be charged. It has business connections to Coral Petroleum, Inc., another Houston-based firm.

Another oil-for-food indictment was issued the same day against South Korean lobbyist Tongsun Park, who became famous in 1977 when he was charged with bribing as many as 100 U.S. congressmen on behalf of South Korean interests. He testified freely before the House Committee on Standards of Official Conduct and, in return, the charges against him were dropped.

Only one legislator, Rep. Richard T. Hanna, a Democrat from California, was convicted and imprisoned in the affair. Mr. Park, who is in South Korea, was charged this time with making payoffs to U.N. officials in the Iraq oil-for-food affair.

There is no indication so far that either Bush Administration figures or any members of Congress are implicated in Bayoil's or Tongsun Park's involvement in the oil-for-food scandal.

Given the active role of U.S. oil traders in deals worldwide, including those involving Iraqi oil, oil-for-food indictments were probably inevitable.

The aggressive pursuit of corruption cases in the past by U.S. attorneys in New York suggests that they will follow all leads, as they should.

And that should hold true even if they lead from New York to Houston to Washington.



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