World and Nation

Texas Oilman Admits to Cheating U.N.’s Iraq Oil-For-Food Program

Oscar S. Wyatt Jr., the Texas oilman accused of cheating the U.N.’s oil-for-food program, pleaded guilty Monday to paying hundreds of thousands of dollars in illegal kickbacks to Saddam Hussein’s government in 2001 to gain access to lucrative Iraqi oil contracts.

Wyatt’s surprise plea came on the 14th day of his trial in U.S. District Court in Manhattan, before federal prosecutors finished presenting their case. Under an agreement with the government, he admitted guilt on one count of conspiracy to commit wire fraud and is most likely to be sentenced to 18 to 24 months in prison rather than the 70 years he might have faced if convicted on all five counts of the indictment.

Wyatt, a former drill-bit salesman who rose to prominence in the Texas oil business, had proclaimed his innocence almost from the moment he was arrested two years ago at his home in the exclusive River Oaks section of Houston. After rising before Judge Denny Chin to admit his guilt, Wyatt, a plain-spoken octogenarian, embraced his wife, Lynn, a doyenne of the Houston social scene known for her philanthropic work and taste for haute couture.

“I didn’t want to waste any more time at 83 years old fooling with this operation,” he told reporters in the courtroom. “The quicker I got it over with the better.”

Wyatt’s lawyer, Gerald L. Shargel, said the government had offered the deal, under which four of the five original charges were dropped in exchange for a guilty plea. Those included conducting financial transactions with Iraq, an enemy nation at the time, and violating a U.S. embargo on that country.

“The defense of a criminal case is complicated when the client is 83 years old,” Shargel said. “That was certainly taken into account. For the government to have offered this disposition at this point suggests both sides recognized the risks involved in having a jury decide it.”

Michael J. Garcia, the U.S. attorney in Manhattan, issued a statement within two hours of the plea that said, “When Oscar Wyatt agreed to defraud the oil-for-food program by making illegal payments to the Hussein regime, he traded the humanitarian needs of the Iraqi people for the satisfaction of his own greed and the greed of the former government of Iraq.”

Garcia’s office, which led the criminal investigation into the troubled program, has so far extracted guilty pleas from five other defendants and won conviction of one more. Some $16.5 million in illicit profits have been seized, money that officials plan to transfer to the Development Fund of Iraq.

Under the oil-for-food program, established in 1996, Iraq was allowed to sell its oil despite sanctions imposed after its invasion of Kuwait. But all profits from the sales were to have been used for food, medicine or any goods needed to sustain the Iraqi population.

As part of his plea, Wyatt admitted that he paid $200,000 in illegal kickbacks to Iraq in December 2001, funneled through a bank account in Jordan. He also admitted that he never told U.N. officials of the secret deal, a violation of the oil-for-food program’s rules. He is free on bail until his sentencing, scheduled for Nov. 27.