[Guest post by DRJ]

UPDATE: Don Surber explains why this is a Democratic story.

This earlier post discussed the trial of Oscar Wyatt, Jr., that started 3 weeks ago in New York federal court. Wyatt agreed today to plead guilty to one count of conspiracy to commit wire fraud.

From the Houston Chronicle:

“Houston oilman Oscar Wyatt pleaded guilty today to one count of conspiracy to commit wire fraud, abruptly ending his three-week trial on charges he paid millions of dollars illegally to Saddam Hussein’s regime so he could purchase Iraqi crude under the United Nations oil-for-food program.

“I didn’t want to waste any more time at 83 years old fooling with this operation,” Wyatt said after pleading guilty this morning in a Manhattan federal court. “The quicker I get it over with the better.”

While Wyatt could be sentenced to as much as 20 years in prison for the single count, federal sentencing guidelines call for a sentence of 18 to 24 months. U.S. District Judge Denny Chin set sentencing for Nov. 27.

As part of his plea agreement, Wyatt also will forfeit more than $11 million.“

Wyatt entered his guilty plea as the prosecution was about to wrap up its case. The defense indicated it did not plan to call any witnesses and wanted to avoid the potential 74-year sentence that might result from conviction on all 5 counts. Wyatt admitted that “in December 2001 he caused about $200,000 to be deposited into a bank account in Jordan controlled by Iraq’s State Oil Marketing Organization.”

The nature of the charges were technical and described as mind-numbing for the jurors:

“The main charges against Wyatt stemmed from 2000 to early 2003, when Iraq was the target of international sanctions imposed after Saddam’s 1990 invasion of Kuwait. The U.N. had created the oil-for-food program in 1996 to allow Iraq to resume export of oil and generate cash to purchase food and medicine for a needy Iraqi populace.

The program was designed to ensure Saddam’s regime could not seize the proceeds of those oil sales. But by September 2000, Baghdad had devised a scheme to assess its customers illicit surcharges that eventually ranged from 10 cents to 50 cents a barrel.

Prosecutors had alleged Wyatt used a series of front companies, including Cyprus-based Nafta Petroleum Co. and Mednafta Trading Co., to buy Iraqi oil under the oil-for-food program and then pay the surcharges demanded into a bank account in Jordan secretly controlled by the Iraqi government.

To try to prove their allegations, prosecutors had bombarded jurors with internal Iraqi oil company documents, bank statements, a computer database and alleged correspondence between Wyatt and Iraqi officials. At one point, [Judge] Chin warned the prosecution jurors were becoming “numb” from reading all the documents. Indeed, some jurors reacted with visible dismay early in the trial, when they were handed large black binders containing all the documents being entered as evidence.”

The evidence also included testimony from former officials with Iraq’s State Oil Marketing Organization (SOMO), including:

“Mubdir Al-Khudhair, a former manager with Iraq’s State Oil Marketing Organization, or SOMO, told a federal jury in Manhattan that he attended a meeting in January 2001 where Wyatt was haggling with Iraqi officials over how much of a surcharge he would be willing to pay.

While Wyatt had expressed “his willingness to pay the surcharge,” he objected to the 40-cent-per-barrel fee Iraqi officials were demanding, Al-Khudhair said.”

Wyatt’s defense team questioned this testimony with a letter that indicated Wyatt had no ownership interest in the company that paid the surcharge:

“Wyatt’s defense attorneys don’t dispute that those companies may have paid surcharges, but they contend Wyatt did not control those companies. On Monday, Al-Khudhair conceded he did not really know who owned Nafta or Mednafta.

And on Tuesday, the defense displayed a letter Wyatt had sent to Iraq’s then Deputy Prime Minister Tariq Aziz in March 1999 — more than a year before Saddam’s government began trying to collect the illegal surcharges. In the letter, Wyatt proposed Iraq cancel an existing contract with Coastal and, instead, sell oil to Nafta Petroleum. “This is a company in which Coastal owns no stock,” Wyatt told Aziz. “We have had a business relationship with them for over 30 years.”

However, a second SOMO witness testified to similar transactions:

“Yacoub Y. Yacoub, a finance official with Iraq’s State Oil Marketing Organization or SOMO, was the second former SOMO official to testify for the prosecution. He told the federal court jury in Manhattan that he attended a meeting with Wyatt in SOMO’s offices in Baghdad in late 2000 or the beginning of 2001.

At that meeting, Yacoub testified, SOMO officials were complaining about back surcharge payments they said were owed by both Coastal Corp., the Houston firm Wyatt founded, and by Nafta Petroleum. Prosecutors allege Cyprus-based Nafta Petroleum was a front company Wyatt secretly controlled and used to pay illegal surcharges. The defense contends Wyatt did not own or control the Cyprus entity.”

In exchange for his testimony, Yacoub “was allowed to relocate his family to the United States from Iraq and was given more than $150,000 for relocation costs.”

Yacoub was described as “poised and matter-of-fact” during direct examination by the prosecutors, but “faltered under aggressive cross-examination, blurting out: ‘I really do not remember details.'”

It seems the guilty plea benefited both the prosecution and defense, since each might have reasonably believed a jury verdict could go either way.

— DRJ