In 2006, the Australian judge who presided over a royal commission into that country’s role in the United Nations oil-for-food affair recommended that Norman Davidson Kelly be investigated by police. No charges were ever filed.
“On the evidence before me, Mr. Davidson Kelly is a thoroughly disreputable man with no commercial morality,” Commissioner Terence Cole wrote in his report, which was tabled in the Australian parliament.
The commissioner noted that Davidson Kelly, a British national, declined to give evidence or provide a statement to the inquiry.
Fast forward seven years, and Davidson Kelly is now chairman of the board of Shoal Point Energy.
The junior oil and gas firm has gobbled up exploration licences stretching along a vast tract of Newfoundland’s west coast. Today, Davidson Kelly is defending his role in the Iraq oil-for-food affair, saying the judge got it wrong.
He says all transactions and payments were carefully cleared by lawyers to make sure they complied with Australian law, and the law applying to the United Nations.
And he reiterates that no charges were ever laid in connection with his actions.
Oil-for-food program meant to help Iraqi people
The United Nations oil-for-food program started with the best of intentions.
In the early to mid-1990s, there were UN sanctions in effect over trade with Saddam Hussein’s dictatorship in Iraq.
The oil-for-food program was a way to ensure the people of Iraq did not go hungry.
It permitted Saddam Hussein's government to sell oil, through the UN, and get shipments of much-needed food and medicine in return.
But the program was later found to be rife with corruption.
According to a UN-backed report released in late 2005, more than 2,200 companies involved in the program paid $1.8 billion in illicit surcharges and kickbacks to Saddam Hussein's government.
People and firms in 66 different countries made such payments, according to the report by former U.S. Federal Reserve chairman Paul Volcker.
One of those countries was Australia.
The Australian Wheat Board was found to have paid hundreds of millions in kickbacks to the Iraqi regime.
To find out what happened, the Australian government set up a royal commission. The Cole Inquiry issued its report in late 2006.
Commissioner Terence Cole was harshly critical of Davidson Kelly’s dealings in Iraq.
In the mid-1990s, Davidson Kelly worked with oil company BHP Petroleum.
In 1995, shortly before the UN's oil-for-food program came into effect, BHP sent a shipment of Australian wheat to Iraq as a gift, the commissioner found. At the time, trade with Iraq was restricted by sanctions.
Davidson Kelly later left BHP, and became president of a Gibraltar-based firm called Tigris Petroleum.
He subsequently lobbied the Iraqis for cash for that shipment of wheat. He persuaded the Australian Wheat Board (AWB) to help him.
They did, inflating the value of other contracts under the UN oil-for-food program.
The Australian Wheat Board took a cut — at least half a million dollars.
The Cole Inquiry found that Davidson Kelly, or his family, got $7.1 million US.
“He evolved the scheme to recover the ‘debt’ by ‘loading up’ the price of wheat to be recovered from the escrow account by AWB under contracts A1670 and A1680,” the commissioner wrote in his final report.
“He agreed upon this mechanism to deceive the United Nations with the Iraqis and AWB. Money set aside for humanitarian purposes for Iraqis was thus used to enrich Mr. Davidson Kelly and his family, through Tigris.”
‘Personal criticisms very wounding’
Davidson Kelly declined to co-operate with the inquiry, and says he has never spoken publicly about the affair.
He would not consent to being taped for broadcast, but did conduct a 20-minute telephone interview with CBC News.
Davidson Kelly believes he was unfairly criticized by the commissioner.
“He draws certain conclusions from some of the material he examined, which we did not share, and do not share,” he said. “And certainly the personal criticisms were very wounding. But he made them, and he was entitled to say what he wished.”
He defends the decision not to go to Australia to answer questions, calling the inquiry a “non-judicial process” that “thrives on high-oxygen publicity.”
As for the commissioner’s conclusion that the BHP shipment of wheat to Iraq was a gift, Davidson Kelly says he is wrong.
“The transaction was always that the payment was going to be reimbursed. And that was understood by all parties involved.”
He denies that the $7.1 million US that flowed to Tigris Petroleum properly belonged to the Iraqi people, as the Cole Inquiry concluded. “We formed a different view,” Davidson Kelly said.
And he is mum about where those millions went.
“I can’t comment on that,” he said.
Why not?
“I’m sorry, I can’t comment on that.”
Now chairman of Shoal Point Energy
Davidson Kelly is currently chairman of the board of directors for Shoal Point Energy. According to securities filings, he holds 3.5 million shares of the company.
Shoal Point Energy had nothing to do with any of the events that transpired in Iraq a decade ago.
Davidson Kelly joined the company three years ago, when some Canadian colleagues told him he might be interested in the western Newfoundland oil play. He says he’s involved with a Houston company that’s been at the forefront of analyzing shale potential.
Shoal Point Energy has picked up exploration rights to a big chunk of land off Newfoundland’s west coast.
Earlier this year, the firm reached a deal with another company, Black Spruce Exploration, to carry out a fracking program.
Hydraulic fracturing involves injecting chemicals and water into shale rock, to extract oil and gas.
The plans have been controversial, with hundreds turning out at public meetings to question proponents.
And last month, Shoal Point Energy raised eyebrows when it issued a news release saying it had the green light from the local offshore regulator to start drilling a new well.
That was news to the Canada-Newfoundland and Labrador Offshore Petroleum Board.
Shoal Point Energy had to issue a retraction later the same day acknowledging the error.
No approval has yet been granted.
The fracking plans have also attracted the attention of UNESCO.
The United Nations agency says the drilling may threaten Gros Morne National Park’s status as a world heritage site.
But Shoal Point Energy has worked to assuage the concerns.
“Shoal Point Energy Ltd. conducts business with integrity and a strong focus on achieving the highest performance and ethical standards,” the company noted in a corporate presentation posted on its website last month.
Original Article
Source: CBC
Author: Rob Antle
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