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Oilman Wyatt loses bid to dismiss Iraq bribe charges

Oscar Wyatt Jr., the Texas oilman and Coastal Corp. founder, lost a bid for dismissal of charges he bribed Saddam Hussein's Iraqi regime in exchange for millions of barrels of oil.

US District Judge Denny Chin said there was no credible evidence to support Wyatt's claim he is being prosecuted because he opposed US policy toward Iraq in the 1990s. There is no proof that „Wyatt's prosecution was brought on to punish him or retaliate against him for his views,” Chin wrote in a ruling yesterday. Wyatt's case stems from the scandal that grew out of the United Nations oil-for-food relief effort. The program, created to blunt the impact on civilians of sanctions over Iraq's 1990 invasion of Kuwait, used Iraqi oil revenue to pay for food and medicine. More than 2,200 companies paid almost $1.8 billion in bribes to win oil contracts under the program, according to a 2005 inquiry led by former US Federal Reserve Chairman Paul Volcker. Federal prosecutors in New York indicted five companies and 10 individuals, including Wyatt, who pleaded not guilty. „We made arguments that we strongly believed were right,” defense attorney Gerald Shargel said in an interview. „Now's the time to focus on the trial.” The trial is scheduled for April 26. Other defendants in the case include oilman David Chalmers, owner of Houston-based Bayoil (USA) Inc., and oil trader John Irving.

Shargel argued in court papers that Wyatt is being prosecuted because he „developed strong relationships with the Hussein regime.” Wyatt, for instance, urged the US not to join the international military coalition formed in 1990 after Iraq invaded Kuwait. Chin yesterday also denied Wyatt's bid for a separate trial from other defendants charged in the case. Wyatt started Coastal with an $800 loan and sold it to El Paso Corp. in 2001 for $24 billion. Houston-based El Paso owns the largest US network of natural-gas pipelines. In a related proceeding this afternoon, Chin sentenced South Korean businessman Tongsun Park to five years in prison for acting as an unregistered agent for Hussein in the 1990s. Park was convicted of conspiracy in July. The case is US v. Chalmers, 05-CR-59, Southern District of New York. (Bloomberg)