Oilman gets year in prison for role in oil-for-food program

Wednesday, November 28, 2007
Oscar S. Wyatt Jr., center, 83, founder and former chairman of Coastal Corp. arrives at Manhattan federal court to be sentenced for his part in a United Nations oil-for-food corruption case Tuesday, Nov. 27, 2007 in New York. (AP Photo/Mary Altaffer)

NEW YORK -- Texas oilman Oscar Wyatt Jr. was sentenced to a year in prison Tuesday for his role in corrupting the U.N. oil-for-food program, winning leniency from a judge who cited his military service during World War II and his many good deeds during his lifetime.

Wyatt, 83, cried as he addressed the court, saying he "would never do anything to hurt my country."

Moments later, U.S. District Judge Denny Chin imposed a sentence below the year and a half to two years in prison to which Wyatt had agreed when he pleaded guilty to conspiracy last month. Wyatt also agreed to forfeit $11 million.

"It's very, very difficult for me to express anything but appreciation to the judge for his fairness," Wyatt said after his sentencing.

The judge's reasons for leniency included Wyatt's age and the many heartfelt letters sent to the court on his behalf, including notes from members of Congress, police chiefs, mayors, even actress Farrah Fawcett.

But Chin noted: "There's little doubt in my mind that he broke the law."

Before pleading guilty on the 12th day of his trial and conceding that he approved a $200,000 illegal payment directly to an Iraqi bank account in December 2001, Wyatt had insisted he never paid an illegal surcharge to the Iraqi government to win oil contracts.

The judge said evidence showed Wyatt had paid at least $8 million to Iraqi officials to get an unfair share of contracts connected to the U.N. oil-for-food program, which ran from 1996 to 2003.

The program permitted the Iraqi government to sell oil primarily to buy food and medicine for its suffering citizens. It was meant to help Iraqis cope with U.N. sanctions, but authorities said the program was corrupted when Iraqi officials began demanding illegal surcharges in return for contracts to buy Iraqi oil.

At trial, the government introduced evidence that Wyatt used an energy company he founded, Coastal Corp., to buy crude oil from Iraq in the decades leading up to the 1990 invasion of Kuwait.

After the invasion, Wyatt maintained a close relationship with Iraqi leader Saddam Hussein to guarantee his continued access to Iraqi oil, prosecutors said.

Prosecutors had argued against leniency for Wyatt, criticizing his "breathtakingly immoral" actions. The government claimed Wyatt was in a unique position to dissuade Iraq from corrupting the scheme.

The judge said "big oil companies may have gotten off easy" with their own surcharge payments for Iraqi oil, but he believed politics and vendettas played no role in the prosecution of Wyatt.

Wyatt's lawyer, Gerald Shargel, had described his client as an American hero, a self-made businessman who built a successful oil company and helped thousands of people before making "a very, very, very, very regrettable mistake in judgment."

Shargel said blame for the corrupt oil-for-food-program "can't be placed solely at the door of Mr. Wyatt."

Assistant federal prosecutor Edward O'Callaghan responded by saying Wyatt went to Baghdad in January 2001 and suggested to officials there how they could have a "surcharge scheme without it being obvious." The prosecutor said Wyatt kept pushing for more oil until February 2003, a month before the U.S. invaded Iraq.

In explaining his lenient sentence, Chin outlined Wyatt's hardworking life, noting that he was picking cotton in rural Texas at age 12 and flying crop-dusting planes by age 15.

In World War II, Wyatt flew dozens of bomber missions for the United States, and his plane was shot down twice, the judge said.

Chin cited "amazing letters" written to him on Wyatt's behalf. His supporters included Roger B. Smith, retired chairman of General Motors, and Fawcett, who wrote that Wyatt helped her father get oil contracts when she was a girl in Corpus Christi, Texas.

Chin said he was most struck by letters from average Americans who cited acts of kindness as simple as a hug to a restaurant worker whose spouse had died.

When Wyatt rescued American hostages from Iraq just before the first Gulf War, he not only personally went to Iraq but paid for family members to meet the plane, the judge said.

In addressing the court, Wyatt said he could not remain silent when he believed his country was doing something wrong and was eager to make sure it got credit when it did right.

Chin later said those comments suggested one reason for Wyatt's actions, that his "opinions about Iraq caused him to skirt too close to the line."

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