from The New York Times
By CLAUDIO GATTI and JAD MOUAWAD

Chevron, the second-largest American oil company, is preparing to acknowledge that it should have known kickbacks were being paid to Saddam Hussein on oil it bought from Iraq as part of a defunct United Nations program, according to investigators.

The admission is part of a settlement being negotiated with United States prosecutors and includes fines totaling $25 million to $30 million, according to the investigators, who declined to be identified because the settlement was not yet public.

The penalty, which is still being negotiated, would be the largest so far in the United States in connection with investigations of companies involved in the oil-for-food scandal.

The $64 billion program was set up in 1996 by the Security Council to help ease the effects of United Nations sanctions on Iraqi civilians after the first gulf war. Until the American invasion in 2003, the program allowed Saddam’s government to export oil to pay for food, medicine and humanitarian goods.

Using an elaborate system of secret surcharges and extra fees, however, the Iraqi regime received at least $1.8 billion in kickbacks from companies in the program, according to an investigation completed in 2005 by Paul A. Volcker, the former chairman of the Federal Reserve.

By imposing surcharges on the sale of crude oil, the Iraqi regime skimmed about $228 million from its oil exports.

A report released in 2004 by an investigator at the Central Intelligence Agency listed five American companies that bought oil through the program: the Coastal Corporation, a subsidiary of El Paso; Chevron; Texaco; BayOil; and Mobil, now part of Exxon Mobil. The companies have denied any wrongdoing and said they were cooperating with the investigations.

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