Wyatt, 83, is accused of funneling millions of dollars in illegal surcharges or kickbacks to Saddam Hussein's regime under the United Nations' oil-for-food program. Charged with fraud, conspiracy and violating U.S. sanctions, Wyatt could be sentenced to 74 years in prison if convicted on all counts. Wyatt contends all his dealings with the Iraqis were lawful.
Mubdir Al-Khudhair, a former manager with Iraq's State Oil Marketing Organization, is the first witness since the trial started early this month whose testimony has tied Wyatt to surcharges.
Al-Khudhair told the jury he was in a meeting in January 2001 where Wyatt was negotiating the purchase of some Iraqi crude and expressed "his willingness to pay the surcharge."
But Wyatt refused to pay the 40-cent charge Iraqi officials were demanding at the time.
"He said that the amount of 40 cents at that time was too high but that Coastal would be willing to pay between 20 to 25 cents per barrel," Al-Khudhair said.
Wyatt founded Coastal Corp., which was purchased by Houston-based El Paso Corp. in January 2001.
Prosecutors allege Wyatt used Cyprus-based entities Mednafta and Nafta Petroleum as front companies to buy Iraqi crude and pay the illicit surcharges.
Al-Khudhair said Wyatt, in a January 2001 meeting at SOMO's offices in Baghdad, said he was going to establish Cypriot companies "to replace Coastal" and to "purchase Iraqi crude oil and pay the surcharge." Whether this was the same meeting where the 40-cent surcharge was allegedly discussed was not immediately clear.
Wyatt's lawyers do not dispute that Mednafta and Nafta Petroleum paid surcharges to Saddam's regime. They argue, however, that Wyatt had a paternalistic relationship toward Mednafta or Nafta Petroleum but had no ownership stake in those entities.
Wyatt also is charged with providing a satellite phone to the Iraqi oil company, in violation of the U.S. sanctions governing dealings with Saddam's regime.
Al-Khudhair testified that he and other oil company officials used a satellite phone system that had been supplied by Wyatt. That phone, Al-Khudhair said, was referred to as "the Coastal or Oscar Wyatt phone."
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