NEW YORK -(Dow Jones)- Jury selection began Wednesday in the trial of Texas oil man Oscar S. Wyatt Jr. on charges he participated in a scheme to pay secret kickbacks to the Iraqi government in exchange for oil under the United Nations' scandal-ridden oil-for-food program.
The trial of Wyatt, former chairman of Coastal Corp., is expected to last four to six weeks. Coastal Corp. was acquired by El Paso Corp. (EP) in 2001.
"Jury service is one of the most important duties of citizens," said U.S. District Judge Denny Chin, who is presiding, to the jury pool as jury selection began Wednesday. "We are grateful for all of you being here."
Jury selection kicked off Wednesday morning with the judge questioning an initial group of 40 potential jurors about their backgrounds, if they were aware of the UN's oil-for-food program and if they felt they could serve impartially.
Opening statements could begin as soon as Thursday or Monday depending upon how quickly a panel is selected.
Prosecutors have alleged that Wyatt and others, from December 2000 to March 2003, caused millions of dollars of illegal surcharges to be paid to Iraq's government in exchange for oil purchased on behalf of Coastal Corp. and two Cyprus companies.
However, Wyatt has claimed in court papers that he was singled out for prosecution because of his "outspoken opposition to government policy towards Iraq," including the past two Iraq wars, a trade embargo against Iraq and the administrations of President George W. Bush and his father.
"I believe that we have a particularly strong defense," said Gerald L. Shargel, Wyatt's lawyer. "The details of that defense will be revealed in my opening."
Wyatt has been charged with conspiracy, wire fraud, engaging in prohibited financial transactions with Iraq and two counts of violating the International Emergency Economic Powers Act. He faces up to 74 years in prison on the charges.
Eight people have either pleaded guilty or been convicted of criminal charges in the case. Criminal charges are pending against six other individuals, including the program's former executive director, Benon V. Sevan.
Last month, David B. Chalmers, the sole shareholder of Houston oil company Bayoil (USA) Inc., and Ludmil Dionissiev separately pleaded guilty to criminal charges in the case.
In February, El Paso Corp. agreed to pay $7.7 million to settle civil and criminal charges that it indirectly paid $5.5 million in illegal surcharges to Iraq through purchases of crude oil from outside parties under the oil-for-food program.
Last week, another oil company, Textron Inc. (TXT), agreed to pay $4.7 million to settle criminal and civil charges in the matter.
Notice they're all TEXAS OIL CO.'s ? Bush 'n Co. -- do you think we're all REALLY that STUPID?
The oil-for-food program was designed to allow the government of Iraq, which was facing international sanctions, to sell oil in exchange for food, medical supplies and other humanitarian needs.
An independent investigation headed by former Federal Reserve Chairman Paul A. Volcker in 2005 found that Saddam Hussein's government was allowed to pocket billions of dollars by manipulating the program, and kickbacks were paid to U.N. officials. The program began in 1996 and ended in 2003.
-By Chad Bray, Dow Jones Newswires; 212-227-2017; chad.bray@dowjones.com
(END) Dow Jones Newswires
09-05-07 1218ET
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