NEW YORK - Two Texas oilmen pleaded not guilty Monday to charges of paying millions of dollars in kickbacks to Saddam Hussein's regime out of money from the UN oil-for-food programme.
David Chalmers and Bulgarian national Ludmil Dionissiev had been arrested in Texas on Thursday in connection with the alleged scheme. The two men entered their pleas in federal court in New York.
Their attorney, Bart Dalton, told reporters that Chalmers and Dionissiev had pleaded not guilty "for the best reason possible, because they are not guilty."
"We fully expect them to be exonerated," Dalton said.
Chalmers is the sole shareholder of Houston-based Bayoil (USA) Inc. Dionissiev is an oil trader with permanent US residency.
US authorities are seeking to extradite from Britain a third man charged in the scheme, British oil trader John Irving.
If convicted, the three could each face a maximum 62 years in prison.
Oil-for-food was the largest aid programme in UN history, overseeing 64 billion dollars in deals beginning in 1996. The United Nations supervised Iraqi oil sales and the purchase of humanitarian supplies with the revenues.
Under the programme, the Iraqi government had the power to select the companies and individuals who received the rights to purchase Iraqi oil.
Those selected were able to reap large profits by selling their allocations of Iraqi oil to brokers or companies capable of transporting the oil to a refinery.
Allocation of the purchase rights was conditional, according to the indictment against the three oil traders, on payment of a secret surcharge to be paid into bank accounts under the control of the Iraqi government.
Chalmers and his associates engaged in the surcharge scheme through two companies, Bayoil Inc. and Bayoil Supply and Trading, prosecutors said.
In order to hide the rise in price for Iraqi oil occasioned by the illicit surcharges, the defendants allegedly conspired with Iraqi officials to deflate the official selling price of Iraqi oil.
Dalton said that Bayoil was in the "legitimate business of oil trading."

04/18/2005 16:43 GMT