The legendary Texas oilman whose playboy son triggered the Duchess of York’s divorce went on trial in New York yesterday charged with sanctions-busting for Saddam Hussein, the former Iraqi President.

Oscar Wyatt, a rags-to-riches tycoon, whose son, Steve, was photographed on holiday with the duchess in Morocco and the South of France while Prince Andrew was away at sea, is accused of paying millions of dollars in kickbacks in oil deals with Iraq in violation of UN sanctions. He denies the charges.

The month-long trial, stemming from the UN Oil-For-Food scandal, will shine a spotlight on Mr Wyatt’s links to Saddam dating back to the early 1970s and his efforts to prevent the American attacks of 1991 and 2003.

Prosecutors plan to introduce a January 2003 diary entry by an Iraqi oil official that suggests Mr Wyatt tried to tip off the Baghdad Government about US troop strengths and the timing of the US attack.

“Oscar Wyatt’s years of assistance to the Hussein regime earned him a privileged status in Iraq,” Stephen Miller, the lead prosecutor, said.

The defence is seeking to focus the case on the unpopular war in Iraq. Gerald Shargel, Mr Wyatt’s lawyer, insisted that the oilman was an American patriot who was a friend and adviser to presidents Kennedy, Johnson, Nixon, Reagan and Clinton, but got on badly with the two presidents Bush. “This case is about the United States at its hypocritical worst,” he said.

The criminal charges represent the greatest challenge in Mr Wyatt’s colourful career, which has taken him from crop-duster pilot to billionaire tycoon married to a fashion icon atop the Houston social scene.

After serving as a bomber pilot in the Pacific in the Second World War Mr Wyatt founded Coastal Corp selling oil drill bits out of the boot of his car and built the company into a leading oil-trading concern that he sold in 2000 for $17 billion. He began buying Iraqi crude soon after the country’s oil industry was nationalised and became the first American to import Iraqi oil in 1972.

After Iraq’s 1990 invasion of Kuwait he used his ties to Saddam to travel to Baghdad to free 21 American hostages being held by Iraq.

Mr Wyatt was Iraq’s first customer under the UN’s Oil-For-Food programme, set up in 1996 to enable the country to sell limited amounts of crude to buy humanitarian supplies despite the UN trade embargo.

Though a gruff figure, Mr Wyatt married the glamorous daughter of the founders of Houston’s up-market Sakowitz department store. His wife, Lynn, became a jetsetting socialite famed for her celebrity-studded annual birthday party in Cap Ferrat, on the French Riviera, and doyenne of the Houston social scene.

Though she cancelled the Cap Ferrat lease this year because of the trial, Mrs Wyatt attended the London revival of Joseph and the Technicolor Dream-coat as a guest of Lord Lloyd-Webber and celebrated her birthday at a black-tie party at the Windsor estate of Sir Elton John.

The Wyatts’ son, Steve, caused a furore in Britain in 1992 when photographs of him on holiday with the Duchess of York and her daughters were found by a housekeeper in a flat he once rented in Eaton Square, London. Steve Wyatt denied any romantic relationship. But within weeks, the royal couple had announced their separation. The duchess was later photographed having her toes sucked by Steve Wyatt’s friend and distant cousin, John Bryan.

The elder Mr Wyatt, now 83, could spend the rest of his life behind bars if convicted by the seven-woman, five-man jury of paying illegal kickbacks to Iraq.

Coastal Corp purchased 50 million barrels of Iraqi oil during the first four years of the UN Oil-For-Food programme. But in 2000 Saddam decided to demand an illicit surcharge.

Prosecutors allege that Mr Wyatt, using two Cyprus-based trading companies, managed through Switzerland, paid about $4 million in kickbacks to Iraq from mid-2000 until the US invasion in 2003.

A diary entry made by an Iraqi oil official after meeting Mr Wyatt in Baghdad in January 2003 suggests that the oilman tried to tip off the Iraqi Government about US plans. “The current schedule is that the bombing will start on 2/15. At that time there will be 160-180 thousand American soldiers. The ground attack will start at the beginning of March,” it says. In fact, the invasion began on March 20 with fewer troops and was not preceded by a lengthy bombing campaign.

The Iraqi official, Mubdir al-Khudhair, is expected to testify in the case, as is Samir Vincent, a former Iraqi Olympic athlete, who has pleaded guilty to acting as a go-between for Saddam Hussein with senior US and UN officials.

John Irving, a British oil trader who allegedly negotiated some of the suspect oil deals, faces extradition to the United States on related charges.

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