GEORGE GALLOWAY was referred to US prosecutors last night by a Senate committee that said there was “probable cause” to believe that he lied to Congress about his role in the UN Oil-for-Food scandal.

Democrats joined Republicans on the Senate subcommittee on Investigations in forwarding the case to the US Justice Department and prosecutors for potential prosecution.

The decision came after the discovery by Senate investigators of a payment of $150,000 (£84,000) in Iraqi oil proceeds to the MP’s now-estranged wife, Amina Naji Abu Zayyad.

Investigators also traced $446,000 in Iraqi oil money to the Respect MP’s anti-sanctions Mariam Appeal, originally set up to pay for medical treatment in Britain of an Iraqi girl suffering from leukaemia.

The Senate panel said the evidence called “into question the veracity of sworn testimony” given by Mr Galloway at his confrontation with senators in May, in which he denied any involvement in Iraqi oil sales.

Senator Norm Coleman, the panel’s Republican chairman, called the payment of Iraqi oil money to Mr Galloway’s wife “a smoking gun”. Democrats joined the committee’s Republican majority in referring the case to the Justice Department and prosecutors in New York and Washington.

“Since Mr Galloway’s testimony, the subcommittee has obtained evidence indicating the Mr Galloway made false or misleading statements under oath at the hearing,” the panel said in a letter to the US Attorney-General. “We have determined that there is reasonable cause to believe that violations of law may have occurred.”

Congressional aides say Mr Galloway could face prosecution in America for perjury, making false statements or obstructing a Congressional proceeding. In making its referral, the panel also noted that illicit kickbacks were paid on Iraqi oil sales linked to Mr Galloway in violation of UN sanctions. It did not, however, present any evidence that he knew of them.

Last night Ron McKay, a spokesman for the MP, said: “George welcomes this. He has demanded it and is glad to know something is happening.”

The case stems from the Oil-for-Food scandal involving Saddam Hussein’s efforts to use oil money to buy influence around the world.

Mr Galloway has always strenuously denied receiving lucrative “oil allocations” from the Saddam Hussein regime. But the Senate panel discovered that a Jordanian middleman, Fawaz Zureikat, had transferred Iraqi oil proceeds both to Ms Abu Zayyad and to the Mariam Appeal.

A UN inquiry traced a separate series of payments totalling $120,000 to Ms Abu Zayyad from the company of a British-Iraqi businessman.

The committee said that through the British Embassy it had provided its report on Mr Galloway to British authorities that had requested access to its evidence, including the Charity Commission. Sir Philip Mawer, the Parliamentary Commissioner for Standards, will look at whether the MP broke the Code of Conduct by not making full disclosure to the Register of Members’ Interests.

• An investigation into the conduct of the general election in the Bethnal Green and Bow constituency has found no evidence to back Mr Galloway’s allegations of widespread fraud.

  Metropolitan Police specialists found that, although electoral records held by Tower Hamlets council were “not reliable”, there had been “remarkably little” polling fraud in the borough. After taking the seat from Labour’s Oona King, Mr Galloway had claimed in his acceptance speech that the election there had been “a shambles” and that its running would “disgrace a banana republic”.
  
  WHAT NEXT?

• An investigation by the US Department of Justice

• Charges against Mr Galloway could be brought under the Federal False Statements Statute which makes it unlawful to lie to Congress

• Prosecutors could use the Federal Obstruction of Congressional Proceedings Statute, which prohibits impeding a congressional inquiry, instead

• Indictments under these statutes carry a maximum jail sentence of five years and a $250,000 fine

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