Oil-for-Food Scandal

Off Topic Politics & World Issues
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Perhaps the U.N. isn’t even that good at humanitarian stuff – at least in terms of looking out for human rights.

How the Abusive Protect the Repressive at the U.N.
By JOANNE MARINER

Sudan, Cuba, Saudi Arabia, Zimbabwe, Russia: one thing these countries have in common is that their governments violate human rights flagrantly and systematically. But another thing they share, astonishingly enough, is membership on the U.N. body meant to monitor and prevent human rights violations.

Pakistan, China, Egypt, Congo–the list goes on. When it comes to rights-abusing countries, the 53-member U.N. Commission on Human Rights has plenty of depth.

An official U.N. report released last week owns up to the problem. Acknowledging the commission’s “eroding credibility,” it notes that counties that “lack a demonstrated commitment” to human rights are not particularly well-suited to the task of promoting respect for human rights globally. (This is a diplomatic way of saying that known robbers should not be hired as cops.)

It would be wonderful to be able to say that the United Nations has now come up with a good plan to address this problem, and that reform is on the way. Unfortunately, this is not the case. While the U.N. report includes a plan, it’s not a good plan, or even an adequate one.

Protecting the Abusive from Censure

Groups such as Human Rights Watch have been complaining about the U.N. commission’s membership problem for years. The focus of the abusive governments on the commission, Human Rights Watch warns, is on “minimizing the exposure of their own human rights record rather than on stigmatizing the worst human rights violations in the world and devising methods to bring about effective responses to these abuses.”

The recently-released report on the future of the United Nations deserves credit for acknowledging this issue, except that the problem is clearly too glaring to ignore. Eight months ago, at its last annual session, the commission’s trend toward rejecting censure of its most abusive members was unmistakable.

Not only did the Commission on Human Rights fail to pass resolutions critical of China, Russia (for Chechnya), and Zimbabwe, but some of these resolutions were not even discussed. Both the Chinese and Zimbabwean governments relied on a procedural device, known as the “no-action motion,” to prevent their resolutions from coming to a vote.

The commission’s response to the Darfur crisis also left something to be desired. At a moment when tens of thousands of refugees were fleeing ethnic cleansing in Sudan, the commission failed to pass a resolution condemning the country’s grave violations of human rights and international humanitarian law, instead adopting a decision expressing watered-down concerns about the situation.

Even worse, the following month, the United Nations Economic and Social Council (ECOSOC) voted to keep Sudan on the commission for another three years. (ECOSOC’s decision to reelect Sudan was reminiscent of its decision, in 2003, to reelect Cuba to another term on the commission in the immediate wake of that country’s crackdown on political dissidents.)

No one would suggest seating Jean-Claude Duvalier and Gen. Augusto Pinochet on the International Criminal Court, so why put the countries that are their equivalents on the U.N.'s main human rights body?

Reforming the Commission

The new U.N. reform report grasps the problem but fails to propose an effective solution for it. Indeed, judging from recent events, its main recommendation on membership - to expand the commission to include all 191 U.N. member states - could even worsen the situation.

The record of the U.N. General Assembly, which includes all U.N. member states, is instructive. Just two weeks ago, the General Assembly’s human rights committee rejected a resolution condemning violations in Darfur. Ninety-one countries voted in favor of the “no action” motion that killed the resolution, while only 74 voted against it.

John Danforth – the U.S. representative to the United Nations, who has worked hard to draw attention to the atrocities committed in Darfur – didn’t mince words in responding to the vote. “The message from the General Assembly is very simple,” he said. “‘You may be suffering, but we can’t be bothered.’”

He continued: “One wonders: If there can’t be a clear and direct statement on matters of basic principle, why have this building? What are we all about?”

Membership Criteria

A better proposal for reform has been made by Human Rights Watch. Rather than expand the commission to include any country, no matter what how awful its track record, Human Rights Watch recommends that the commission develop membership criteria that would bar abusive countries from joining.

Most obviously, countries that have recently been condemned by the commission for human rights violations should not be given a seat. Other membership requirements could include: ratifying the main human rights treaties; being up-to-date with reports to the United Nations on compliance with human rights conventions; and cooperating fully with U.N. investigators. And one might add that any country that is under U.N. investigation for genocide and crimes against humanity should be barred as well (in other words, a country like Sudan).

The U.N. reform report opposes creating criteria for membership on the commission, concluding that such proposals might further politicize the issue of human rights. It does not explain the reasoning behind this view, but one can assume that the authors of the report were afraid that the politicized debates that currently take place in the substance of the commission’s work would simply extend to the debate over membership.

There are two ways of responding to this concern. First, the U.N. should concentrate on developing clear criteria that can be objectively applied, like the ones listed above. While these requirements might not be entirely effective in sorting the good countries from the bad in terms of human rights, they will at least screen out a meaningful number of the worst violators.

Second, the U.N. should remember what’s at stake. While it can be difficult to keep politics from tainting human rights judgments, it is not impossible. If the Commission on Human Rights is to do meaningful work, these issues should be addressed before countries become members. If the U.N. waits until Zimbabwe and Sudan have seats on the commission, then it’s already too late.

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And of course, in addition to Oil-for-Terror, there’s that other, human rights scandal scourging the UN at the moment – and Max Boot analyzes the problems – I think he’s got good points:

Why U.N. Stays Mired in Its Defects

  • Start with too-friendly media, apathy and members’ entrenched interests.

by Max Boot
Los Angeles Times

Imagine if U.S. troops were accused of sexually exploiting children in impoverished nations. Imagine if a U.S. Cabinet secretary were accused of groping a female subordinate, whose complaint was then swatted aside by the president. Imagine if the head of a U.S. government agency and the president’s own offspring stood accused of complicity in the biggest embezzlement racket in history.

Those would be pretty big stories, no? Above-the-fold, top-of-the-newscast stories. Yet the United Nations has been mired in all these scandals and until just recently hardly anybody outside the right-wing blogosphere has noticed.

Even now, if you’re not an inveterate U.N.-watcher, you probably don’t know that Ruud Lubbers, the U.N. high commissioner for refugees, was accused of sexually harassing a subordinate, only to have the charges dismissed by Secretary-General Kofi Annan despite an internal investigation that supported the woman’s complaint. Or that U.N. peacekeepers have been accused of a variety of sexual offenses involving children for more than a decade, most recently in Congo. Or even that Annan’s son, Kojo, and Benon Savan, the head of the U.N. “oil for food” program in Iraq, are said to have benefited financially while Saddam Hussein stole $21 billion.

Where’s the outrage? It’s easy to find among conservatives, but then they never liked the U.N. to begin with. Why didn’t the mainstream media and the Democrats (pardon the redundancy), not to mention various European governments, devote more attention to these scandals? Far from demanding high-level resignations, they are circling the wagons.

The U.N.'s friends are doing their favorite international institution no favors with this knee-jerk defense. Until it cleans up its act, the U.N. can never be as influential as its boosters would like. Even Annan recognizes this. In fact, he seems to specialize in critiques of his own organization.

In 1997, the secretary-general issued a report on “Renewing the United Nations: A Program for Reform.” In 1999, he issued reports on the U.N.'s failures in Rwanda and Bosnia. In 2000, a commission chaired by Lakhdar Brahimi issued a report on how to overhaul U.N. peacekeeping. In 2002, Annan issued another report on “Strengthening of the United Nations: an Agenda for Further Change.”

Last week came the umpteenth report on reform, this one from the High Level Panel on Threats, Challenges and Change. Its criticisms are as scathing as anything written by the Heritage Foundation. The report noted that the General Assembly “often fails to focus effectively on the most compelling issues of the day,” that the Commission on Human Rights (which includes among its members gross human-rights violators) suffers from a “legitimacy deficit,” that the Security Council has responded with “glacial speed” to “massive human rights violations in Darfur” and elsewhere, and that the U.N. Secretariat is filled with bureaucrats who have “little or no expertise for tackling many of the new or emerging threats” that confront the world.

All true, but note that these problems have persisted despite all the past reform reports. Like its predecessors, the latest blue-ribbon panel offers a plethora of recommendations. Its major proposal ? enlarging the Security Council from 15 to 24 ? would probably make U.N. paralysis worse, not better, because it would mean having to get the agreement of even more states before taking action. Other steps, such as retiring useless bureaucrats, may be good ideas, but they are unlikely to cure an ailing institution.

All of the reformistas’ efforts founder on the rocks of apathy and inertia. The reality is that most of the U.N.'s 191-member states, to say nothing of its 49,000 employees, aren’t terribly interested in making it work better. They usually have other priorities. Even the Bush administration isn’t making much of a stink over the oil-for-food scandal because it needs U.N. support in Iraq and elsewhere.

Many member states don’t want to rock the boat because they have cozy deals with the current U.N. regime. A French bank, for instance, was the prime repository of the oil-for-food billions. Others are afraid that a stronger U.N. would interfere in their affairs. Russia doesn’t want the U.N. meddling in Chechnya, China doesn’t want it in Tibet, India doesn’t want it in Kashmir, and so on.

Flawed as it is, the U.N. does some useful things, ranging from providing cover for the decision to launch the 1991 Gulf War to issuing an influential 2003 report on the failings of the Arab world. The United States should try to make use of it when possible. Leaving the U.N., as some on the right suggest, is unrealistic. But it will never live up to the grandiose expectations of its starry-eyed supporters unless they get mad enough to demand real change. So far there’s no sign of that happening.

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More on the nature of the U.N.'s troubles – I’ve talked about this before – the U.N. isn’t a democratically accountable institution. That’s highly problematic.

http://nypost.com/postopinion/opedcolumnists/21223.htm

U.N. POWER PLAY

By JOHN O’SULLIVAN

December 10, 2004 – WHICH of the following recent news stories is the odd one out:

(a) United Nations accused of cover-up of sexual harassment by senior official.

(b) U.N. soldiers in Africa accused of sexual trafficking in minors.

(c) Son of U.N. Secretary General Kofi Annan accused of profiting from U.N. Oil-for-Food scandal until early this year.

(d) U.S. Senator urges Kofi Annan to resign after his committee discovers that the U.N.'s Oil-for-Food program transferred $21 billion to Saddam Hussein.

(e) U.N. “High Level Panel” of eminent persons urges greater powers for world body.

The answer is, of course, news headline (d).

No one is ever asked to resign for wrongdoing at the United Nations. Indeed, since Minnesota Sen. Norman Coleman suggested that the secretary general should fall on his sword for presiding over the Oil-for-Food scandal, there has been a positive rush of diplomats and governments from all over the world to his defense.

African countries in particular have rallied to his support. That is hardly surprising. He is the first secretary general from sub-Saharan Africa. And, reasonably enough, the continent has felt some pride in his elevation and in his genuine diplomatic skills.

Europe too ? in the persons of President Chirac of France and Chancellor Schroeder of Germany ? has expressed confidence in him. Again, that is hardly surprising. The Oil-for-Food scandal has received scandalously little attention in the European media, even though major European figures are plausibly alleged to have taken bribes from Saddam Hussein. So there is much less public indignation about the United Nations’ missing billions in Europe than in the United States.

And, finally, the “international community” has backed Annan in response to a letter that asked U.N. civil servants to vote their confidence in him. Since Annan is their boss and representative to the rest of the world, their support was surely foreordained (though the fact that the United Nations omitted a “No” box in the letter suggests a certain lack of confidence on somebody’s part.)

Americans tend to be baffled by these reactions. They look at the multiplying scandals around the United Nations and wonder how the man in charge can avoid being held responsible for any of it by other countries.

But the explanation is simple: Kofi Annan is the symbol of the United Nations’ lack of accountability. He is never held responsible for what goes wrong, because the United Nations is never held responsible, either. It sails in a cloud of noble idealism over the actual failures, hypocrisy, corruption and outright criminality that attend some U.N. actions on the ground below.

And there is a polite consensus outside the United States not to notice the glaring contradictions between idealism and reality. Too many influential people and institutions have invested too much in the United Nations and the U.N. system to see its flaws clearly.

Some governments in Europe and the Third World hope that a more powerful United Nations will restrain American power. Most European politicians and intellectuals have embraced the concept of a new global order in which the nation-states disappear and we are governed in future by international institutions hovering in the upper atmosphere.

Those political forces in Western countries that tend to lose elections ? namely, the liberal Left and its NGOs such as Amnesty International ? see the United Nations and its agencies as a means to force their governments to adopt their favored policies through international treaties and regulation. And all need the United Nations to keep its halo intact if it is to serve their purposes. So they turn a blind eye to manifest abuses.

It is possible that this strategy could work indefinitely if the United Nations were to adopt a modest and secondary role in world politics. But one mark of Annan’s record in office has been his attempt to expand the power and authority of the United Nations ? asserting the novel doctrine that the use of force was permissible only with the backing of the Security Council, for instance, and declaring that the Kosovo and Iraq wars were illegal because such support was lacking.

And then there is answer (e) above.

With the publication of the High Level Panel’s report, “A More Secure World,” the United Nations is further expanding its claims to exercise political authority in the world ? including authority over nation-states and governments ? on everything from AIDS to gun control. If implemented, the report’s proposals would greatly increase the powers of what the United Nations calls “global governance.”

Some of these proposals are sensible ? for instance, expanding the U.N. Security Council by the inclusion of six new permanent members such as Germany, Japan, India and Brazil.

But that expansion would surely clash with another proposal to grant the Security Council a veto over the use of pre-emptive force by any state, since a 24-strong Security Council would be very unlikely to authorize such force ? there would always be a friend of the potential “victim” in the room. In practice, of course, the United States would be the power most likely to suffer from such a U.N. veto.

But the overriding objection to such an expansion of the United Nations’ powers is that it remains an undemocratic and unrepresentative body. Most of its member-states are despotisms of one kind or another. Even if they were all democracies, the principle of “one state, one vote” would still place tiny Luxembourg on a level of equality with populous India.

None of the U.N. agencies is accountable to voters anywhere. And the report proposes no serious change in these arrangements.

What we have in the U.N. system, therefore, is a body that is not accountable democratically, in charge of significant resources, convinced of its own worthiness and avid for more power in the world.

Corruption and maladministration were bound to be the results ? and in the Oil-for-Food program they have emerged in triplicate.

Annan is a beneficiary of these arrangements ? but he may prove to be their victim, too. He has survived so far because the United Nations’ sins are not personal, but corporate. But the time may be approaching when he will be sacrificed to save the organization.

That would be neither fair nor sufficient. Until the U.N. itself is properly reformed and brought under democratic control, it should be given not more powers but fewer.

John O’Sullivan, a former Post editorial-page editor, is the editor of The National Interest and a member of Benador Associates.

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You know there’s trouble with the U.N. when the New Yorker runs critical articles:

http://www.newyorker.com/printable/?talk/041213ta_talk_gourevitch

COMMENT
POWER PLAYS
by Philip Gourevitch
Issue of 2004-12-13
Posted 2004-12-06

The air of corruption that clouds the United Nations these days cannot simply be fanned away by forcing the resignation of Kofi Annan as Secretary-General, as a growing number of prominent Republicans have been urging. Their pretext is the accumulating allegations of complicity of U.N. officials in scams that transformed the oil-for-food program in Saddam Hussein?s Iraq into a racketeering enterprise whose single greatest beneficiary?to the tune of twenty billion dollars?was the tyrant himself. Last week, Annan was obliged to admit that his son Kojo had ?disappointed? him by taking payments from a Swiss firm that the U.N. had hired to monitor Iraq?s imports while under U.N. sanctions. And the Secretary-General has also been called on to answer complaints of widespread sexual abuse by U.N. peacekeepers in the field and accusations from the U.N. employees? union of a lackadaisical attitude toward sexual harassment by U.N. officials.

Annan bristles at the insinuations of corruption in his ranks, but, in truth, his tenure was tainted from the beginning. In the mid-nineties, when he was head of peacekeeping, he presided over catastrophically failed missions in Bosnia and in Rwanda, where he ignored detailed warnings of genocide, then watched them come true, while the world did nothing to stop it. Those world leaders who later hailed him as a moral exemplar at best ignored that history, at worst regarded it as a kind of credential: since Annan was a compromised figure, they did not have to fear his censure. In theory, Annan?s departure at this point could create an opportunity for institutional revival. But the pervasive suspicion at U.N. headquarters is that President Bush, who flaunted his contempt for the Geneva convention by nominating as his attorney general the lawyer he employed to find a legal justification for torture, is looking not to revive the world body but to retire it.

In Nova Scotia last week, Bush announced that ?building effective multinational and multilateral institutions, and supporting effective multilateral action? would be the foremost foreign-policy goals of his second term. But the olive branch he held out to the Canadians and the rest of America?s erstwhile allies was purely rhetorical. The President made it clear that he still believes that other countries should multilaterally fall in line behind his unilateral decisions. In his view, America didn?t fail to win the U.N.?s support for the war in Iraq; the U.N. failed to support America. And just as Annan calls the war illegal, Bush calls the U.N.?s withholding of support a refusal to enforce the law of its anti-Saddam resolutions.

In this respect, the oil-for-food scandal, in which French and Russian notables (as well as some Texans) are also allegedly implicated, serves the Administration?s defensive assault on the U.N. Never mind that Saddam had no weapons of mass destruction and posed no threat to us; while Bush was in Nova Scotia, Norm Coleman, Republican of Minnesota, who is in charge of a Senate investigation into the oil-for-food program, called for Annan?s resignation in a Wall Street Journal op-ed, arguing, essentially, that it had been necessary to go to war in Iraq simply to bring an end to the U.N.?s role as Saddam?s enabler. (The war, it now seems, was neither pre?mptive nor preventive but punitive, and Annan was among those who needed punishing.) Annan has appointed an independent investigator?the former Federal Reserve chief Paul Volcker?but the more the Bush Administration guns for him the more the rest of the U.N.?s member states rally to his side.

It is worth remembering that Annan owes his position as Secretary-General to a similar White House power play. In 1996, the Clinton Administration, tired of resistance from Annan?s predecessor, Boutros Boutros-Ghali, maneuvered Annan into the job because, as the first career U.N. bureaucrat ever to rise to the top of the organization, he was assumed to be a company man, not a maverick. That assumption was not wholly mistaken. It took the Bush Administration?s radical hostility to international law and diplomacy to spark an equal animosity in Annan, whose distaste for the continuously escalating war in Iraq is, of course, shared by a majority of the U.N.?s members. Such is the grim state of the international divide: the sole superpower has alienated itself from the rest of the world and made the need for a functional U.N. more apparent than ever, even as the U.N.?s authority has been undermined by the same sort of insularity and lack of accountability that has diminished America?s standing as a world leader.

Last week, Annan released a set of proposals, put forward by a commission of senior international statesmen, for a systematic overhaul of the U.N. bureaucracy and an updating of international law?a blueprint for adapting the organization to the new century. The document stirred excitement in U.N. circles, not only because it sharply reproved the Bush Administration?s unilateral use of force but also because it raised the possibility of expanding the Security Council, from fifteen seats to twenty-four, and endorsed redefining the limits of national sovereignty to make international intervention legal in instances of genocide??the Rwanda never again clause,? a British diplomat called it. Yet nothing in the proposals promises to alter the chronic dysfunctions of the system. The proposed new permanent seats on the Security Council don?t carry the power of veto that gave the victorious Allies of the Second World War the exclusive clout they still enjoy. And the U.N.?s withdrawal from Rwanda during the slaughter was due not to insufficient laws but to a complete lack of will among the member states to deal with it. No law can change that. No reform can create a community of nations where none exists.

Just before Thanksgiving, John Danforth, the United States Ambassador to the U.N., expressed his frustration with the organization, but he didn?t talk about Iraq, or oil-for-food, or Security Council politics, or the deployment of force, or institutional reform. Instead, he lamented the General Assembly?s refusal to condemn abuses against the people of the Darfur region of Sudan, where the Bush Administration has determined that genocide is under way. Nobody in the hall wanted to be bothered, and Danforth asked, ?Why have this building? What is it all about?? As it happened, Danforth, who has served only six months at the U.N., had sent his letter of resignation to the White House the day before, and his blunt outburst suggested that he knew the answers to his questions all too well. We have the U.N. and keep trying to make it work because we would be even worse off without it.

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Here’s a link to a pdf explaining Volcker’s findings concerning the audits, which came out yesterday:

http://www.iic-offp.org/documents/IAD%20Briefing%20Paper.pdf

This should be just the beginning of this inquiry – this just establishes that billions were wasted by the U.N., but not where the money went or who knew what when.

Also, they need to open up all the records. Apparently, certain records were kept from the investigators – kind of like if Enron people had said, “Yeah, here’s a bunch of stuff, but you can’t have access to that room full of documents back there…”

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More from the Daily Telegraph:

Scandals may bring down the ‘secular Pope’
By Anton La Guardia, Diplomatic Editor
(Filed: 11/01/2005)

Kofi Annan survived the disasters of UN peacekeeping in Srebrenica and Rwanda, the bitter Security Council divisions over the Iraq war and the bombing of the UN headquarters in Baghdad.

But the man described by some as the “secular Pope” is now more vulnerable than ever, because of growing scandal over his organisation’s mismanagement of sanctions and humanitarian aid to Iraq.

Calls for Mr Annan’s resignation were once restricted to ideologically driven hardline US conservatives. Now diplomats in New York are openly asking whether the secretary-general can remain in office until the end of his term in December 2006.

British officials said they were still “fully behind Kofi”. Nevertheless, the days in 2001 when the veteran Ghanaian diplomat were re-elected and received the Nobel Peace Prize on behalf of the UN now seem like a long time ago.

Mr Annan rose through the ranks of the UN to become secretary-general in 1997. He has apologised for the UN’s failure to protect civilians in Bosnia and Rwanda when he was head of peacekeeping operations in the 1990s.

In recent months he has tried to repair relations with the United States after the Iraq war, but the aftershocks of the conflict may yet bring him down.

The fall of Baghdad and the opening up of Saddam Hussein’s archives have revealed how the UN oil-for-food programme, a vast effort to relieve the suffering of Iraqis under sanctions, turned into a colossal fraud.

Saddam siphoned off billions of dollars from the programme to finance his regime and allegedly to pay bribes to favoured politicians around the world.

The UN and its supporters fended off an onslaught of accusations from the US Congress by saying the real cause of the problem was the paralysis in the UN Security Council between Britain and America on one side and Russia and France on the other.

In April Mr Annan set up a committee chaired by Paul Volcker, the former chairman of the US Federal Reserve, to investigate the UN’s performance.

This has now pinned a large dose of responsibility at the secretary-general’s door by releasing 58 reports by the UN’s auditors who identified a litany of misused funds.

Much more seriously, the committee says these checks only dealt with “peripheral” aspects of the programme.

The vital core functions were ignored: the performance of UN headquarters was not audited, and there were no checks of Iraq’s contracts to sell oil and buy humanitarian supplies.

It is from these contracts that Iraq was able to skim off hundreds of millions of dollars’ worth of illegal funds.

The committee implies that this was a failure by the UN bureaucracy, and therefore of Mr Annan.

It now remains to be seen whether the Volcker committee, which is due to release a fuller interim report later this month, finds that UN officials were corrupt as well as incompetent.

In particular, a detailed US report last year found that Benon Sevan, the head of the UN’s oil-for-food programme, benefited from contracts to export 11.5 million barrels of oil. Mr Sevan denies all allegations of wrongdoing.

Between 1997 and 2002, the UN oversaw the export of about $65 billion worth of Iraqi oil and the import of $46 billion worth of humanitarian and other civilian supplies.

In the same period, the US General Accounting Office (GAO) estimates, Saddam earned about $10 billion in illegal revenues. Only a fraction - $1.7 billion - was skimmed off the oil-for-food programme, while the rest was raised by oil smuggling or oil sales to neighbouring countries.

The Volcker committee says that UN officials were aware of the risk of abuse, and argues that proper scrutiny would have limited the scale of the fraud.

David Hannay, the former British ambassador to the UN and a co-author of a report calling for widespread reform of the UN, said much of the criticism of Mr Annan was unfair or misinformed.

He also said the problems with the oil-for-food programme have little relevance to the UN’s management of billions of dollars pouring into relief appeals for victims of the Asian tsunami.

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This is so much bigger than Enron and Worldcom combined – we all do realize that in one year the U.N. managed to “lose” more money via corruption relating to rebuilding Kuwait than has been raised thusfar for tsunami victims?

The Oil for Food Audits
January 13, 2005; Page A12

This week’s release of 58 audits documenting widespread mismanagement in the U.N.'s Iraqi Oil for Food program is being treated as something of a ho-hum moment. So it’s worth recalling the denial, feigned confusion – “It’s not really clear to us even what the allegations are” – and attempts at a cover-up with which Secretary General Kofi Annan’s office responded to the developing scandal in the early months of last year.

The audits – now available www.iic-offp.org – demonstrate beyond a shadow of a doubt that U.N. headquarters was well aware of serious problems with the program. They also elucidate the motives the Secretariat might have had for sending out a flurry of “hush” letters threatening program contractors with legal action if they cooperated with U.S. investigators. That’s because the audits shine a particularly unflattering light on the work of the companies charged with inspecting the oil and goods traded under the program – Saybolt (oil), and Lloyd’s Register and Cotecna (humanitarian imports).

The big picture here is that the Office of the Iraq Program (OIP) had little way of knowing whether the quantity and quality of goods moving in and out of Iraq even remotely resembled what was reported. This left ample room for kickbacks and other schemes from which we now know Saddam illegally profited.

One persistent problem was billing for time that inspectors didn’t spend at their posts – some 1,800 man-days in the case of Lloyd’s Register. Not surprisingly then, the audits also show consistent failure by the inspectors to fulfill their primary duty of independent, on-site verification of goods, resulting in some getting through that were later dubbed “unfit for human consumption.”

And what was the response of headquarters to concerns of this type? To largely brush them aside on the grounds that tackling them could, in the auditors’ words, create “backlog/delays” and – ironic, isn’t it? – “possibly bring Organization [i.e., the U.N.] into disrepute.”

This see-no-evil approach is consistent with OIP director Benon Sevan’s public statements and actions in response to attempts by the British and American governments to address reports of corruption in the program. The picture will be complete with the release of the minutes of the U.N.'s so-called 661 Committee of member states that oversaw the Iraq sanctions. We’re told they also don’t support the Secretariat’s initial claims of innocence and ignorance.

Particularly troubling to investigators should be the Cotecna audit. When the Oil for Food scandal started to break early last year, Mr. Annan’s office took pains to stress that his son’s relationship with the Swiss inspections company ended before – albeit just weeks before – it won a major program-related contract. But we recently learned that was untrue, and that Kojo Annan remained on the Cotecna payroll throughout the program and until February of last year.

Now we see that one of the audits the U.N. was hiding further calls into question its version of the Cotecna-Kojo story – that the company won its contract by the simple virtue of being the lowest bidder. In fact, wrote the auditors, Cotecna successfully upped its asking price within days of winning the contract without triggering a competitive rebid, an outcome that was probably “not appropriate.” And in November 1999 Cotecna proposed a new fee structure “exactly equal to the offer of the second lowest bidder (Intertrek Testing (UK)).”

The auditors continued: “Thus within one year of the start of the Contract, the basic reasons for awarding the Contract to the Contractor on grounds of being the lowest bidder were no longer valid. Accordingly, it is our opinion that OIP/PD should have gone for a fresh bid, as the price increase was substantial ($101 per-man-day, representing an increase of more than 20 percent).”

There was no rebid, at least until March 2001 when Cotecna was again successful. What the reasons were, and whether any of this had anything to do with Cotecna’s desire to keep Kojo Annan happy, remain unclear.

What is clear is that Cotecna’s performance probably wasn’t the primary reason it retained its contract. Among the auditors’ other findings were “huge differences” between figures for goods Cotecna recorded entering Iraq and the figures reported by the U.N. agencies that later received them. During two six-month phases of Oil for Food those discrepancies were as large as $67.5 million and $42.5 million respectively.

A spokesman for the Secretary General declined to respond yesterday to our questions about the “lowest bid” explanation for the Cotecna contract, apart from saying the audits were part of “a dialogue,” and that the U.N. would wait for the final report of the official investigation led by former Fed Chairman Paul Volcker.

Which brings us to the fact that the Volcker Commission appears to have drawn some fairly damning conclusions already. In the briefing paper accompanying the release of these audits it marvels at the critical aspects of the program that weren’t audited. Although “the potential for abuse was a principal concern of the U.N. team that negotiated the Memorandum of Understanding with Iraq in 1995,” the Commission writes, “there were no examinations of the oil and humanitarian contracts” or the processing of letters of credit by BNP Paribas, which handled the program money. Such examinations, the Commission states, might have deterred the surcharge and kickback schemes Saddam used to get around sanctions.

Last April we wrote that Oil for Food had been “so secretively run that it seemed almost designed to facilitate the corruption that fleeced [Iraqis] of billions of dollars in aid.” What sunshine we’ve had from the U.N. since has done nothing to change that conclusion.

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The picture is becoming clearer, and it’s not a good one.

Oil for Influence
January 19, 2005; Page A12

The United Nations Oil for Food scandal continues to effloresce, moving yesterday into the criminal realm. Iraqi-American Samir Vincent’s guilty plea shows that Saddam Hussein was indeed exploiting the program to buy influence around the world – including in the U.S. – and suggests there is far more to be uncovered.

Mr. Vincent pled guilty in Federal District Court in New York to acting as an unregistered foreign agent for Saddam’s Iraq and to related conspiracy and tax-evasion charges. According to the charge sheet prepared by U.S. Attorney David Kelley, he “consulted with and repeatedly received direction from the Government of Iraq in the course of lobbying officials of the United States Government and the United Nations.” For his efforts, Mr. Vincent confesses, he was personally awarded five separate oil allocations worth millions of dollars under Oil for Food. He faces potential penalties of up to 28 years in prison.

So, precisely what services did Saddam Hussein deem that valuable? A full answer likely will have to wait for what U.S. Attorney Kelley tells us is an “ongoing investigation” – in which Mr. Vincent has agreed to cooperate – to further its course. But the charge sheet refers tantalizingly to efforts by Mr. Vincent and unnamed others “including United Nations officials … to secure terms favorable to Iraq in connection with the adoption and implementation of [Security Council] Resolution 986,” which created the Oil for Food program. That suggests Saddam understood from the start that Oil for Food was a chance to evade U.N. sanctions and prop up his regime.

The charge sheet also describes what appear to be extensive lobbying efforts over many years involving “former officials of the United States Government who maintained close contacts to high-ranking members of both the Clinton and Bush Administrations” in an effort to fully repeal sanctions. “Vincent reported the results of those consultations to the Iraqi Intelligence Service,” the charges state.

Like any good prosecutor, U.S. Attorney Kelley refuses to speculate on the next steps in his investigation. But another American whose name has surfaced in connection with Oil for Food is Detroit-area businessman Shakir al-Khafaji. Like Mr. Vincent, Mr. Khafaji appeared on lists of individuals alleged to have received oil allocations from Saddam.

As our Robert Pollock reported last March based on information from an Iraqi intelligence source, those oil vouchers may have been similarly intended as part of an influence-buying campaign here in the U.S. Mr. Khafaji financed an anti-sanctions documentary by former U.N. weapons inspector Scott Ritter, and he brought a Congressional delegation headed by former House Minority Whip David Bonior to Iraq, among other activities. A third American alleged to have received oil vouchers is Texas tycoon Oscar Wyatt, a longtime acquaintance of Saddam who opposed the first Gulf War.

Saddam’s influence-buying was ineffective when it came to the U.S. But remember that prior to 9/11 and President Bush’s decision to promote democracy in the Middle East, there was a growing consensus in the U.S. foreign policy establishment in favor of “smart” (i.e., relaxed) sanctions on Iraq. We’d be curious to know if the smart sanctions proponents were among Mr. Vincent’s associates.

And of course Saddam’s buy-them-off strategy was far more extensive – and arguably successful – as regards the rest of the world. Why did France, Russia and the U.N. Security Council refuse to approve force despite Saddam’s flagrant violation of 17 different resolutions? Yesterday’s news makes it still harder to claim with a straight face that this type of corruption, or at least fear of its exposure, had nothing to do with the refusal to oust Saddam.

The Oil for Food scandal is at its roots about whether the current U.N.-centric global security architecture is hopelessly vulnerable to corruption or can be trusted to perform. That’s why every serious internationalist should be paying close attention to investigations like Mr. Kelley’s and that of the U.N. panel led by Paul Volcker.

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Worrying. As far as I see, big sums of money seem to have a very strange effect on people indeed.

"Iraq reconstruction funds missing

The missing $8.8bn is more than 40% of Iraq’s oil revenues
Almost $9bn (?4.7bn) of Iraqi oil revenue is missing from a fund set up to reconstruct the country."

Any thoughts?

Makkun

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I hadn’t heard anything about it, but on first reading of the story it sounds troubling. I understand not being able to apply best-practices U.S. accounting standards during a war, but that would not appear to account for everything.

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January 30, 2005

Kofi Annan?s son admits oil dealing
Robert Winnett and Jonathon Carr-Brown

THE son of the United Nations secretary-general has admitted he was involved in negotiations to sell millions of barrels of Iraqi oil under the auspices of Saddam Hussein.

Kojo Annan has told a close friend he became involved in negotiations to sell 2m barrels of Iraqi oil to a Moroccan company in 2001. He is understood to be co-operating with UN investigators probing the discredited oil for food programme.

The alleged admission will increase pressure on Kofi Annan, the UN secretary general, who is already facing calls for his resignation over the management of the humanitarian programme.

The oil for food programme allowed Saddam to sell oil to buy humanitarian supplies under UN supervision. However, it has emerged that the programme was riddled with corruption as Saddam used it to buy influence around the world.

Several senior UN staff are alleged to have profited from the scheme, and the apparent connection between Kojo and the programme has become the subject of intense international scrutiny. Critics claim that Kofi faces a significant conflict of interest if Kojo sought to profit from the discredited scheme.

Initially it emerged that Cotecna, the company awarded the contract to monitor humanitarian supplies imported into Iraq, had previously employed Kojo and paid him fees throughout the term of the oil for food programme.

However, a friend of Kojo?s said: ?He has explained to the investigators that his only involvement with Cotecna was in Nigeria and that he knew nothing about the deal in Iraq. He is looking forward to the investigation report being published so that he will be exonerated on this point.?

Potentially more serious is his connections with Hani Yamani, the son of Sheikh Yamani, the wealthy former Saudi oil minister who set up OPEC. Kojo acted as a director for Hani Yamani?s company and was a close business associate. The pair represented the coming together of two of the world?s most influential families.

In 2001 Yamani lined up a deal to sell about $60m worth of Iraqi oil to a Moroccan company. The Sunday Times has statements from two close business associates of Yamani who claim that Kojo was involved in the deal.

Kojo is alleged to have travelled to Morocco to help finalise the sale and was present at key meetings. However, the sale was abandoned by Yamani. It is not known if the oil was to have been bought direct from Saddam?s oil ministry or whether a third party was involved.

A friend of Kojo?s said: ?He was just trying to do Hani a favour. Believe me, Kojo is as straight as they come. In the end the deal never went through because Hani was trying to make an unrealistic profit.?

Another source, close to Yamani?s business Air Harbour Technologies, said: ?Hani Yamani liked to surround himself with the great and the good. Kojo was a very passive executive and I always thought he basically lent his name to the firm. The Annan name obviously has a certain presence when you are putting together deals in Africa.?

Since the Iraqi deal collapsed, Kojo, 31, has set up a company that imports oil to Nigeria from the Balkan states. He is a regular visitor to England, where he was educated, and has a ?500,000 flat on London?s King Road. He socialises with other well-known Nigerians, is always impeccably dressed and enjoys the use of a chauffeur-driven Mercedes.

Paul Volcker, the former chairman of the American Federal Reserve, is preparing an interim report on the oil for food programme, due to be published on February 8 or 9. But he is not thought to have any ?smoking gun?. However, some US politicians will pore over it for any evidence that might precipitate Kofi Annan?s departure from the UN.

Last week an American charity released a letter signed by 70 Nobel laureates backing Kofi Annan as secretary-general of the UN. The British government have publicly backed Annan?s position although George W Bush?s support has been less forthcoming.

The publication of the Volcker report is unlikely to mark the end of the scrutiny of Kojo?s affairs. Several American prosecutors have launched criminal inquiries into the oil for food programme. John Ashcroft, the US attorney-general, last week refused to reveal whether Kojo would be subpoenaed when questioned. Friends say any such action would be politically motivated.

Yesterday Kojo declined to comment on any alleged involvement in the programme. His London lawyers continued to deny he had any involvement with Yamani?s Iraqi oil deal.

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Just chuckling to myself thinking about what a field day the press would have with this incredible story if, say President Bush, Vice President Cheney or another prominent republican were behind something like this.

As it stands this does not occupy a whole lot of air time on the big three nteworks. Odd huh? LOL

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It looks as if Paul Volker’s standing a little closer than arms-length from those he is supposedly investigating.

A fox News report is saying that Volker failed to file personal financial statements, or declare any potential conflicts of interest with some of the main playeres in the OFF scandal.

Kofi’s spokesman acually said that Volker didn’t need to file the required documents because he is a well trusted individual.

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BostonBarrister,

[quote]BostonBarrister wrote:
I hadn’t heard anything about it, but on first reading of the story it sounds troubling. I understand not being able to apply best-practices U.S. accounting standards during a war, but that would not appear to account for everything.[/quote]

I agree. Fuckups are likely to happen in a chaos like that. But, if the story holds, it would be a series of substantial fuckups with a lot of money lost.

Makkun