Agency May Transfer Iraqi Money To Scandal-Plagued United Nations
BY BENNY AVNI - Staff Reporter of the Sun
July 7, 2005

UNITED NATIONS - A Geneva based U.N. agency that was established after Iraq's 1990 invasion of Kuwait to compensate Saddam Hussein's victims might transfer to scandal-plagued Turtle Bay any remaining Iraqi-financed funds - as well as unresolved issues - after its presumed demise at the end of 2007.
The funds would cover a $33 billion gap between money the agency, known as the U.N. Compensation Commission, has already approved to those who suffered at the hands of Saddam's regime and funds already paid out. The discrepancy, which would take years to reconcile, could be handled at U.N. headquarters, a spokesman for the agency, Joe Sills, said yesterday at a U.N. briefing.
Transferring jurisdiction over more Iraqi oil money to Turtle Bay must be handled properly, Mr. Sills said. The United Nations continues to feel pressure from ongoing internal and congressional inquiries into its oil-for-food program, which used Iraqi oil revenues to deliver goods to Iraqi citizens under international sanctions. Mr. Sills was careful to distance the compensation commission's work from that of oil for food.
Iraq's nascent government wants to gain control of the process, which is financed by 5% of its total oil revenues - and eliminate the United Nations' role therein. We suggest we stop the payments of 5% from oil revenues, Iraqi Deputy Foreign Minister Mohammed Hamud Bidan told Reuters recently. We think it is time now to stop and leave Iraq to negotiate directly with the states concerned.
Last January, the United Nations approved committee led by a former Federal Reserve chairman, Paul Volcker, released some internal U.N. audits that alleged mishandling of funds by the UNCC.
Yet Mr. Sills said yesterday, The mandate of the Volcker committee has to do with the oil-for-food program. He also said, The UNCC has nothing to do with oil for food. Nevertheless, while describing the history of the compensation commission, which was established shortly after Iraq's invasion of Kuwait, he said that the bulk of the UNCC funds began flowing in after oil for food was established in 1996, underscoring a link between the sister U.N. programs.
A spokesman for the Volcker committee, Michael Holtzman, told The New York Sun that Secretary-General Annan has instructed all U.N. agencies to cooperate with his group's inquiry. We'll go wherever the evidence will lead us, Mr. Holtzman said, while refusing to disclose whether the UNCC is currently under scrutiny.
Shortly after it was established in 1993, the UNCC used 30% of all Iraqi oil revenues to compensate victims of the Gulf War, most of whom were Kuwaiti. The percentage was reduced to 15 and later to the current level of 5%. While a new international drive to relieve Iraq of its $125 billion in Saddam-era debt was renewed in earnest at Brussels last month, the UNCC continued to process compensation claims, further burdening Iraq's attempts to revive its economy.
According to Mr. Sills, the target date for the committee to finish its work is the end of 2007, subject to approval by the U.N. Security Council.
The UNCC initially received $354 billion in compensation claims and has approved $52.5 billion since its establishment. Claims totaling $19.2 billion have been paid. All were approved by a group of 58 commissioners. Claimants vary from Kuwaiti individuals and companies who lost life, revenue, and assets during the war to Israelis who were hit by Scud missiles.
The first claimants to be compensated by the ICC were Palestinian Arabs, many of whom were exiled by Kuwait after the end of the war for siding with Saddam. Reparations were also paid, according to the left-leaning Guardian of Britain, to American corporations such as Bechtel, Halliburton, Mobil, Shell, Kentucky Fried Chicken, and Toys 'R Us.
It is winding down, Mr. Sills said yesterday, when asked about the snail pace of the commission's work. This year, the administrative budget for the UNCC's bureaucrats was $15.1 million, he said, while last year it was $15.7 million. He referred to the committee's workers as a skeleton staff.