August 10, 2005
U.N. Oil - For - Food Probe Had Wide Access
By THE ASSOCIATED PRESS
Filed at 12:31 p.m. ET
UNITED NATIONS (AP) -- The chief investigator of the oil-for-food program in Iraq said he's gotten more help from foreign countries than any U.S. inquiry would because his probe was authorized by the United Nations and not viewed as ''a witch hunt.''
Former U.S. Federal Reserve chairman Paul Volcker responded to criticism that the Independent Inquiry Committee he heads has no power to subpoena witnesses -- unlike U.S. legal authorities or Congressional committees -- and therefore has to rely on the voluntary cooperation of governments and individuals.
''There's no doubt in my mind that we've got more cooperation from foreign governments than any American legal investigating authority would have because we were U.N. -- we had a U.N. resolution,'' Volcker told The Associated Press.
''And in some cases, not every case, they were willing to cooperate with us in a way that they would -- I'm morally certain -- not have been willing to cooperate with the U.S. government investigation, which would have been interpreted as a witch hunt,'' he added.
The $64 billion oil-for-food program is also being investigated by half a dozen Congressional committees, the Manhattan District Attorney's office, and the U.S. attorney's office for the southern district of New York.
The program, launched in December 1996 to help ordinary Iraqis cope with U.N. sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait, was one of the largest humanitarian efforts in history. By most accounts, it achieved what it set out to do, becoming a lifeline for 90 percent of the country's population of 26 million.
Under the program, Saddam's regime could sell oil, provided the proceeds went primarily to buy humanitarian goods or pay war reparations. Saddam allegedly sought to curry favor with former government officials, activists, journalists and others by giving them vouchers for Iraqi oil that could then be resold at a profit.
Richard Goldstone, a member of Volcker's committee and a former Yugoslav war crimes prosecutor, gave an indication of the extent of corruption in the program in an AP interview. He alleged that about half the 4,500 companies that took part paid kickbacks or illegal surcharges on oil purchases.
The companies are being notified by letter and given a chance to respond to the accusations, he said.
Volcker's committee is wrapping up its work with a major report due in early September and a final report in October on the companies involved in the purchase of Iraqi oil or sale of humanitarian goods under the program.
In the committee's third report released Monday, it said it had found enough evidence for a prosecution of program director Benon Sevan, alleging he took $147,184 in illegal kickbacks. Also on Monday, a U.N. official was charged for the first time in connection with the scandal. A Russian procurement officer, Alexander Yakovlev, pled guilty to soliciting a bribe and pocketing hundreds of millions of dollars in bribes on other contracts.
The report Monday also said newly discovered e-mail suggesting U.N. Secretary-General Kofi Annan knew more than he said about a company that employed his son, Kojo, and won an oil-for-food contract ''clearly raises further questions.''
As the investigation nears an end, Volcker regretted his conclusions on Annan's role and his recommendations for U.N. reform will be issued just weeks before a summit of world leaders in mid-September to overhaul the world body.
''I wish this report was out two months ago,'' he said. ''It comes late and it complicates it.''
Mark Malloch Brown, the secretary-general's chief of staff, told reporters Monday that Annan expects ''vindication'' in the final report.
Volcker promised that in the end his committee will provide an estimate of the dollar value of the corrupt dealings.
In March, he said there was no evidence the corruption level reached $21 billion as a Senate subcommittee estimated, but was more like the $11 billion in a CIA report or the $10 billion in a U.S. General Accounting Office report -- most of it from oil smuggling outside the oil-for-food program.
''One of my frustrations is in assessing the smuggling,'' Volcker said. This was the area where he had gotten the least cooperation, he added.
He praised the cooperation of some law enforcement agencies, singling out the Manhattan District Attorney's office, the French, Italians, Swiss and a number of Middle Eastern countries.
''We have much better cooperation from the State Department in recent months, but when we get into areas of smuggling in particular, the cooperation is less forthcoming,'' he said.
Volcker singled out David Kelley, the U.S. attorney for the southern district of New York, for refusing to cooperate with his investigation.