Final report faults U.N. on oil-for-food
An investigation of the program designed to let Iraqis sell oil to buy food said the world body's effort lacked competence, honesty and accountability. The full findings are due today.

By Bill Varner
September 7, 2005
The Philadelphia Inquirer
http://www.philly.com/mld/inquirer/news/nation/12576331.htm
U.N. Secretary-General Kofi Annan and the Security Council did not properly manage the program that allowed former Iraqi dictator Saddam Hussein to sell oil to buy food and medicine, former U.S. Federal Reserve Chairman Paul Volcker said in a preface of his final report, which is to be released today.
The preface to the 1,000-page report says management of the oil-for-food program too often lacked competence, honesty and accountability. The preface contains no new allegations of specific wrongdoing by Annan or any other U.N. official.
The five-page section says the program succeeded in its main purposes of depriving Hussein of weapons of mass destruction and allowing the Iraqi people to maintain minimal standards of nutrition and health. But sadly, those successes fell under an increasingly dark shadow, the preface says.
Created by the Security Council as an exemption to sanctions imposed on Iraq after its 1990 invasion of Kuwait, the program allowed Hussein to sell $64 billion worth of oil from 1996 until the U.S.-led invasion of Iraq in 2003. Hussein's government made more than $21.3 billion in illegal revenue by subverting the program and other sanctions, U.S. congressional investigators reported in November.
U.N. spokesman Stephane Dujarric had no comment on the preface.
The final report comes as the United Nations' 191 member states consider recommendations by Annan to improve the world body's management and oversight. More than 170 world leaders will be asked to endorse those changes when they meet in New York next week to mark the 60th anniversary of the United Nations' creation.
Republican lawmakers have threatened cuts in U.S. financial support for the world body unless changes are made. There are several investigations of the oil-for-food scandal, including those by Congress and the federal government.
The Volcker committee, created by Annan and the Security Council in April 2004, used dozens of attorneys and investigators from 28 nations to probe the program, according to the preface, which cited constraints of time and lack of full cooperation by some governments for lack of detail in some areas.
The preface says that the United Nations requires stronger executive leadership, thorough administrative reform, and more reliable controls and auditing. It recommends creation of the position of U.N. chief operating officer to handle administrative responsibilities for the secretary-general, and formation of an independent auditing board.
The preface also says the 15-member Security Council, which tolerated large-scale smuggling and aided and abetted grievous weaknesses in administrative practices, must do a better job of clarifying the purpose and means of implementing future programs.
It also recommends that the United Nations seek more effective coordination between agencies.
While the preface recommends the changes be enacted by next year, the chances of that happening are not clear. U.N. member states are already grappling with proposals for change from Annan, but they have confronted deep divisions.
Investigation of the oil-for-food program has produced indictments of two Russian citizens who worked for the United Nations.
Former procurement officer Alexander Yakovlev pleaded guilty Aug. 8 to charges of wire fraud and money-laundering brought by U.S. prosecutors.
A New York federal grand jury Sept. 2 indicted Vladimir Kuznetsov, a Russian diplomat under contract to the United Nations on administrative and budgetary issues, charging him with conspiring to launder money. He pleaded not guilty.
In a report Aug. 8, Volcker accused Benon Sevan, who directed the oil-for-food program, of taking kickbacks from a company for helping it secure contracts to buy Iraqi oil. The report, the third on the program by Volcker's committee, said Sevan knew oil was purchased by the African Middle East Petroleum Co. Ltd. Inc. in violation of U.N. sanctions.
Sevan, who resigned his job Aug. 7, has denied any wrongdoing. He cannot be extradited from his native Cyprus, where he was reported to be Aug. 12, should he be indicted in the United States, Cypriot and U.N. officials said. Cyprus does not hand its nationals over to other countries for prosecution, according to Annie Charalambous, a spokeswoman for the Cypriot Embassy in Washington.
Volcker is to summarize his final report in an opening meeting of the Security Council today, and then answer questions from diplomats in a closed meeting.