U.N. rapped in oil-for-food probe

By Evelyn Leopold and Irwin Arieff 
September 7, 2005 
Reuters
http://today.reuters.co.uk/news/newsArticle.aspx?type=worldNews&storyID=2005-09-07T181147Z_01_SCH739811_RTRUKOC_0_UK-IRAQ-UN-PROBE.xml
UNITED NATIONS (Reuters) - A year-long probe into the Iraqi oil-for-food program heaped sharp criticism on U.N. Secretary-General Kofi Annan, his deputy and the U.N. Security Council on Wednesday for allowing Saddam Hussein to illegally obtain more than $10 billion (5.4 billion pounds).
The program, which allowed Hussein to sell oil to buy food and choose his own customers, was a compact with the devil and the devil had means for manipulating the program to his ends, said Paul Volcker, the former U.S. Federal Reserve chairman, who headed the probe.
Volcker delivered his nearly 1,000-page five-volume report to the 15-nation Security Council and told them to institute sweeping management reforms.
The report said a major problem was that no one was in charge of the $64 billion program -- neither the Security Council, meant to supervise it, nor the U.N. secretariat headed by Annan. But Annan is not accused of personal gain or influencing contract bidding, which involved a firm that employed his son, Kojo.
Annan told the council the report is critical of me personally, and I accept its criticism, adding that the findings are deeply embarrassing to us all. He, like Volcker, said member states had to approve some of the sweeping financial controls the United Nations has proposed.
The report said the former Iraqi president was able to divert $10 billion under oil-for-food, which began in late 1996 and ended in 2003. Of this, $1.8 billion was from revenues related to the program, the Independent Inquiry Committee said.
Another $8.4 billion came from smuggling oil to Jordan, Syria, Egypt and Turkey, with the knowledge of U.N. Security Council members, who were to enforce sanctions imposed on Iraq after it invaded Kuwait in 1990.
COUNCIL MUST SHARE BLAME
The committee's central conclusion is that the United Nations requires stronger executive leadership, thoroughgoing administrative reform and more reliable controls and auditing, the panel said in a statement.
However, responsibility for what went wrong with the program cannot be laid exclusively at the door of the (U.N.) secretariat, the panel said. Members of the Security Council ... must shoulder their share of the blame in providing uneven and wavering direction in the implementation of the program.
The Volcker report also faulted Canadian Louise Frechette, the U.N. deputy secretary-general, whom Annan assigned at one point to oversee the program.
The committee finds that the deputy secretary general, apparently uncertain of her role, did not provide the degree of leadership and oversight that the complex program required, the report said.
The panel also criticised Kojo Annan for trying to lobby U.N. purchasing officials on behalf of the Swiss firm Cotecna, which received a lucrative contract for Iraq.
The younger Annan also imported a costly Mercedes into Ghana using his father's diplomatic cover to avoid taxes and customs duty. There was no evidence the secretary-general knew about this.
The report also disclosed that Iraq tried to bribe former U.N. Secretary-General Boutros Boutros-Ghali with over $1 billion. But it said it had no evidence that Boutros-Ghali, in office in 1996 when the program was created, had been aware of Iraq's intentions or received any money.
The money was to have been passed through Iraqi-American businessman Samir Vincent and Tongsun Park, a South Korean lobbyist. Both are accused by federal prosecutors of attempting to bribe U.N. officials.
U.S. Ambassador John Bolton told the Security Council: There were bribes; there were kickbacks; there was lax oversight from the Secretariat; and some member states turned a blind eye towards this corruption.
But he said the report rejected the notion that business as usual at the United Nations is acceptable, adding: We need to reform the U.N. in a manner that will prevent another oil-for-food scandal.