U.N. corruption cited in Iraq oil-food scandal
By Betsy Pisik
September 8, 2005
The Washington Times
Original Source: http://www.washingtontimes.com/world/20050907-113942-1008r.htm

NEW YORK -- U.N. incompetence and corruption enabled Saddam Hussein to siphon more than $1 billion from an oil-for-food program that was flawed from conception to conclusion, an independent commission said yesterday. 

Deputy Secretary-General Louise Frechette and other close aides to Secretary-General Kofi Annan suffered harsh criticism in the five-volume report by the Independent Inquiry Committee (IIC), headed by former Federal Reserve Chairman Paul Volcker, which cited the complicity of U.N. member governments and Security Council diplomats. 

The evidence was not reasonably sufficient to find Mr. Annan personally guilty of wrongdoing in a system that Saddam manipulated with bribes, political pressure and a refusal to cooperate in the humanitarian program, the committee said. 

But it released new details of how Mr. Annan's son, Kojo, profited from his U.N. contacts, noting that he had phoned friends in the procurement department at critical times in 1998 while a company he was associated with was bidding on a lucrative oil-for-food contract. 

The main conclusions are unambiguous, said the panel. The organization requires stronger executive leadership, thoroughgoing administrative reform, and more reliable controls and auditing. 

Mr. Volcker told reporters that unless changes are made quickly, the United Nations' credibility is at stake. 

The finely parsed study of the administration of the seven-year, $64 billion humanitarian aid program said it was not clear who was actually in charge. 

Mr. Annan told the panel that Benon Sevan, administrator of the program, worked for the 661 Committee -- named for the resolution which created it -- which was made up of Security Council diplomats. But council members said most elements of the program were run by the U.N. permanent staff, known as the Secretariat. 

Either way, Mr. Annan assigned day-to-day oversight of the program to his deputy, Miss Frechette, who in turn claims never to have seen the March 1998 memo making her responsible. 

Mr. Volcker also chastised the Security Council for politicized decision-making, tolerating large-scale oil smuggling and kickbacks, and failing to confront Saddam on obvious violations. 

Beyond the $1 billion skimmed from the program, Saddam managed to smuggle some $10 billion to neighboring countries, the report said. Security Council members overlooked the smuggling to compensate Jordan, Syria, Iran and Turkey for the loss of legitimate trade with Iraq. 

In Washington, lawmakers seized on the findings to bolster demands that the United Nations expand its oversight and audit offices, and adopt new ethics codes for senior officials. 

The test of commitment to U.N. reform will be the willingness of top U.N. officials, including the secretary-general, to accept responsibility for the fraud, abuse and mismanagement identified in the report, said Sen. Norm Coleman, Minnesota Republican. 

Now is the time to clean house at the U.N. Kofi Annan should resign and allow a new team to implement a new commitment to accountability and transparency. 

U.S. Ambassador John R. Bolton said Washington would review the report with one principal purpose in mind -- to see how we can use the findings and recommendations made in your report to reform and improve the United Nations. 

Mr. Annan described the report as painful for all of us and immediately accepted responsibility for those shortcomings attributed to him. But he promised no firings or resignations in connection with the report's findings. 

He was faulted in particular for failing to order a credible investigation of whether a contract was improperly awarded to Cotecna Inspection Services SA, the Swiss firm that employed his son. 

The report also said Kojo Annan used his father's name in late 1998 to buy a $40,000 Mercedes and ship it to Ghana, securing a $6,500 diplomatic discount and saving another $14,100 in duties. 

He will have to speak for himself, Mr. Annan told reporters. 

Mr. Volcker exhorted national courts to pursue their own citizens and corporations where crimes were committed, but indicated they may not be able to count on assistance from his committee. 

Many documents such as Swiss banking records were provided to the committee in confidence and cannot be shared, he said. He said his team was going through the papers to determine what could be made public.