UN falls short on oil-for-food reform: investigator

By Sam Cage 
September 7, 2006
Reuters
Original Source: http://today.reuters.com/news/articlenews.aspx?type=worldNews&storyID=2006-09-07T201839Z_01_N07285240_RTRUKOC_0_US-UN-OIL.xml&pageNumber=0&imageid=&cap=&sz=13&WTModLoc=NewsArt-C1-ArticlePage3
BASEL, Switzerland (Reuters) - The United Nations has failed to take on board some of the key recommendations of an investigation into corruption in its oil-for-food program in Iraq, an investigator told Reuters on Thursday. 
The independent inquiry proposed reforms to prevent similar abuses in future, but at least two central tenets have not been addressed, said Mark Pieth, one of three members of the inquiry team, which was headed by former U.S. Federal Reserve chairman Paul Volcker. 
They're not really taking us seriously, Pieth, a Swiss law professor based in Basel, said in an interview. There are reforms going on that go some way, but not really as far as we would have hoped. 
In New York, U.N. chief spokesman Stephane Dujarric called Pieth's accusations somewhat unfair. 
We have taken on board a lot of the recommendations, both in letter and spirit, of the Volcker panel, Dujarric said. 
In its final report, the U.N. investigation accused more than 2,200 companies in 40 countries of diverting $1.8 billion to former Iraqi leader Saddam Hussein's government under the $64 billion program. 
Volcker's probe of the now-defunct humanitarian program castigated top U.N. officials for tolerating corruption and faulted the Security Council for ignoring $11 billion in smuggled oil and other illicit earnings outside the program, a violation of U.N. trade sanctions. 
Volcker will hold a news conference in New York later this month to launch a book on the investigation and, Pieth said, to ask the question, what has the U.N. really done?  
The Volcker inquiry said the United Nations needed a truly independent audit committee. It has established a panel, but it has only one independent member.
WEEDING OUT INCOMPETENCE
Basically it's an in-house board -- and that's not really what we meant, Pieth said.
The inquiry also said the United Nations needed to weed out and remove incompetent employees, but this has not been done. 
It's very difficult, it goes against the spirit of the institution, but that's what we're demanding, Pieth said. If you don't have competent people you have to have the liberty to replace them.
The UN's Dujarric said U.N. Secretary-General Kofi Annan required the General Assembly's approval to alter the audit committee's structure, which had not been granted.
The 192-nation assembly also rejected Annan's request for more independence in making personnel changes, he said.
The oil-for-food operation began in December 1996 and ended in 2003. It was intended to ease the impact on ordinary Iraqis of U.N. sanctions imposed after Saddam Hussein's troops invaded Kuwait in 1990.
Pieth said the Paris-based Organization for Economic Cooperation and Development will now report regularly on the status of investigations in its developed-country members.  
Some governments are reluctant to disclose publicly which companies they are investigating for corruption or breaking the U.N. embargo on Iraq and the OECD will encourage them to contribute to an overall summary of oil-for-food probes, he explained.
Some 500-1,000 cases mentioned in the Volcker inquiry's final report are clear-cut cases of corruption, Pieth said.
(Additional reporting by Irwin Arieff at the United Nations)