A Road Map for Our Inquiry
How we'll get to the bottom of the U.N. Oil for Food scandal.

By Paul A. Volcker
July 7, 2004
Wall Street Journal
http://www.opinionjournal.com/extra/?id=110005320

The multibillion-dollar Oil-for-Food Program of the United Nations, in operation from 1996 to 2003, was designed to provide humanitarian assistance to an Iraqi population suffering grievously under the regime of Saddam Hussein. The central idea was to permit exports of Iraqi oil only so long as the financial proceeds were used for the purchase of food, medical supplies and, after a time, other essential imports for the Iraqi people. 
Grave charges have been made that, whatever the humanitarian purposes, billions of dollars were lost in the process, $4 billion to $5 billion by a preliminary estimate of the U.S. General Accounting Office. Critics have cited evidence of failures of effective oversight by the U.N. and its agencies. Examples have been published of underpayments for oil sales, overcharging for poor quality food and medicine, and imports of nonessential goods. A systematic pattern of kickbacks and bribery is alleged to the benefit of Saddam, his friends and others, extending even to charges of corruption by at least one senior U.N. official. 
All of that has cried out for investigation: independent, impartial and intensive. Responding to that demand, U.N. Secretary-General Kofi Annan asked me to chair a three-person Independent Inquiry Committee, a request backed by the secretary of state and the U.S. ambassador to the U.N. I and my two associates, Justice Richard Goldstone of South Africa and Prof. Mark Pieth of the University of Basel, agreed only after being given assurances of freedom for staffing and decision-making, adequate finance, support facilities apart from the U.N. itself, and unfettered access to U.N. staff and records. Importantly, the Security Council, in supporting the investigation, has called for full cooperation by all member states. 
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I realize questions have been raised in the press and by some in the Congress as to whether an investigation undertaken at the initiative of the U.N. can be truly independent and dependably financed. There have been demands for parallel or competing investigations. 
To a point, that is natural and constructive. Governing authorities in Iraq will want to trace and recover lost funds. Prosecutors in the U.S., and hopefully in other countries as well, will want to investigate companies that may have been engaged in corrupt business practices violating their laws. Clearly, there are opportunities--indeed there is a necessity--for constructive cooperation between our committee investigators and those authorities. Appropriate memorandums of understanding with a number of official investigatory bodies are in place or in negotiation. 
There is another reality. It is, after all, only the Independent Inquiry Committee that I chair that has the mandate, the international framework and, I believe, access to resources, both human and financial, to provide the kind of comprehensive fact-finding and analysis the investigation requires. 
We mean to discharge that responsibility as carefully and as expeditiously as possible. Moreover, we recognize the concerns of Congress and the press that the committee achieve in fact full access to the evidence, that the necessary financing is provided, and that member-state cooperation is forthcoming. Oversight in those respects is welcome. We are conscious of our responsibility to provide a full public report of our findings and recommendations, insofar as possible to disclose the evidence for those findings, and to provide interim reports. 
What we cannot do is impair the objectivity and necessary confidentiality of the investigative process by responding to requests for information in our possession prematurely, before determining that such release is consistent with our investigative requirements. That approach is fully consistent with accepted practice for investigations into institutional malfeasance and possible criminal activity. Certainly, witnesses who may wish to provide sensitive information in confidence deserve to have that assurance and protection. Those considerations apply with extra force to an investigation so charged with institutional and political implications as the Oil-for-Food Program. Selective leaking of isolated facts, quasi-facts and even facts of questionable origin are hardly helpful. 
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The doubts raised by a few about our staffing and financing are unwarranted. Contrary to the implications of some press reports, the $4 million promptly provided by the U.N. in response to our request is only for start-up costs, pending our determination of requirements over time. 
The stature and integrity of my fellow committee members are without question. Justice Goldstone, in the midst of violence in South Africa at the end of apartheid and at personal risk, successfully investigated corruption in the police and army. He has prosecuted human-rights violators in both Bosnia and Kosovo. Prof. Pieth, well known internationally as a leading expert on organized crime, money laundering and corporate corruption, is widely credited with successfully negotiating among all OECD countries a convention on corporate corrupt practices much along the lines of U.S. law. That achievement quite fortuitously should help our investigative efforts. These are not men to be easily swayed by parochial institutional or political considerations. 
There is a happy outcome to our intensive search to find and attract strong people to conduct the investigations. On June 15, we were able to announce a full complement of senior staff, with a truly exceptional mix of experience and diversity. 
Reid Morden, a former director of the Canadian Security Intelligence Service and deputy foreign minister, with subsequent experience in private investigative work, will serve as executive director. Michael Cornacchia and Mark Califano, the committee's chief investigative counsel and chief legal counsel respectively, will spearhead the investigative process. Both bring extensive experience from U.S. Attorneys' offices in successfully supervising large securities and transnational fraud investigations. As the committee's chief of forensic services, Frank Hydoski, a former head of the forensic technology practice of PricewaterhouseCoopers, is rapidly developing a strong team to organize and analyze the vast records within the U.N. and its agencies. A small European office will be headed by Laurent Kasper-Ansermet, a highly experienced Swiss investigative magistrate who is familiar with legal practices and investigative resources in continental Europe. As counsel to the committee, Susan Ringler, fresh from the World Bank's team concerned with institutional integrity, will help guide the investigatory practices. 
Liaison with Baghdad authorities has been developed with the assistance of former Ambassador Richard Murphy, longtime Chairman of Credit Suisse First Boston John Hennessy, and investment banker/investigator Walter McCormack. 
The simple fact of the matter is that the committee is now building a staff that, to the best of my knowledge, cannot be matched in breadth of experience, in diversity of relevant background, in direct familiarity with complex and international fraud investigations, or in its ability to reach beyond national and conventional legal processes--including full access to U.N. personnel and records. 
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Our aims are simple to state. They will be challenging to achieve. 
As a matter of priority, we seek to answer conclusively the allegations of corruption within the U.N. professional staff. We aim to provide, hopefully in six to eight months, the truly definitive report on the administration of the Oil-for-Food Program. In conjunction with responsible Iraqi and other national authorities as appropriate, we want to trace corrupt contractors and ill-gotten funds wherever they may be found. The chips will fall where they may. At the end of the day, our hope and belief is that the truth will better enable the U.N. to go forward, with reforms as necessary, and provide the forum for international cooperation that we need and in which all of us can have confidence. 
Mr. Volcker, former chairman of the Federal Reserve, is chairman of the Independent Inquiry Committee into the U.N. Oil-for-Food Program. Those with information are invited to contact the committee at info@iic-offp.org. 
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