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Oil-for-Food Report Reveals UN as Conduit of Corruption

The United Nations’ oil-for-food programme in Iraq was "tainted" from top to bottom, with officials failing to follow rules designed to ensure fairness and accountability, the man charged with investigating alleged corruption in the scheme said yesterday.

Paul Volcker, the former chairman of the United States Federal Reserve, also accused Benon Sevan, the programme director, of engaging in "an irreconcilable conflict of interest" by choosing the companies that bought Saddam Hussein’s oil. [Source: The Scotsman]

During the seven years of the Programme, $64.2 billion of Iraqi oil was exported within the Programme’s framework. As one might except, getting to the bottom of what went wrong and who did what is complicated by the distributed nature of the corruption. The Interim Report, released on Friday, is the first in a complex investigation spanning numerous countries, officials, corporations and individuals.

The allegations are threefold [Financial Times]:

That Saddam Hussein skimmed billions of dollars from the programme, enabling him to keep his grip on power.

That he circumvented sanctions by smuggling oil to neighbours, including Turkey, Jordan and Syria.

That he used the programme to "buy influence" by rewarding supporters around the world with contracts to buy cheap Iraqi oil or supply Iraq with goods at inflated prices.

Although the first two were broadly known, the third allegation surfaced when documents were found in Baghdad after the US invasion. The most serious of these, brought forth in the Deufler Report, is that individuals in countries such as Russia and France were effectively bribed to oppose US-led pressure on Iraq and undermine sanctions. What is surprising is the extent to which Saddam Hussein bribed U.N. officials and U.N. Security Counsel member countries with oil contracts in exchange for favorable treatment (sanction ending votes) and technology [more].

U.N. Secretary-General Kofi Annan said Friday he was "shocked" by an initial investigative report that found the man in charge of the U.N. oil-for-food programme made illicit oil deals.

"We do not want this shadow to hang over the U.N. So we want to get to the bottom of it, get to the truth and take appropriate measures to deal with the gaps," he told reporters at U.N. headquarters in New York. [CNN].

This was not a surprise to Annan. As stated above, the Duefler report made it clear that Saddam Hussein engaged in extensive bribery of U.N. officials including Benon Sevan, the Programme director

It should also be noted that Annan’s son, Kojo, benefited from his affiliation with the Swiss company Cotecna when it was selected to inspect the Programme. Investigations continue and Volcker plans to issue a second interim report in the coming months regarding Kojo's involvement in the scandal. [more from Newsmax]

In addition, more officials are expected to be named as the actions of the U.N. Security Council, which authorized and monitored the oil-for-food programme, are investigated. "It is not the whole story by a long shot," Volcker said after the interim report was released.

What remains suspicious is Annan's initial block of a United States Senate subcommittee investigation of fraud in the oil-for-food program [more].

It is important to ask who are the true victims of this crime? It should be obvious that it is the Iraqis who were starving and suffering from inadequate medical treatment that were victimized by Hussein, the U.N. and a multiplicity of other individuals, organizations and nations.

The Scottsman reports,

DIPLOMATS who received money from the United Nations’ discredited oil-for-food programme in Iraq were "parasites" profiting from the misery of an impoverished nation, the country’s human rights minister claimed yesterday.

Naturally, Iraq called Friday for a widening of the investigation of the U.N. oil-for-food program and demanded the immediate return of money in the U.N. account that paid for administration of the humanitarian relief effort. [more] Iraq's U.N. Ambassador Samir Sumaidaie also reiterated the government's demand that the United Nations stop using oil-for-food money to pay for the independent investigation into the program led by former U.S. Federal Reserve Chairman Paul Volcker. He said,

"Huge sums of money which should have served the needs of the Iraqi people who were suffering at that time -- a lot of these resources were squandered and misspent."

It is becoming increasingly clear the that U.N. is systemically flawed and is often used as a conduit for corruption. Now consider that Sen. Ted Kennedy recently called for the U.S. to give Iraqi oversight to the United Nations [more]. Understand the the U.N. is overseeing the billion dollar Tsunami relief efforts [more]. Think about the current involvement of the U.N. in Sudan [more here and here] and the Congo.

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