View Full Version : UN coverup of Oil for Food scandal

01 Jun 04,, 15:34
Annan Lashes at Critics on Iraq Oil, Food Scandal
Wed Apr 28, 2004 04:12 PM ET
By Evelyn Leopold
UNITED NATIONS (Reuters) - Secretary-General Kofi Annan on Wednesday called accusations against U.N. staff of allowing corruption by Saddam Hussein's regime "outrageous and exaggerated" and rejected conflict-of-interest charges involving his own son.

In his strongest comments to date on the burgeoning oil-for-food scandal, Annan said U.N. officials were blamed for Saddam's smuggling of oil and a variety of other misdeeds that they had no way of controlling.

"We had no mandate to stop oil smuggling," Annan told a news conference. "They were driving the trucks through northern Iraq to Turkey. The U.S. and the British had planes in the air. We were not there."

He called some of the comments he read "constructive and thoughtful." But he said: "Others have been outrageous and exaggerated. In fact, when you look at it, if you read their reports, it looks as if the Saddam regime had nothing to do with it. They did nothing wrong. It was all the U.N."

The General Accounting Office, the investigative arm of the U.S. Congress, says Iraq was estimated to have smuggled $5.7 billion in oil outside the U.N. program. It said that Iraqi elites pocketed another $4.4 billion by imposing illegal surcharges on oil sales.

The U.N.-run oil-for-food program, which began in late 1996 and closed last year, allowed Iraq to sell oil and buy civilian goods to ease the impact of 1991 Gulf War U.N. sanctions on ordinary Iraqis.

Annan said that if corruption against any U.N. official proved true, he would not hesitate to lift diplomatic immunity. He has appointed a three-member panel, led by former Federal Reserve Chairman Paul Volcker, to probe the allegations.

Among media charges was a conflict of interest because Annan's son worked for the Geneva-based firm Cotecna. The company in December 1998, was awarded contract to monitor Iraqi imports under the oil-for food program after a British firm withdrew its agents because of U.S. bombing.

Kojo Annan joined the company as a trainee in Geneva in December 1995 and then worked in Nigeria and Ghana. He submitted his resignation on December 15, 1997, which went into effect on February 28, 1998.

Annan said his son had joined Cotecna "before I became secretary-general, as a 22-year old trainee" and went to work in West Africa.

"Neither he nor I had anything to do with the contract with Cotecna," Annan said. "That was done in strict accordance with U.N, rules and financial regulations. The panel investigating this issue will look into it thoroughly and issue a report that I hope will clarify the issues."

Most of the misdeeds in the scandal were reported over the years to a Security Council committee that supervised the program, particularly the smuggling of oil, surcharges from oil dealers and shoddy goods Baghdad had ordered. But political divisions often prevented action.
New since the fall of the Saddam are lists of bribes to government officials, firms and groups around the world of oil vouchers they could sell. On the list is Benon Sevan, the head of the oil-for-food program, who has vigorously denied it.

On Wednesday, John Ruggie, a Columbia University professor and former U.N. adviser, questioned whether some of the charges had an anti-U.N. agenda in testimony to the U.S. House of Representatives International Relations Committee.

He said the U.N. Security Council had oversight of the program and approved some 36,000 contracts.

"Yet, as best as I can determine, of those 36,000 contracts not one -- not a single solitary one-- was ever held up by any member on the grounds of pricing," he said.

Because support for the sanctions was rapidly eroding, Ruggie said "it seems reasonable to infer that the U.S. and Britain held their noses and overlooked pricing irregularities in order to keep the sanctions regime in place."

Reuters 2004. All Rights Reserved.




April 28, 2004 -- ANYONE who pines for genuine international multilateralism would do well to follow the bribes now being uncovered in the United Nations' Oil-for- Food scandal.
Why did France and Russia oppose efforts to topple Saddam Hussein's regime? And why did they press constantly, throughout the '90s, for an expansion of Iraqi oil sales? Was it their empathy for the starving children of that impoverished nation? Their desire to stop the United States from arrogantly imposing its vision upon the Middle East?

It now looks like they it was simply because they were on the take. Saddam was their cash cow. If President Bush has suffered some discredit over his apparently false - but not disingenuous - claims of Iraqi weapons of mass destruction, the lapse is minor compared to the outright personal selfishness and criminality that appears to have motivated many of those who opposed his efforts to rid the world of one of its worst dictators.

Throughout the '90s, France and Russia badgered the United States and Britain to increase Iraqi oil production. President Bill Clinton and Prime Minister Tony Blair fought them at each step, but then reluctantly gave way. First Iraq was allowed to sell 500,000 barrels daily. Then, on Franco-Russian insistence, it was raised to 1 million, then to 2 million and, finally, to 3 million barrels a day.

Each time, America and Britain - the nations now accused of coveting Iraqi oil - resisted the increases in Iraqi production and urged tighter controls over the program. Each time, the French and the Russians prattled on about the rights of Iraqi sovereignty and the need to feed the children.

Now we know why the French and Russians were so insistent. Iraqi government documents (leaked to the Baghdad newspaper Al Mada) list at least 270 individuals and entities who got vouchers allowing them to sell Iraqi oil - and to keep much of the money. These vouchers, and the promise of instant great wealth they carried with them, bought vital support in the United Nations to let Saddam stay in power.

The list of those receiving these bribes includes France's former French Interior Minister Charles Pasqua (who's a leader of Chirac's party) and Patrick Maugein, the head of the French Oil firm Soco International. France's former U.N. ambassador, Jean-Bernard Merimee, got vouchers to sell 11 million barrels.

In Russia, the payoff chain reached right into the "office of the Russian president." President Vladimir Putin's Peace and Unity Party also got vouchers, as did the Soviet-era Prime Minister Nikolai Ryzhkov and the Russian Orthodox Church. Nationalist leader Vladimir Zhirinovsky shared in the largesse.

Not to be left behind, the Rev. Jean Marie Benjamin of the Vatican got the rights to sell 4.5 million barrels as recompense for setting up a meeting between Iraqi Foreign Minister Tariq Aziz and the pope.

Indeed, the list indicates that Benon Sevan, the United Nations official in charge of the Oil-for-Food program. received vouchers. He denies the charge, but has decided to retire next month anyway.

At the start of the Oil-for-Food program, America and Britain proposed that the money flow only to accounts entirely controlled by the United Nations. Soon this standard was lowered to include accounts not actually controlled by the United Nations, but only monitored by it.

Then-Sen. Frank Murkowski (R-Alaska) warned that "oil is fungible" and noted that once Iraq was allowed to pump and sell it, Saddam could sell all he wanted outside of officially sanctioned channels and nobody could tell which black liquid was legal and which not. But nobody imagined that there were actual bribes going to specific French, Russian and U.N. officials as part of the program.

Now it appears that Secretary-General Kofi Annan's sanctimonious posturing may have concealed oil bribes which reached high up in the ranks of the U.N. organization itself.

The defect of international coalitions is that they include the just and the unjust, the bribed and the honest, the democratic and the autocratic. And their members cannot be trusted equally. The group that stood up and backed the invasion of Iraq was nicknamed "the Coalition of the Willing." Now it appears it was also "the Coalition of the Honest."





May 4, 2004 -- WASHINGTON - The United Nations yesterday threw up a stone wall in the oil-for-food scandal, insisting that contracts between the world body and private companies should not be turned over to investigators.
In a defiant move that has infuriated probers, Secretary-General Kofi Annan threw his support behind a letter from former oil-for-food head Benon Sevan to officials of a Dutch company that inspected Iraqi oil shipments. The letter directed the company not to hand over documents to congressional committees and other "governmental authorities."

Sevan's shocking April 14 letter sternly reminded the company, Saybolt International, that details of its contract with the United Nations are confidential "and we would not agree to their release."

The letter was especially eye-opening because it came from Sevan, who is under investigation for accepting sweetheart oil contracts from Saddam Hussein and who supposedly was on vacation, pending retirement, when it was written.

Annan appeared taken by surprise when he was confronted with the letter on NBC's "Meet the Press" Sunday and said he did not see why Sevan "was involved in sending a message like this."

But yesterday, Stephane Dujarric, spokesman for Annan, told The Post that the letter was written by another official on Sevan's stationery and that the official was following advice of U.N. lawyers.

"The letter follows standard U.N. legal procedure," which mandates that companies cannot give documents about contracts with the United Nations to outside governmental agencies without the approval of the United Nations, Dujarric added.

The Annan spokesman said other companies participating in the $100 billion humanitarian-aid program received similar letters and that all documents will be reviewed by former Federal Reserve Board Chairman Paul Volcker, who is investigating charges of corruption within the program.

"This is disturbing," said a congressional investigator.

"U.N. officials are talking about transparency in this investigation and yet they appear to be thwarting efforts to get the relevant documents. What does that say?" the investigator added.


May 6, 2004 -- U.N. Secretary-General Kofi Annan talks grandly of "transparency" in the so-called probe of the world body's festering Oil-for- Food scandal - but don't believe a word of it.
For he seems to be running a coverup.
Benon Savan - the former Oil-for-Food boss, whose name appears on a list of foreigners bribed by Saddam Hussein's regime and who has been on a mysterious "vacation" pending retirement since the scandal broke - has ordered the program's contractors not to cooperate with requests for information.

Even if officials proceeding in Savan's name are merely foot-dragging, a stonewall is a stonewall.

Specifically, two letters signed "for Benon V. Savan" have come to light, each ordering a company with material knowledge of the scandal not to share any details with investigators.

One of those companies, the Swiss firm Cotecna, had employed Annan's son Kojo on its payroll as a "consultant" when the Oil-for-Food rip-offs began.

And Kofi Annan's official spokesmen admit that the secretary-general has personally approved blocking the sharing of relevant Oil-for-Food details with investigators. Perhaps an unfettered probe would get a little too close to home?

Meanwhile, the U.N. Secretariat - which administered the Oil-for-Food program - refused to provide a number of audits to Congress.

Still awaiting his own copies of these (and other) critical documents is former Federal Reserve chairman Paul Volcker, hired by Annan to conduct a separate, parallel investigation of the scandal.

Good luck to Volcker, too - for it has become crystal clear that Annan & Co. have every intention of fighting every honest effort to shed sunlight on the scandal.

The latest line from Turtle Bay is that the Oil-for-Food mess isn't really a scandal at all, just an anti-U.N. plot inspired by "right-wingers" - or, alternatively, by former Iraqi exile Ahmed Chalabi.

Those are shameful lies.

In fact, the Iraqi Governing Council has been probing the mess since January, when the Baghdad newspaper Al-Mada published its now-famous list of the 270 officials from 44 countries who were bribed with oil vouchers by Saddam (see above: Benon Savan).

Indeed, reports of massive corruption in the $46 billion program began years before the liberation of Iraq opened government records to inspection.

And only last weekend Jalal Talabani, a Kurdish leader on the Governing Council, announced that the body has obtained larger and more comprehensive lists of individuals, companies and governments that received suspicious payments from U.N.-supervised oil sales.

This hasn't stopped ardent advocates of a U.N.-administered Iraq from trying to wish the scandal away. The New York Times, for example, has consistently editorialized for a U.N. takeover - and simply refused to cover the Oil-for-Food scandal for weeks after it first broke.

No talk of right-wing plots can alter the plain truth:

* That much of the food, hospital supplies and other humanitarian goods that were supposed to be bought with Oil-for-Food funds never were, because contractors overcharged the program and kicked back a percentage of the proceeds to Iraqi officials.

* That fully half of the 13 percent of Oil-for-Food revenues that were supposed to go to the Kurds living in the northern No-Fly Zone - some $4.4 billion - is still unaccounted for. The money seems to have been hijacked by Saddam's officials while U.N. "watchmen" turned a blind eye.

* That the Oil-for-Food office never transferred its database to the Coalition Provisional Authority - despite Benon Savan's assurances to the Security Council that it had done so.

* That many Oil-for-Food contractors turned out to be false fronts or non-existent when the CPA tried to contact them.

* That Oil-for-Food funds meant for a full range of humanitarian projects were instead diverted to pay for luxury cars and the construction of an Olympic Stadium for Saddam's son Uday - a project that Kofi Annan personally approved.

* That the United Nations can't begin to explain how all of this happened, or how its oversight system failed.

Assuming, of course, that the United Nations ever intended for the oversight system to work in the first place.

One way or another, it's time to find out.

Happily, the much-maligned (by Democrats) Patriot Act contains the tools needed to pry open some of Turtle Bay's box of dirty secrets.

Here's how it could work:

It's beyond dispute that Saddam Hussein paid money to the families of Palestinian suicide bombers.

And there is evidence that Saddam had financial and other ties to al Qaeda terrorists. For example, two firms doing business with Saddam via Oil-for-Food are reportedly linked to a financier associated with Osama bin Laden.

Since Oil-for-Food was Saddam's chief source of cash, it's safe to assume that the money he lavished on terrorists came from program kickbacks processed along with other Oil-for-Food revenues by BNP Paribas - a powerful French commercial bank chartered to do business in New York state.

Now, Kofi Annan may manage to keep U.N. information away from investigators - but you can be sure that BNP Paribas kept a full set of discoverable books.

And the Patriot Act grants Treasury Secretary John Snow substantial power to investigate U.S.-chartered banks suspected of having been involved - knowingly or otherwise - in terrorist activity.

Paribas may not have consciously bankrolled Osama.

But Snow nonetheless can subpoena its records to find out how much of Saddam's ill-gotten cash passed through the bank - and where it went.

And he has the power to look at all of the bank's Oil-for-Food dealings since the passage of the Patriot Act.

That's precisely what he needs to do.

And to hell with Kofi Annan's stonewall.


Cover-Up Culture
When will the real Oil-for-Food investigations begin?

Claudia Rosett is a senior fellow with the Foundation for the Defense of Democracies, and an adjunct fellow with the Hudson Institute. She is also an NRO contributor.

You have to admire the resilience of the United Nations. In theory, the U.N.'s Oil-for-Food relief program for Iraq, which ran from 1996-2003, is now the subject of at least five investigations into billions worth of alleged fraud and corruption. In practice, however, while U.N. Secretary-General Kofi Annan dismisses well-founded allegations as "outrageous," and President George W. Bush chalks out a big new role for the U.N. in Iraq, it is the investigators themselves who are now largely stalled, stymied, carefully contained, or even attacked.

The attacks have not been limited to the U.S.-led armed raid last Thursday on the Baghdad home and office of Iraq Governing Council (IGC) member Ahmed Chalabi, in which by Chalabi's account in a phone interview with me later that same day U.S. forces seized documentation incriminating to U.N. officials "on every level." There has also been the harassment recently of a British adviser to the IGC, Claude Hankes-Drielsma. This past February, Hankes-Drielsma lined up KPMG International, an accounting firm, together with Freshfields Bruckhaus Deringer, a law firm, to carry out an audit of Oil-for-Food for the IGC. He testified before Congress last month that the KPMG investigation "is expected to demonstrate the clear link between those countries which were quite ready to support Saddam Hussein's regime for their own financial benefit, at the expense of the Iraqi people, and those that opposed the strict application of sanctions and the overthrow of Saddam." (Security Council members France, Russia and China come to mind.)

Last Thursday, the same day as the raid on Chalabi, an as-yet unidentified person hacked into Hankes-Drielsma's computer and deleted all the files, as Hankes-Drielsma recounted to me in a phone interview. The computer expert called in to cope with damage "said he'd never seen anything quite like it. They deleted even the backup files," says Hankes-Drielsma. Asked if he has been physically threatened as well, Hankes-Drielsma, says, "No comment."

Whatever the circumstances surrounding Chalabi, it ought to be obvious that he, the IGC, and Hankes-Drielsma deserve credit for being the first to call for an investigation into Oil-for-Food, something even Annan after much stonewalling finally conceded this past March was necessary. But the KPMG audit begun in March at the behest not only of Chalabi, but the entire IGC, has been stalled for almost two months now by the refusal of Paul Bremer, administrator of the Coalition Provisional Authority in Baghdad, to approve the necessary funding. The funding requested for this project by Iraq's Governing Council, from Iraq's own public money, is $5 million. That is miniscule compared to the $111 billion worth of Saddam's oil sales and "relief" contracts overseen under Oil-for-Food by the U.N., or $1.4 billion commission paid by Saddam to Annan's Secretariat for administering the program, or the billions grafted out of the program which the KPMG investigation proposes to trace and as far as possible restore to Iraq's citizens.

But the cost of KPMG's services is hardly the real issue. The crucial effect has been to greatly delay any professional investigation in Baghdad, home of abundant documentation kept by Saddam on Oil-for-Food. The KPMG team was due to issue a preliminary report by early June. That won't happen. Instead, as outlined in a draft U.N. resolution now being sent around by the U.S. and U.K., Iraq's public money, including funds to cover relief contracts leftover from Oil-for-Food, will be handed back on June 30 to an interim Iraqi government now being assembled by U.N. special envoy Lakhdar Brahimi. In other words, the still-uninvestigated U.N. will again have a hand in deciding who oversees the remains of Oil-for-Food. If Annan is serious about his claims of U.N. transparency, he ought to provide his man in Iraq, Brahimi, with a business card that reads: Conflicts-of-Interest-R-Us.

What of the other investigations? Bremer has decided the CPA should replace the Iraqi-commissioned KPMG audit with one to be conducted by Ernst & Young with an official announcement imminent. Thursday. According to an Ernst & Young spokesman, that project hasn't even had a chance to get off the ground.

Then there's the U.N.-authorized investigation, headed by former Fed Chairman Paul Volcker, who has promised as "careful, unbiased, independent an investigation as we can do." This mission may test Volcker's limits. More than two months have passed since Annan on March 19 agreed to call for an investigation, and the real investigating seems barely begun. Speed might have helped secure access to vital documents, especially in Baghdad. Instead, there has already been much delay. It took Annan a month to assemble the Volcker panel, and it took another month before the Volcker team was able to start settling into offices in New York, and start hiring staff, collecting documents, and hooking up phones. During this interval, the U.N. Secretariat was busy sending out letters to vital Oil-for-Food contractors, reminding them to keep quiet about Oil-for-Food.

Annan has promised to turn over to Volcker whatever he wants. But Annan's Secretariat made similar statements last fall about having turned over all Oil-for-Food records to the CPA, and then as it turned out failed to deliver important documents, including bank records. Volcker, lacking the power of subpoena, will have to depend on the good graces of sources who may in many cases be subjects of the investigation including, one might assume, a number of folks hailing from Security Council member states Russia, France, and China, favored under Oil-for-Food by Saddam.

Nor do the surroundings of the Volcker team bode well for either the independence or agility of the U.N.-authorized investigation. Last Thursday, Volcker spoke to the press in the U.N. briefing room, introduced by Annan's spokesman. His office is on U.N. premises, U.N. staffers have reportedly been helping with logistics, and the investigative team's business cards and website carry the U.N. logo. This hardly seems the kind of arm's-length stance one might expect of an independent inquiry. And all those U.N. trappings might just act as a deterrent for anyone interested in providing an anonymous tip especially members of the U.N.'s own staff.

Beyond that, there are assorted congressional inquiries, stymied by lack of access to vital information. For example, Annan has refused to release either to the Security Council or to Congress the U.N.'s internal audits of the Oil-for-Food program. When one of these leaked last week, packed with information about waste and violations of U.N. rules and responsibilities, Rep. Henry Hyde (R., Ill.) wrote to Annan: "The U.S. Congress which provides 22 percent of the U.N.'s budget and which has publicly requested copies of the 55 internal audits should not be required to depend on media leaks for source documents." Rep. Christopher Shays (R., Conn.) has been trying to pry documentation on Oil-for-Food from Secretary of State Colin Powell and answers about the stalled KPMG investigation from Bremer. In sum, Congress has its hands full at the moment simply trying to get past the U.N. and U.S. administration's cover-ups of the original cover-up in which Oil-for-Food allowed Saddam's corrupt deals to masquerade as relief.

Finally, there is the U.S. Treasury's hunt for Saddam's illicit assets. Treasury is not focused specifically on Oil-for-Food, and perhaps for that reason has been permitted to get somewhere. In April, Treasury designated one of the many Oil-for-Food contractors, Dubai-based Al Wasel & Babel, as a front company for senior officials of Saddam's own regime. Earlier this month, Treasury named the Commercial Bank of Syria as a conduit for about $1 billion in funds illegally diverted from Oil-for-Food. But none of this sheds light specifically on the U.N., nor has Treasury offered much in the way of further detail.

In sum, we have Treasury not quite focused on Oil-for-Food, the KPMG investigation stalled, Congress stymied, the Volcker inquiry only just begun, and the Ernst & Young audit not yet started. So, is it time to write off the likelihood that anyone will ever get to the bottom of Oil-for-Food? Hardly. Volcker has plenty at stake after a long and respected career, he has placed his own reputation on the line, and we might yet hope that this will help overcome his current surroundings. Hankes-Drielsma says that KPMG, given any chance, is willing to proceed with the investigation already begun. And Oil-for-Food, overall, was simply too enormous and too rotten to stay stuffed under a rug. Information will almost certainly continue to seep out. Right now, amid all the high and mighty talk about a clean and transparent new start for Iraq, would be a good moment for both the U.N. and the White House to reconsider the perils of cover-ups.


Sex, drugs and peace missions book riles UN chiefs
Tuesday June 1st 2004 - Irish Independent

THREE United Nations fieldworkers are publishing details of sex, drugs and corruption inside UN missions, despite a UN attempt to block their book.

'Emergency Sex and Other Desperate Measures: A True Story from Hell on Earth' chronicles the experiences of a doctor, a human rights official and a secretary in UN operations in Cambodia, Somalia, Haiti, Rwanda, Liberia and Bosnia.

The controversial volume, due out next week, charges that some UN officials demanded that 15pc of their local staff's salaries go directly to them instead; that Bulgaria sent freed criminals to serve as peacekeepers and that incompetent UN security has cost lives.

Their first-person account of a decade in UN service also includes candid details of drug use - particularly a marijuana cocktail called "The Space Shuttle" - and casual sex."Almost a million civilians [whom] our peacekeepers were supposed to protect died in two genocides," Andrew Thomson, one of the co-authors said.The three fieldworkers do much good work - monitoring elections in Cambodia, visiting a Haitian prison, exhuming a mass grave in Bosnia - and the book never quite overcomes their latent sense of self-congratulation.

But as they are hurled into one crisis after another they become increasingly demoralised.

Particularly galling to them is the murder in Mogadishu in Somalia of a young American colleague, shot dead as he rode in a UN convoy.

Kenneth Cain, an American human rights official, complains bitterly that the board of inquiry ignored failings in UN security.

"The board is stacked with UN officials who oversee security," he writes. "I don't trust these f***s for a second to truly investigate and hold one of their own accountable."

After he is evacuated from Haiti because of worsening violence, Dr Thomson advises readers: "If blue-helmeted UN peacekeepers show up in your town or village and offer to protect you, run."

Bulgaria has denied that it sent freed prisoners as peacekeepers to Cambodia but some of the other allegations in the book have effectively been substantiated.

For instance an inquiry into the bombing of the UN office in Baghdad last year found the whole UN security system to be "dysfunctional".( The Times, London)

James Bone
in New York

Irish Independent
www.unison.ie/irish_independent/ & www.unison.ie/

"O stranger passing by,
go tell the Lacedaemonians that here,
faithful to their bidding, we lie"

Epitath of the 300 Spartans at Thermopylae

The UN is who Kerry wants to hand Iraq over to, in case anyone here hasn't been paying attention.