The United Nations Oil for Food program scandal continues to swell.
Recall that documents discovered after the liberation of Iraq revealed that the U.N.s self-described flagship humanitarian program was wracked with bribery, kick-backs, smuggling, under the table deals and influence peddling. Among other revelations, evidence uncovered in Baghdad implicated long-time U.N. official Benon Sevan who was responsible for managing the program and reported directly to Secretary General Kofi Annan.
The Oil for Food program was created to provide humanitarian assistance to Iraqi citizens who were suffering under economic sanctions aimed at Saddam Husseins regime. Under the program, Iraq was allowed to sell a limited amount of oil. The proceeds of these sales were to be used to purchase food and other humanitarian supplies which would be delivered directly to Iraqis.
The U.N. Secretariat was responsible for ensuring that contractors who bought Iraqi oil and sold humanitarian supplies operated within the programs rules and delivered the supplies to Iraqis. In exchange for this management, the Secretariat received a substantial commission on each sale of oil.
However, the documents show that Saddam was able to thoroughly corrupt the program and use it to line his own pockets, fund purchases of illegal weapons, pay off officials in a variety of nations and organizations and stash hidden cash in banks around the world.
Saddams booty resulted largely from a kick-back scheme involving oil sales under the program. Iraq would sell oil to Oil for Food contractors at below-market prices. The contractors could then sell the oil for a profit on the open market. Saddam secretly required that the contractors kick back a portion of the profits to him and his cronies.
At the same time, Saddam gave away "vouchers" which allowed recipients to sell Iraqi oil for millions of dollars. The vouchers amounted to bribes and pay-offs in Saddams efforts to buy friends and build a network of supporters. Recipients of Saddams largess allegedly included a former French interior minister, the present Indonesian president, a number of Russian oil companies, the Russian government, the Russian Orthodox Church and numerous reporters around the world. Nearly all of the official Oil for Food cash passed through a single French bank.
Coverage of the scandal, led by journalist Claudia Rossett, has forced the U.N. to respond. Last month, Secretary Annan named former Federal Reserve Chairman Paul Volcker to lead a U.N. investigation into the matter. Meanwhile, the U.S. General Accounting Office and Congressional committees launched separate inquiries.
But even as the investigations progress in earnest, new information and fresh U.N. action are raising additional concerns and adding to the stench of scandal.
First, while the U.N.s public response to the revelations has promised swift action, complete investigation and punishment for guilty parties, non-public U.N. actions raise serious questions about their real commitment to getting to the bottom of the scandal. U.N. actions also call into question whether there is an active cover up of evidence of U.N. corruption and mismanagement.
On May 2, Tim Russert questioned Secretary General Annan on Meet the Press about a letter from Sevans U.N. office to the Oil for Food contractor responsible for overseeing Saddams oil exports. The letter, sent shortly after Annan pledged a full investigation and denied any attempted cover up, was a pointed reminder of the companys confidentiality agreements with the U.N. and an admonition that the company was not to answer any questions about the its contract with the Oil for Food program, nor was it to provide any documents or information to anyone other than the U.N. According to the Wall Street Journal, the company had been the subject of a broad Congressional request for information. In particular, the letter specifically instructed the company not to hand over any U.N. internal audit reports. Rossett reports that the U.N. Secretariat had previously declined to share these audits with the Security Council and has refused to provide them to Congress.
The day after Russert revealed the letter, Rossett and the Wall Street Journal reported that they had obtained another letter from Sevans office. It was addressed to a Swiss company named Cotecna, responsible for inspecting humanitarian goods shipped into Iraq under the Oil for Food program. Rossett reports that Cotecna employed Secretary Annans son for nearly three years before winning its Oil for Food contract. According to the Journal, the letter warns Cotecna that all "documents and all other data compiled or received by the Contractor shall be treated as confidential and shall be delivered only to United Nations authorized officials."
In response, Secretary Annans spokesman told the Journal that while these letters looked like "a conspiracy to prevent information sharing," the letters were merely "an institutional response" prepared by the U.N.s lawyers. The spokesman also said that Sevan had nothing to do with the letters since he is away, using accumulated vacation time pending his retirement.
Even more disturbing than the U.N.s shameful response and the complicity of supposed U.S. allies France and Russia in the scandal is the possibility that Oil for Food money funded Al Qaeda and other terrorist organizations.
Rossett, reporting in National Review, recently detailed two possible links between the proceeds from the Oil for Food program and organizations with known links to Al Qaeda, and shes careful to leave open the possibility of many more as-yet undiscovered connections.
The first runs from an Oil for Food oil buyer through a front company in Liechtenstein to a bank in the Bahamas called Bank Al Taqwa. In November 2001, both the U.S. government and the U.N. publicly identified both the front company and Bank Al Taqwa as belonging to Al Qaeda, and revealed that both the company and the bank had definitive links to two known major Al Qaeda financiers.
The second ran through a now-defunct Swiss company called Delta Services, also an Oil for Food oil buyer. Delta Services was a subsidiary of a Saudi company which had close ties to the Taliban during the height Al Qaedas involvement in Afghanistan in the late 1990s.
That Saddam viewed Al Qaedas interest to be parallel with his own and sought to fund their efforts is no great logical leap. We already know that he had previously funded terrorist organizations like Hamas, and his contempt for the United States is clearly established. But the possibility that Saddam could have provided funding to Al Qaeda and other terrorists using proceeds of Oil for Food sales is incredibly disturbing.
Consider this: Osama bin Laden is believed to have funded Al Qaeda with about $300 million of family money. During its eight-year life, more than $111 billion flowed through the Oil for Food program. Bin Ladens initial contribution constitutes a mere three tenths of one percent of the total program a mere rounding error. If Saddam succeeded in routing only a few hundred million to Al Qaeda, he provided funding for sophisticated terrorist operations for decades to come.
In addition, Saddam is believed to have received nearly $5 billion in kickbacks, while no one knows how many companies and individuals benefited from his gifts of oil vouchers and below-market oil sales. Billions of dollars of illicit profits are still unaccounted for.
There are literally dozens of other elements to this growing scandal, none is reassuring. And the U.N.s response deny everything and suppress information is totally unacceptable.
The corruption of the Oil for Food program seems to suggest that the U.N.s mission of promoting peace has been replaced by an all-out effort to line its pockets and leaves little room for confidence in the organizations future humanitarian and peace-keeping efforts.
While theres little doubt that Chairman Volcker and his team will do their best to unravel the mess, there are serious questions about how much of their findings will be made public and what actions might be taken in response to their report. (The Secretary-General has said that he will drop diplomatic immunity for any U.N. official who is proved to be involved, but its unclear what level of proof he will require.)
The U.N.s only hope for salvation of its credibility lies in immediate, complete public disclosure of every shred of information about the corrupt program. Its imperative that free nations learn exactly how much money terrorist organizations received from the program. Its essential that the U.S. learn to what degree French and Russian opposition to its intervention in Iraq was motivated by Saddams payoffs. And its time for the U.N. to stop clamping down and start opening up.March 5, 2004