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Iraq: UN Panel Launches Inquiry Into Tainted Oil-For-Food Program

  • Robert McMahon --> Annan (pictured) tabbed Volcker to chair oil-for-food probe The United Nations has formally launched an inquiry into charges the oil-for-food program in Iraq was abused by UN staff and a wide range of others. The UN Security Council called on all states to cooperate with the probe, which is headed by a prominent former U.S. official, Paul Volcker. But there is doubt about how much support will come from those council states that have been closely linked to improprieties in the program.

United Nations, 22 April 2004 (RFE/RL) -- A three-member independent panel has begun a much-anticipated investigation into allegations of rampant corruption in the UN's oil-for-food program in Iraq.

The inquiry got under way yesterday after the Security Council passed a resolution calling on UN officials, member states, the U.S.-led coalition, and Iraqis to cooperate.

UN Secretary-General Kofi Annan named Volcker, the former chairman of the U.S. Federal Reserve, to head the panel. The two other members are Richard Goldstone, a former chief prosecutor for UN criminal tribunals, and Mark Pieth, a Swiss legal expert who specializes in money-laundering issues.

Volcker's stature may satisfy U.S. critics of the UN who had expressed doubts about Annan's ability to mount a credible investigation. The U.S. Congress is pursuing its own investigation of the affair, which a congressional agency says delivered more than $11 billion in illicit funds to Saddam Hussein's regime.

Volcker told a news conference at UN headquarters that a full investigation is necessary to restore the image of the United Nations.

"You can't sit on this and let it fester. You've got to get it investigated and, whatever it shows, if it shows something bad in the UN, clean it up," Volcker said.

The panel does not have the power to compel states to provide information. But it is expected to conduct numerous interviews in the coming months with firms and officials involved in bringing Iraqi oil to market and in contracting for humanitarian goods during the seven-year program.

Annan has said he will make sure the UN's privileges and immunities do not impede efforts to prosecute UN staffers linked to wrongdoing. Volcker said his first step is forming a qualified team.

"We will undoubtedly need to call upon forensic accounting talents. We will have to have investigators. We will have to have legal guidance. We have to have people who are experienced in investigative work. It's going to be a challenge," Volcker said.

Previous UN investigative panels have had some success in "naming and shaming" countries found in breach of council resolutions. This was the case three years ago, when a panel implicated a number of UN member states in illicit trade of diamonds and guns to African states under embargo.

But the newest inquiry will involve scrutiny of the 15-member council itself, especially the five permanent members who were often divided over policy on Iraq. France, Russia, and China, which had pushed for the easing of sanctions, also had many companies involved in contracting with Iraq under the oil-for-food program.

U.S. and U.K. diplomats say France and Russia, in particular, resisted their efforts to reform oil pricing under the program to eliminate kickbacks to Hussein.

Volcker declined to address any of these charges at the outset. But he said he was aware of the political stakes involved, both inside and outside Iraq.

"Some will want to constructively help, and some will want to destructively obscure, and it will be our job to try to sort our way through that," Volcker said.

The oil-for-food program was set up in December 1996 as a way of using Iraq's oil revenues for humanitarian goods, maintaining the oil sector and paying reparations from the Gulf War. It was the largest such program in UN history, overseeing the delivery of about $40 billion of humanitarian assistance.

Despite the controversy, experts have credited it with feeding about 60 percent of Iraqis and generally improving their welfare after the abysmal conditions that existed in the first years of sanctions.

Annan told reporters yesterday the positive aspects of the program should not be overlooked.

"I hope the Iraqis realize that even if there has been wrongdoing by certain members on the UN staff, the UN, as a whole, did make a genuine effort to filling their humanitarian needs. And there were hundreds of UN staff who worked very hard and diligently with the Iraqi regime to establish the food distribution system and ensure that supplies did go in," Annan said.

Allegations of improprieties had circulated for several years. But they were revived earlier this year following a report in Baghdad's "Al-Mada" daily.

The newspaper published what it said was a list of contracts, awarded by Iraq's State Oil Marketing Organization (SOMO), allocating large amounts of crude oil under Hussein's regime to about 270 foreign dignitaries and organizations. The allocations would have entitled the beneficiaries to collect a commission on the sale of the oil by middlemen.

The list of contract beneficiaries quoted by "Al-Mada" includes the head of the UN oil-for-food program, Benon Sevan. He has repeatedly denied any wrongdoing.