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| Wednesday, 19 May 2004 |
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The UN's oil-for-food row "If there is truth to the allegations that the Iraqi regime, with assistance from UN officials in some cases, wrongfully acquired $10.1 billion through smuggling oil, oil-sale surcharges, and illegal commissions on oil-for-food contracts, this represents a scandal without precedent in UN history," says Henry Hyge, Chairman of America's Congressional Committee on international relations.
A fellow Republican Congressman, Christopher Shays, who chairs the government-reform sub-committee, goes further. The alleged bribes, surcharges and other improprieties surrounding the UN's oil-for-food programme that was worth a total of $67 billion could, he says, turn into "the biggest scandal ever". Ahmed Chalabi, a member of Iraq's American-appointed Governing Council (GC) calls it "the biggest political bribery scandal in history." And so it goes on. But so far little hard evidence has come to light beyond a list of 265 supposed beneficiaries of the former Iraqi dictator's illicit largesse in 52 countries, including all five permanent members of the UN's Security Council. Among those named are Indonesia's President Megawati Sukarnoputri; Charles Pasqu, a former French Interior Minister; and Benon Sevan, who ran the UN's oil-for-food programme. All deny any wrongdoing. There are dark hints that Kofi Annan, the world organisation's Secretary General, could find himself compromised. Much has been made of the fact that his son, Kojo, worked for a company that won a juicy contract under the oil-for-food programme. (He did, but left before the contract was awarded). France and Russia have been accused of opposing the war in Iraq because influential individuals in those countries did not want to lose their bribes. Some even suggested that the UN itself, which received more than $1 billion for administering the six-year programme, may have been loth to see the end of such a lucrative source of income. Under the programme, set up in 1995 to alleviate the hardship caused by the UN's economic sanctions against Iraq, Mr. Hussein was allowed to sell limited amounts of crude oil (the ceiling was removed in 1999) in order to pay for food, medicine and other essentials. Still a sovereign country, Iraq was permitted to choose to whom it sold its oil and from whom to buy goods. But the oil buyer had to pay the price, approved by the UN sanctions committee, into a UN escrow account. Part of that cash was then used to pay for food and drugs, again supervised by the UN sanctions committee, which included representatives of all 15 Security Council members. But from the outset Mr. Hussein managed to skim off nearly $2 billion a year into his own pockets, both by running extensive smuggling operations outside the oil-for-food programme and by demanding kickbacks from purchasers and suppliers within the scheme. He also allegedly gave allocations of oil at discounted rates in the form of vouchers, which could be resold at a handsome profit in return for favours; goods not permitted under the oil-for-food programme, political support on the world stage, and so on. Why blame us? Much of this has been known for at least three years. What is new is the magnitude of the scam and the naming of people and organisations allegedly involved in the voucher scheme. A senior UN official acknowledges that it was "entirely possible, indeed probable" that the former Iraqi dictator used loopholes in the programme to extract kickbacks. But because of the scheme's complexity, he says there was no way of knowing anything about this. Member states, not the UN, were supposed to police smuggling. Many UN officials suspect that today's campaign is intended to discredit the UN so as to make a future role for it in Iraq impossible. Foremost among the UN's accusers is Claude Hankes-Drielsma, a British financial adviser who was appointed by his old friend, Mr. Chalabi, who chairs the finance committee of the GC in Iraq, to advise it on its investigations into the affair. Mr. Hankes-Drielsma's allegations have been seized on eagerly by American neo-conservatives who have long regarded the UN as little more than a costly and corrupt talking-shop. Mr. Chalbi has long been their candidate to rule the new Iraq. In evidence to the Shays committee, Mr. Hankes-Drielsma said that the UN oil-for-food programme had provided Mr. Hussein "with a convenient vehicle through which he bought support internationally by bribing political parties, companies, journalists and other individuals of influence". This, he said, had secured the support of dozens of countries, including key Security Council members. "The very fact that Saddam Hussein, the UN and certain members of the Security Council could conceal such a scam from the world should send shivers down every spine in this room," he said. He asked the United States and Britain to set up a "complete review of the UN, its function, and how it might operate effectively and with integrity". Mr. Hankes-Drielsma may have jumped the gun. Nothing, so far, has been proved, certainly not as far as the UN is concerned. His evidence and nearly all the other allegations against the UN have so far been based on documents found in Iraqi government archives. But no one, other than he and the GC's 25 members, has been or authenticated the documents. No fewer than seven inquiries have been set up in an attempt to get to the bottom of this murky affair: three by American congressional committees; one by America's General Accounting Office, Congress' investigative arm; one by the Iraqi GC; another by Iraq's American-led Coalition Provisional Authority, itself due to be dissolved by the June 30th, when the Americans are supposed to hand over government to Iraqis; and yet another, announced last week, by the UN itself, to be chaired by Paul Volcker, a former head of America's Federal Reserve. "You can't sit on this and let it fester," Mr. Voicker said. "You have to get it investigated, whatever it shows. What is important is finding out whether there's any substance (to the allegations). If there's not, and we've done as good an investigation as we can, that helps repair the damage. If there is, get it out there, get it out in a hurry, and cauterise the wound!" Mr. Annan has told all his staff to co-operate fully with the inquiry. Any one found guilty, he says, will be dealt with "very severely". (Courtesy: The Economist) |
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