The UN's Oil for Graft Program

Remind me: what good purpose does the UN serve anymore?

The Wall Street Journal broke the story, Feb. 9, about the UN's oil-for-food program for Iraq (quoted ellipsis in original):

On Dec. 5, during a trip to Baghdad, Claude Hankes-Drielsma faxed an urgent letter to U.N. Secretary-General Kofi Annan. Mr. Drielsma, the U.K. Chairman of Roland Berger Strategy Consultants, had recently been appointed to advise the Iraqi Governing Council. What he saw in Baghdad left him shocked. "As a result of my findings here, combined with earlier information," he wrote, "I most strongly urge the U.N. to consider appointing an independent commission to review and investigate the 'Oil for Food Programme.' Failure to do so might bring into question the U.N.'s credibility and the public's perception of it.... My belief is that serious transgressions have taken place and may still be taking place."

Just how serious these transgressions were became clear late last month, when the Iraqi daily Al Mada published a partial list of names, compiled by Iraq's oil ministry, of those whom Saddam Hussein rewarded with allocations of Iraqi oil. Mr. Hankes-Drielsma, who says he was among the first to see the list in early December, says it is based on numerous contracts and other detailed documents and was compiled at the request of the Iraqi Governing Council.

The list, a copy of which has been seen by the Journal's editorial page, is in spreadsheet format and details (in Arabic) individuals, companies and organizations, grouped by country, who oil ministry and Governing Council officials believe received vouchers from the Iraqi regime for the purchase of oil under the oil-for-food program. Mr. Hankes-Drielsma said the recipients would have been given allocations at below-market prices and then been able to pocket the difference when a middleman sold the oil on to a refinery; 13 time periods are designated and with indications of how much crude, in millions of barrels, each recipient allegedly received.

The list reads like an official registry of Friends of Saddam across some 50 countries. It's clear where his best, best friends were. There are 11 entries under France (totaling 150.8 million barrels of crude), 14 names under Syria (totaling 116.9 million barrels) and four pages detailing Russian recipients, with voucher allocations of over one billion barrels. Many of the names, transliterated phonetically from Arabic, are not well-known or are difficult to identify from the information given. Others stand out. There's George Galloway, the Saddam-supporting British MP recently expelled from the Labour Party, who has always denied receiving any form of payment from Saddam. Other notables include Indonesian President Megawati Sukarnoputri (also listed separately as the "daughter of President Sukarno"), the PLO, the Popular Front for the Liberation of Palestine, the Russian Orthodox Church, the "director of the Russian President's office" and former French Interior Minister Charles Pasqua. Some — including Mr. Pasqua, the Russian Church and Ms. Megawati — have denied receiving anything from Saddam. Patrick Maugein, a close friend of Jacques Chirac and head of Soco International oil company, says his dealings were all within "the framework of the oil-for-food program and there was nothing illegal about it." ....

WaTi ran a follow-up, Feb. 20:

The latest revelations that the deposed Iraqi dictator Saddam Hussein used oil sales under the U.N. oil-for-food program to buy friends and influence policy around the world should turn on an alarm in Washington, New York, Paris and other capitals. Saddam's influence buying is only a part of a broader phenomenon. Other oil-producing countries are engaged in similar activities on an even larger scale.

Several important lessons arise from discovery of Saddam's buddy list. First, this is just the beginning: There are thousands of documents in Baghdad that American and Iraqi intelligence officers need to catalog, translate, analyze and investigate. The precedent — the Eastern German intelligence service STASI archives, which exposed hundreds of spies in Europe and America.

Second, the U.N. may have done more damage than good in Iraq — and may do so again. The U.N. oil-for-food officials knew about the global bribery effort and did nothing to stop it. Moreover, it is possible the officials in that august body facilitated and benefited from at least some of the transactions.

A key question is whether a "Mr. Sevan" who allegedly received oil export vouchers in Panama is the same person as the U.N. Assistant Secretary General Benon V. Sevan, who ran the oil-for-food program. So far, U.N. Secretary General Koffi Annan has refused an internal investigation, and the U.N. bureaucracy has stonewalled and resisted an external investigation of the oil-for-food program....

NRO picked up the story, yesterday:

In the growing scandal over the United Nations Oil-for-Food program, which from 1996-2003 supervised relief to Saddam Hussein's Iraq, U.N. Secretary General Kofi Annan and his staff have excused themselves from any responsibility for the massive corruption involving billions in bribes and kickbacks that went on via more than $100 billion in U.N.-approved contracts for Saddam to sell oil and buy humanitarian supplies. U.N. officials have denied that this tidal wave of graft in any way seeped into their own shop, or that they even had time to notice it was out there. They were too busy making the world a better place.

That's fascinating, not least given the ties of Annan's own son, Kojo Annan, to the Switzerland-based firm, Cotecna, which from 1999 onward worked on contract for the U.N. monitoring the shipments of Oil-for-food supplies into Iraq. These were the same supplies sent in under terms of those tens of billions of dollars worth of U.N.-approved contracts in which the U.N. says it failed to notice Saddam Hussein's widespread arrangements to overpay contractors who then shipped overpriced goods to the impoverished people of Iraq and kicked back part of their profits to Saddam's regime.

Cotecna was hired by the U.N. on December 31, 1998. Shortly afterward, press reports surfaced that Kojo was a partner in a private consulting firm doing work for Cotecna, and that just 13 months previously he had occupied a senior slot on Cotecna's own staff. Asked about this in 1999 by the London Telegraph, a U.N. spokesman, John Mills, replied that the U.N. had not been aware of the connection, and that "The tender by Cotecna was the lowest by a significant margin."

It seems there's a lot the U.N. managed not to be aware of. But the information that Cotecna — while employing Kofi's son in any capacity — put in the lowest bid by far for the job of authenticating Saddam's Oil-for-Food imports, is not necessarily reassuring. Cotecna, which got paid roughly $6 million for its services during that first year (the U.N. will not release figures on Cotecna's fees over the following years) was bidding on work that empowered its staff to inspect tens of billions worth of supplies inbound to a regime much interested in smuggling, and evidently accustomed to dealing in bribes and kickbacks as a routine part of business. The issue was never solely whether the monitors were cheap, but whether they were trustworthy....

And the Wall Street Journal chimes in again, today:

"If there is evidence, we would investigate it very seriously," Kofi Annan insisted last month when presented with allegations that U.N. officials knew about and may have benefited from Saddam Hussein's corruption of the U.N.'s Oil-for-Food Program. Fortunately, Saddam appears to have been a stickler for record-keeping.

A letter has come to The Wall Street Journal supporting allegations that among those favored by Saddam with gifts of oil was Benon Sevan, director of the U.N.'s Oil-for-Food Program. As detailed on this page on Feb. 9, Mr. Sevan's name appears on a list of individuals, companies and organizations that allegedly received oil allocations or vouchers from Saddam that could then be sold via middlemen for a significant markup. The list, compiled in Arabic from documents uncovered in Iraq's oil ministry, included many of Saddam's nearest and dearest from some 50 countries, including the PLO, pro-Saddam British MP George Galloway, and French politician Charles Pasqua. (Messrs. Galloway and Pasqua have denied receiving anything from Saddam.) According to the list, first published by the Iraqi daily Al Mada in January, Mr. Sevan was another beneficiary, via a company in Panama known as Africa Middle East Petroleum, Co. Ltd. (AMEP), about which we have learned quite a bit.

Mr. Sevan, through a U.N. spokesperson, has also denied the allegation. But the letter, which two separate sources familiar with its origins say was recovered from Iraqi Oil Ministry files, raises new questions about Mr. Sevan's relationship with Iraqi authorities....

Lane Core Jr. CIW P — Thu. 03/11/04 05:46:50 PM
Categorized as International.