Global Policy Forum

By John G. Ruggie

The tale told about the alleged UN oil-for-food scandal gets taller with each telling. The U.S. General Accounting Office estimated that Saddam Hussein skimmed $10.1 billion under UN noses, but it was soon discovered that this included $5.7 billion in oil smuggling by Saddam for which the UN had no responsibility.

That didn't stop UN bashers from latching on to the higher number - until they found an even more staggering $21 billion cited in a U.S. Senate subcommittee report. But that included all of Saddam's illegal oil revenues going back to 1991 - five years before the oil-for-food program was ever conceived. Charles Duelfer, the CIA's Iraq weapons inspector, put Saddam's total illicit income related to oil-for-food at $1.74 billion. But don't expect to find that figure cited in the press and Congressional attacks.

Whether there was mismanagement and corruption in the UN is the focus of an independent investigation led by Paul Volcker, former chairman of the U.S. Federal Reserve. Its first report is due in January. Whether Kofi Annan's son, who worked in Nigeria for a Swiss company that was awarded a UN contract in Iraq, is implicated is also the subject of several investigations.

If UN officials took bribes or otherwise behaved illegally, they should immediately lose diplomatic immunities and be tried in court. If management failures contributed to the fiasco, the UN should appoint an external auditing board to ensure that all recommended changes are implemented.

But some people, including a leading member of the U.S. Senate, can't wait for due process. They want Annan's head now and have called for his resignation. Spurred on by the chorus of UN haters, Congress is considering yet another round of withholding U.S. dues to the UN - a practice that undermined the UN in the 1990s and which was fully resolved only after 9/11, when it became clear that the organization was needed to help hunt down terrorists.

Instead, Congress should let the Volcker commission do its work and, in the meantime, focus on the roles played in this deeply troubling affair by our own government and American firms. The government knew that Saddam was running a scam but concluded that it was the lesser of evils in containing his regime.

The United States and Britain, along with the other members of the UN Security Council, designed and oversaw the oil-for-food program. The United States alone had 60 professionals review each of the 36,000 contracts awarded - more than twice the size of the UN oil-for-food office's professional staff. America and Britain held up 5,000 contracts, sometimes for months, to ensure that no technology was getting through that Saddam could use for weapons purposes. But they held up none - not a single solitary one - on the grounds of pricing irregularities, even when alerted by UN staff.

What does this suggest about American and British motives? Were they toothless and unwilling to crack down on Saddam, as some now argue that Annan was? Or were these decisions the product of competing priorities - trying to sustain French, Russian and others' support for sanctions that prevented Saddam (successfully, it turned out) from acquiring weapons of mass destruction?

Similarly, three successive U.S. administrations looked the other way while Saddam illegally sold oil to Jordan and Turkey - about $5.1 billion worth, according to the Duelfer report. American fighter planes patrolled the skies, U.S. satellites took photos of the parade of trucks making daily trips and the nightly news covered the story. This was entirely unrelated to the oil-for-food program. It represented U.S. efforts to shore up two allies that played a central role in containing Saddam but were adversely affected by the sanctions. Indeed, doing so required the secretary of state to certify annually to Congress that these illegal sales were in the national security interest of the United States.

Another line of inquiry for Congress concerns American firms that used overseas subsidiaries, including in France, to do oil-for-food business to the tune of at least half a billion dollars. They included Halliburton, Ingersoll-Rand and General Electric. The U.S. government reportedly never objected.

Critics have trained their sights on UN shortcomings, which Volcker is examining in detail. Congress would serve the public interest by asking equally tough questions about the U.S. government and U.S. companies, and by telling us what future administrations should do in similar circumstances.