Global Policy Forum

Oil for Food: A Hell of a Scandal


By Ian Williams

Asia Times
April 1, 2005

"Hell no!" said United Nations Secretary General Kofi Annan when asked whether he would resign after the Volcker Report in effect cleared him of using any influence on behalf of Cotecna, the company that had employed his son Kojo. It was good to see him in fighting mode instead of the usual UN posture of Job suffering assorted plagues, conservatives and deranged ambassadors because the White House is trying his faith.

Even so, hell hath no fury like an American conservative cheated of his prey, and not until hell freezes over will the right-wing media in the United States admit that Paul Volcker's "there is no evidence of wrongdoing" means "not guilty", or "innocent".

Apart from turning the other cheek, the other besetting sin of the UN is assuming, at least in public, that its interlocutors on the right of US politics are susceptible to rational arguments, evidence, and similar foreign logical tropes. Indeed, many of Annan's persecutors have already insulated themselves from reality by preemptively calling the Volcker Inquiry a "whitewash", and condemning the use of residual oil-for-food funds to pay for it. I sympathize, but not for the same reason as the shedders of crocodile tears who complain that its costs come from funds that should have gone to starving children in Iraq.

I may lend them a handkerchief to dab at their wet eyelids if I hear any of them complain about the US$30 billion or so that was sequestrated in reparations from the oil-for-food fund to pay compensation for the first Gulf War, the 5% of revenue that is still being deducted from all Iraqi oil sales to pay compensation, mostly to Kuwait, for reparations, the $8 billion plus left over from the oil-for-food fund that was handed over to the Coalition Provisional Authority after the invasion, and which the US administration admits (quietly) has never been accounted for properly, but a lot of which we know ended up in Halliburton's coffers on no-bid contracts. However, my handkerchief will stay dry and in my pocket, since to the best of my knowledge not one of these critics has raised a peep at this looting of the Iraqi people's patrimony.

In my opinion, Annan should have given the whole baying crowd the finger from the beginning, instead of constructing this massive Volcker apparatus to scour lint from the UN's own navel. With a multimillion-dollar budget, the Volcker panel has so far found that former oil-for-food chief Benon Sevan received $160,000 that he cannot prove came from his deceased aunt, that Dileep Nair of the Office of Internal Oversight Services, which most UN insiders know makes the Keystone Cops look professional, used some $200,000 in oil-for-food funds to pay for a compatriot he wanted to employ, and that Kojo Annan earned $200,000 more than he declared from Cotecna.

And of course that Iqbal Riza, Annan's secretary, let his secretary shred three years of files. It is indeed an amazing coincidence that his secretary should make such a request just as the Security Council was asking all documents to be kept. But Riza was not a big fan of transparency, and this would not be the first time his generation of UN staff assumed that secrecy was the best way to deal with media scrutiny - even when there was nothing to hide.

All of these findings suggest improprieties - but there is nothing illegal about any of them according to Volcker, and according to me, almost nothing that justifies this egregious waste of resources on an inquiry whose results so far have been like the Federal Bureau of Investigation handing Al Capone a parking ticket after a two-year stakeout in Chicago.

On the other hand, now comes the good bit, which promises to make the otherwise wasted money well spent. At the press conference at which he declared there was no evidence against Annan on the most substantial allegations made so far, Volcker promised that the final report in this will deal with the broader issues of the UN Oil for Food Program and the involvement of the Sanctions Committee, the Security Council and the governments of the member states.

This will be interesting. On the positive side, he may actually point out that the Oil for Food Program, which is now irredeemably tainted as "inefficient" or "corrupt" or "scandal-ridden", was actually so successful in its two major aims - feeding Iraqis while starving Saddam Hussein's war machine - that the American invaders asked it to continue well into the occupation - and could find no weapons of mass destruction. In fact, allowing for the usual inefficiencies of any international bureaucracy, it was a very successful program.

Back in the US, Volcker will almost certainly report that Republican and Democratic administrations alike were complicit in Iraqi oil trading with Turkey and Jordan. (It was trading, not smuggling, since both the Security Council and the US Congress knew about it and condoned it.)

Almost as his parting words, former US ambassador John Danforth had warned, or threatened, the UN not to try to implicate his diplomatic colleagues. However, US bullying apart, the Sanctions Committee was warned about Saddam Hussein's double pricing and did little about it, even though every contract went to Washington and was minutely scrutinized by a welter of committees there.

Each year the US secretary of state moved an exemption for Iraq and Turkey to exempt them from US repercussions for buying oil from Iraq - and the turkeys in Congress said "Aye." After all these yelps from Americans concerned about UN accountability and transparency, it will be really interesting to see how much access the Volcker Inquiry is allowed to US government documents and personnel to study this question.

This would be a good opportunity for the UN Secretariat to get some payback for the way those governments really responsible for billions of dollars of revenue going to Saddam have left Annan and the UN swinging in the wind. Sadly, the UN is still too polite to the No 1 Member State to really come out swinging at it. The UN is temperamentally unsuited to defending itself, as shown by its volte-face over paying Sevan's legal bills.

Kofi Annan's reply to the commission on the matter of whether or not he should have held a deeper inquiry in 1999 when the first hint of Cotecna employing his son was drafted by an expensive firm of Washington lawyers, Williams and Connolly. Their reply was quite convincing: Annan had after all asked the advice of the former head of PriceWaterhouse, Joseph Connor, the head of UN management in effect nominated by the US, and Hans Corell, who was then his undersecretary general for legal affairs and then the head of the Office of Internal Oversight Services, for their advice, and they told him not to bother.

I hope he did not have to pay from his own pocket to defend himself for carrying out his official duties. It is only fair that the same courtesy should have been extended to Sevan, who was after all being pursued because of his official position as head of the Oil for Food Program, and who had been a chief target of the witch-hunt from the beginning. In civilized countries, people are presumed innocent until proven guilty, and even those who are eventually found guilty are allowed proper legal representation.

The Secretariat should have stood its ground. The secretary general has offered to lift diplomatic immunity from anyone who is wanted for prosecution. Sevan is in the US, where under the current climate of opinion the prosecutors just have to say "Iraq" and the "United Nations" often enough for a jury to find the poor guy guilty of masterminding September 11, 2001.

The UN did the right thing by offering to pay legal expenses for Sevan, and the wrong thing by succumbing to a media lynch mob and reneging on the deal. We can only hope that, heartened by the Volcker verdict, they go on the counterattack and suggest that there was another son of an influential father, who used his paternal name to cover his rear in numerous dicey business undertakings, and who went on to greater things. Yes, you really would expect more forbearance from supporters of George W Bush for Kojo's shenanigans.

However, even the new invigorated Chef de Cabinet, Mark Malloch Brown, although he is more likely to post his personal files on the press floor than shred them, is unlikely to tweak the clown's nose this way.

It's up to us, the people, really, not to let a bunch of faith-based conservatives determine or divert the agenda of a body that belongs to the world, not La Verkin, Utah, the capital of flakey UN haters, which currently seems over-represented in the media and Washington.

More Information on Iraq
More Information on the Oil-for-Food Programme


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