Announcement

Collapse
No announcement yet.

Report Criticizes Oil-For-Food Program

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • Report Criticizes Oil-For-Food Program

    Report Criticizes Oil-For-Food Program

    Associated Press
    February 3, 2005

    By EDITH M. LEDERER, Associated Press Writer

    UNITED NATIONS - Former U.S. Federal Reserve chairman Paul Volcker says
    his investigation of corruption in the oil-for-food program in Iraq
    found that program director Benon Sevan engaged in "an irreconcilable
    conflict of interest" by choosing the companies that bought Saddam
    Hussein's oil.

    Volcker's first report, as outlined to The Associated Press by an
    official close to the investigation and by Volcker himself in an op-ed
    article in Thursday's Wall Street Journal, found the $60 billion program
    "tainted" from top to bottom.

    Volcker said in the article that program managers, auditors, contractors
    hired to oversee the program's operation and those who controlled U.N.
    expenditures for it, all failed "to follow the established rules of the
    organization designed to assure fairness and accountability."

    The 219-page report was scheduled to be released by Volcker Thursday
    afternoon. He personally delivered a copy to U.N. Secretary-General Kofi
    Annan on Thursday morning and spent about 45 minutes with the U.N. chief.

    "We had some discussion of it," Volcker said.

    U.N. spokesman Fred Eckhard said Annan was "perhaps surprised" by
    Volcker's decision to preview his findings before giving the
    secretary-general the report.

    "We are currently studying the report," Eckhard said.

    Mark Malloch Brown, the secretary-general's new chief of staff, would
    hold a press conference after the report's release to give Annan's
    reaction, he said.

    The oil-for-food program, launched in December 1996 to help ordinary
    Iraqis cope with U.N. sanctions imposed after Saddam's 1990 invasion of
    Kuwait, quickly became a lifeline for 90 percent of the population.

    Under the program, Saddam's regime could sell oil, provided the proceeds
    went primarily to buy humanitarian goods and pay reparations to victims
    of the 1991 Gulf War. Saddam's government decided on the goods it
    wanted, who should provide them, and who could buy Iraqi oil. But the
    Security Council committee overseeing sanctions monitored the contracts.

    The program ended in November 2003, after the U.S.-led war that toppled
    Saddam. Allegations of corruption first surfaced in late 2000, with
    accusations that the Iraqi leader was putting surcharges on oil sales
    and pocketing the money.

    In January 2004, the Iraqi newspaper Al-Mada published a list of about
    270 former government officials, activists, journalists and U.N.
    officials from more than 46 countries suspected of profiting from Iraqi
    oil sales that were part of the U.N. program. Annan appointed Volcker in
    April to lead an independent investigation.

    Volcker made clear that the committee's intention is to improve the
    United Nations, not to destroy it, and he applauded Annan for opening
    the world organization's books, saying "few institutions have freely
    subjected themselves to the intensity of scrutiny entailed in the
    committee's work."

    The interim report will not address questions about Annan or the
    employment of his son, Kojo, by the Swiss company, Cotecna Inspection
    SA, which had a U.N. contract to certify deals under the oil-for-food
    program.

    Critics have raised questions about nepotism and whether Kojo Annan
    played any role in securing contracts for Cotecna - allegations he
    denies. Volcker said the investigation of the secretary-general and his
    son "is well advanced" and the person close to the inquiry told AP that
    it will be addressed in a separate report later this winter.

    Though Sevan has repeatedly denied wrongdoing, Volcker said "the
    evidence is conclusive that Mr. Sevan, in effectively participating in
    the selection of purchasers of oil under the program, placed himself in
    an irreconcilable conflict of interest." This violated both U.N. rules
    and Sevan's responsibility as an international civil servant, he said.

    Volcker did not accuse Sevan of corruption. Annan has said he will lift
    the diplomatic immunity of any U.N. official if Volcker finds evidence
    of alleged involvement in criminal activity. Sevan has retired, but
    remains on the U.N. payroll for $1 a year to help with the investigation.

    The Financial Times reported Tuesday that Sevan personally intervened to
    steer lucrative Iraqi oil contracts to Africa Middle East Petroleum, a
    Swiss-based oil trading company. The contracts could be sold to
    international traders for a markup of up to 35 cents a barrel, the paper
    said.

    Volcker said the procurement process was "tainted," auditing of the
    program was "underfunded and undermanned," and its management was
    "lacking." Perhaps not surprisingly, he said, "political considerations
    intruded" into procurement.

    Last month, Volcker released more than 50 audits of the oil-for-food
    program carried out by the U.N.'s internal watchdog office, headed by
    Dileep Nair, who is also expected to be criticized in the report, the
    official familiar with the investigation said, speaking on condition of
    anonymity.

    The audits detail how U.N. agencies working under the oil-for-food
    program allegedly squandered millions of dollars through suspect
    overpayment to contractors, mismanagement of purchasing and assets, and
    fraud by its employees.

    In a briefing paper that accompanied the release of the audits,
    Volcker's Independent Inquiry Committee questioned why the auditors
    neglected the New York headquarters of the Office of the Iraq Program,
    which Sevan headed. It said auditors also neglected the oil and
    humanitarian supplies contracts, and transactions through the program's
    account at the French bank BNP Paribas.

    Investigators say Saddam's government used its control over contracting
    to corrupt the program.

    Expectations that the preliminary report will produce real evidence are
    high, especially since Volcker has come under intense criticism for
    comments downplaying his potential findings. He has said he intends to
    provide a final report around midyear.

    Annan told reporters Wednesday the United Nations is already taking
    measures to strengthen some management practices and will implement
    Volcker's recommendations, saying there will probably be some "harsh
    judgments."

    He added that he has already asked the General Assembly to review the
    mandate of the U.N. watchdog office, which was created 10 years ago, "to
    see how we can strengthen it and give it appropriate authority to do its
    work."


    http://news.yahoo.com/news?tmpl=story&cid=540&u=/ap/20050203/ap_on_re_mi_ea/oil_for_food_investigation_9&printer=1

    From: Emil Lazarian | Ararat NewsPress
Working...
X