The Daily Whim

The Daily Whim

Wed. May 05, 2004

'Frankly, We Have Other Priorities'

Over the past couple of weeks I’ve been collecting links and bits and pieces about the growing UN Oil-For-Food scandal. Surprisingly, people don’t seem too worked up about it. It’s just a threat to the framework of the international community. No biggie. I imagine a lot of people of the left end of the political spectrum have tried to tune it out, figuring it’s just right-wing election year hoo-hah.


If you’re someone who puts your faith in the UN, and the “international approach” it represents, it’s in your best interest (and the world’s, in your view) that the UN remain healthy, well respected, and without even the perception of taint. Or of shady profits being made at the cost of the lives they’re supposed to improve.

But it’s becoming more and more clear, that’s exactly what happened. On a massive multi-billion dollar scale.

And if you’re the UN itself, which operates solely on the goodwill of its members and its own perceived mission, you should immediately lay yourself naked to detailed examination. Instead, the UN has been defensive to the point of accusations of “stonewalling.”

There’s a lot to go over, so where to begin? I think Michael Soussan has an excellent summation of the scandal. Why listen to him? Because he’s a former program coordinator for the United Nations Oil-for-Food Program:

The classic “whodunit,” in which it turns out everybody “did it,” is a perfect model for understanding what happened to Iraq’s national resources during the sanctions: Most of the international community was in on the fleecing of Iraq [...] The General Accounting Office estimates that Saddam Hussein used the U.N. operation to extort $4.4 billion in kickbacks from Iraq’s international trading partners [...] Beyond the kickbacks, Saddam was able to smuggle an estimated $5.7 billion worth of oil and fuel out of the country in total violation of the sanctions [...] This sanctions-busting trade provided no benefit to Iraq’s civilian population. In fact, it created drastic fuel shortages inside Iraq. And again, it could not have occurred without the knowledge, and participation, of Iraq’s neighbors.

...regardless of where observers stand on whether to assign a new role to the United Nations in Iraq, they must recognize that the United Nations cannot promote good governance internationally if it is unable to apply accountability and transparency to its own affairs. Volcker’s investigation is an opportunity to do just that.

Behind closed doors, however, many U.N. diplomats continue to view the investigation as an effort by the Pentagon, and Iraqi opponents to Saddam’s regime, to settle scores with Iraq’s former trading partners (most of whom opposed the war and are making little effort to help rebuild Iraq today). They wonder why the kickbacks suddenly became a scandal in 2004 when everybody knew about them all along.

Well, one thing is new: Suddenly, there is a free Iraqi press that actually cares about what happened to Iraq’s resources during the sanctions. It was the Iraqi daily Al-Mada that broke the story that sparked the scandal.

And if those who profited from the program feel victimized by the scandal, it might be useful for them to remember who the real victims were in this affair.

The money that was skimmed off the Oil-for-Food program was stolen from the Iraqi people. And ultimately, it will be the job of an elected Iraqi government, when it comes to power, to decide how to deal with the companies that broke the law and paid kickbacks to Saddam.

NYPost: “The Fleecing of Iraq”

And despite the grumbling that this is all a Pentagon plot to slander the UN, it’s the Iraqis who are most pissed, and they are doing their own digging: “Iraq’s Governing Council has hired some international experts to conduct its own investigation. Among them is a prominent London-based management consultant, Claude Hankes-Drielsma. Last month, in a scathing letter to Mr. Annan, he called the oil-for-food program ‘one of the world’s most disgraceful scams.’ He also said that ‘based on the facts as I know them at the present time, the UN failed in its responsibility to the Iraqi people and the international community at large.’

It’s potentially a very deep and confusing story, with reams of paperwork to be audited and analyzed, and hundreds of people to be interviewed. But we can get a pretty good indicating reaction from a few people at the top of the UN.

At least three senior United Nations officials are suspected of taking multimillion-dollar bribes from the Saddam Hussein regime, U.S. and European intelligence sources tell ABCNEWS.

Most prominent among those accused in the scandal is Benon Sevan, the Cyprus-born U.N. undersecretary general who ran the program for six years.

The United Nations, at first, dismissed the allegations about Sevan, but this week, Secretary General Kofi Annan said there would be a full investigation led by the former chairman of the Federal Reserve Bank, Paul Volcker.

As for Sevan, when news of the scandal first broke earlier this year, he took a long vacation to Australia. He declined to answer questions when ABCNEWS found him last week staying at a luxury casino resort.

ABCNews: “Monumental Rip-Off?”

Since Sevan tried to avoid questioning with a long holiday at a luxury resort Down Under, it only seems appropriate that The Australian pick up the story from there. And they find Sevan is just the oily tip of a black iceberg:

Documents found in Iraq’s old ministry of oil reveal that hundreds of prominent individuals received vouchers to buy Iraqi oil at cut-rate prices and sell it on the open market – at tremendous, often seven-figure, profits.

Those named include not just Sevan but a vast array of Russian politicians, close friends of French President Jacques Chirac (including France’s former minister of the interior), British Labour MP George Galloway, former UN weapons inspector Scott Ritter and, closer to home, Indonesian President Megawati Sukarnoputri.

In short, it’s a who’s who list of high-profile anti-war and anti-sanctions voices, all revealed to be shills for Saddam.

But by far the biggest recipient of Saddam’s largesse was the UN. During the program’s existence, more than $US1 billion was kept by the organisation as a fee for administering the program. As one senior UN diplomat recently told London’s Daily Telegraph: “The UN was not doing this work just for the good of Iraq. Cash from Saddam’s government was keeping the UN going for a few years.”

The Australian: “UN apologists remain silent on oil scandal”

And if you need convincing by something more than a dry recitation of the currently known facts, how does this attitude sound to you: “Before Sevan’s recent mysterious disappearance into the nether world, facilitated by boss Annan, who shrewdly packed him off on long leave before retirement, Sevan nonchalantly admitted, ‘that as much as 10 percent’ of the programme’s revenues may have been ‘ripped off,’ telling a TV channel: ‘Even if 10 percent of the revenue was stolen, 90 percent got to the people it was intended for. Why does nobody report that?’ he asked peevishly.

At the risk of invoking Godwin’s Law on myself, this is akin to Nazi propaganda chief Joseph Goebbels saying … peevishly ... “even if 10% of Poland’s population was killed, they were just Jews and Gypsies, and 90% of Poles survived. There were millions of people the Nazis never killed. Why does nobody report that?”

But I’ll calm down, and point you to some of those right wingers who are surely out to discredit the UN for ideological reasons. Like Roger Simon: “As a supporter of the United Nations (yes, I believe it necessary), I find this potentially immensely destructive to the organization. If the Oil-for-Food allegations are true, and it increasingly looks as if they are, without a deep and full bloodletting (probably including the resignation of Annan) the UN will never recover the confidence of the American people, nor should it. By not being on this with Watergate-style intensity, the media is aiding and abetting the downfall of the organization they wish to save.

And Austin Bay, from Strategy Page: “General Tommy Franks dubbed the program ‘Oil for Palaces.’ Internet wags call it UNSCAM. If the United States doesn’t force the United Nations to come clean about the deeply corrupted Oil for Food program and account for billions of skimmed Iraqi oil dollars, then we’re not merely fools, we’re party to the further degradation of a vital international institution.

And quite importantly, as the far from liberal Wall Street Journal points out, this all relates “directly to the U.N.’s current ambitions in Baghdad. Iraqis now know that the U.N. and some of its leading members conspired with their former dictator to fleece them of their national wealth. The very least Iraqis should expect is that the U.N. will come clean about its sins and punish those who profited at their expense. George Bush, John Kerry and others who now want to give the U.N. control in Baghdad should also settle for nothing less.

But some publications aren’t quite as … staid … as the Wall Street Journal: “SADDAM-supporting MP George Galloway blew his top yesterday after The Sun sent him a barrel of OIL. Mr Galloway claims he has never seen one — so we arranged for him to have his own 200-litre drum.

Of course, it isn’t too hard to find genuine right wing bashing of the UN, the kind of thing you’d think the UN would want to quickly squelch with a transparent investigation. Like this from Mark Steyn: “Say the initials ‘UN’ to your average member of Ms Toynbee’s legions of the unthinking and they conjure up not UN participation in the sex-slave trade in Bosnia, nor the UN refugee extortion racket in Kenya, nor the UN cover-up of the sex-for-food scandal in West Africa, nor UN complicity in massacres, but some misty Unesco cultural event compered by the late Sir Peter Ustinov featuring photogenic children.

Steyn snarks that Kofi Annan shouldn’t feel too bad, as “it is hardly his fault. When he set up the show, who would have thought that one day there would be US auditors in Baghdad?

However, we’ve gone from the start of the scandal straight to the snarking of the punditry, when there’s a world of facts in between. Frankly, for a scandal of this magnitude, the media coverage in the US has been pretty stark (though there’s already a blog devoted to it). I don’t think the average American is really aware of the full nature of this scandal.

If you want a good starting place, I suggest an article by Claudia Rosett, “The Oil-for-Food Scam: What Did Kofi Annan Know, and When Did He Know It?”: “Oil-for-Food, run by the UN from 1996 to 2003, did, in fact, deliver some limited relief to Iraqis. It also evolved into not only the biggest but the most extravagant, hypocritical, and blatantly perverse relief program ever administered by the UN. But Oil-for-Food is not simply a saga of one UN program gone wrong. It is also the tale of a systematic failure on the part of what is grandly called the international community.

Oil-for-Food tainted almost everything it touched. It was such a kaleidoscope of corruption as to defy easy summary, let alone concentration on the main issues. But let us try.” And try she does, in a lengthy article that gives you a good foundation towards understanding this story.

She continues today with a new article in the Wall Street Journal that details the attempts to coverup the whole mess, while claiming “We are transparent.

This past Sunday Secretary-General Kofi Annan appeared on “Meet the Press,” rejecting as “outrageous” allegations that this graft-ridden U.N. relief program for Iraq had helped prop up Saddam Hussein’s regime, and denying that the U.N. has made any attempt at a coverup. Asked by host Tim Russert why only a portion of the documentation requested of the U.N. by the U.S. General Accounting Office had been turned over, Mr. Annan protested: “We are open. We are transparent.”

That sounded lame enough, coming just after Mr. Russert on national TV had flourished in front of Mr. Annan a letter sent by Mr. Annan’s own Secretariat on April 14, advising one of the pivotal Oil for Food contractors, Saybolt International – which oversaw Saddam’s oil exports—to keep quiet.

Now investigators for the House International Relations Committee have dug up a second hush letter, this one dated April 2, sent by the U.N. to yet another crucial Oil for Food contractor: Cotecna Inspections. This is the company that for the last five years of the seven-year program held the U.N. contract for the sensitive job of authenticating all goods being shipped into Iraq under Oil for Food.

Both letters, to Saybolt and Cotecna, are signed on behalf of Mr. Sevan, each by a different member of Mr. Annan’s staff. Mr. Sevan was on vacation, pending retirement, when they were drawn up. The letter to Cotecna was a pointed reminder of terms of the U.N. contracts with Cotecna, detailing that all documentation connected with Oil for Food “shall be the property of the United Nations, shall be treated as confidential and shall be delivered only to the United Nations authorized officials on completion of work under this contract.”

The letter to Saybolt also made specific mention that if U.N. internal audit reports are asked for, “we would not agree to their release.” These would be the same internal audits that the U.N. Secretariat – which administered the Oil for Food program – did not share with the Security Council and has refused to provide to Congress.

In other words, in the interval between March 19, when Mr. Annan finally conceded in the face of overwhelming evidence that the program might after all need investigating by independent experts, and April 21, when former Federal Reserve chairman Paul Volcker was appointed to head to the investigation, Mr. Annan’s office explicitly reminded these two crucial contractors, which worked for the Secretariat’s Oil for Food program checking the imports and exports involved in more than $100 billion worth of Saddam’s oil sales and relief imports, to keep quiet.

Wall Street Journal: “We Have Other Priorities”

Speaking solely for myself, I’ve seen the UN as a failed institution for about a decade. Long before 9/11, or the fighting in Afghanistan or Iraq. I wrote a lengthy article detailing the quarter million reasons, but you might prefer the official report: “The official Dutch report into the Srebrenica massacre says the Dutch Government and the United Nations must share responsibility for Europe’s worst atrocity since World War II [...] The United Nations had declared the town a safe area but it fell to the Serbs without the 110-strong UN contingent firing a shot and up to 8,000 Muslim men and boys were then executed. The International Criminal Tribunal for the former Yugoslavia in The Hague has ruled that the massacre constituted genocide.

As I said then, “Not only did the UN fail to stop genocide, they actually made it easier, by rounding up Bosnians under the false pretense of offering safety and protection, and then failing to expend one single bullet on their behalf.”

“And you want me to trust the European/UN approach to conflict resolution?!? [...] I do not ever want my safety to be dependent on that source of advice, or on that kind of protection.”

And the Iraqis, who in some ways seem to be paying closer attention to this matter than Americans, may soon feel the same way. Why would you want additional “help” from an organization that appears to have profited from your earlier suffering via their blatant corruption? Especially when they are less than open about the questions being raised?

If the UN does not become truly transparent on the Oil-For-Food investigation(s), and go the extra mile to ensure the international community can trust their actions and programs, the UN may find themselves unwelcome in many parts of the world. Certainly Iraq.

Frankly, either outcome is fine with me. If they keep stonewalling (and doing things like electing Sudan to the Human Rights Panel, ignoring the ethnic cleansing of more than a million in that country), they’ll destroy the credibility of UN aid programs, and then the funding of those programs will evaporate. Nations will stop paying their UN dues. At that point (likely too late), they’ll wake up and reform. Or, they could open the books for all to see, now, and firmly pursue punitive measures against all transgressors, in order to regain the immediate trust of the international community.

Either way, the UN is going to have to take its medicine on this one, sooner or later. And they get to choose whether it’s a rough course of immediate therapy, or dangerous emergency surgery later, if the problem is ignored.

The real problem? They haven’t even admitted to themselves that they’re sick. As always, that’s more than half of the battle.

Peanut Gallery

1  JLawson wrote:

The UN has authority for actions, but no responsibility for outcomes. It is, perhaps, not surprising that corruption at high levels was not only tacitly condoned – considering the ersonalities involved it may even have been quietly encouraged.

After seeing the lack of action by the UN over the past decade and more, I can’t help but wonder why some people keep giving it a pass, and why they keep being seen as ‘the good guys’.

They may have a high published purpose – but they have to be kept to that purpose internally and externally. The internal breakdowns weren’t addressed, and the external expectations kept getting watered down. That’s a recipe for institutional failure and collapse.


2  Steve wrote:

A remarkable summary of the whole mess.

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