How the UN, France, and Russia bribed Saddam

[Rudey]

How do people feel that Kofi Annan's son Kojo was on the payroll for the company that monitored goods sent to Iraq?

How do people feel that there was a markup to allow for kickbacks of 10% on these prices?

How do people feel that often the goods were expired (bad food and medicines)?

How do people feel that the money flowed through the French and Russians (more kickbacks) before getting to Saddam?

http://www.nytimes.com/2004/03/29/opinion/29SAFI.html

-Rudey
--Good read

[Coramoor]

I can't wait to see the UN's and France's repsonse. It'll be interesting without a doubt.

[DeltAlum]

I believe Annan has begun an "official" UN investigation of the kickbacks. Be interesting if his son's name shows up as a bad guy.

Maybe that's why France and Russia dragged their feet on getting rid of Sadaam.

[Rudey]

Originally posted by DeltAlum
I believe Annan has begun an "official" UN investigation of the kickbacks. Be interesting if his son's name shows up as a bad guy.

Maybe that's why France and Russia dragged their feet on getting rid of Sadaam.

Did you honestly think there was another reason why they didn't?

-Rudey

[kappaloo]

Originally posted by Rudey
Did you honestly think there was another reason why they didn't?

-Rudey

I always have gone with Populist support.... supporting the war would have been a quick ticket out of office for the French (and maybe the Russians, I don't know).

[PhiPsiRuss]

Originally posted by DeltAlum
Maybe that's why France and Russia dragged their feet on getting rid of Sadaam.
Chirac has been personally involved in Iraqi oil for 30 years. This little piece of trivia has been conveniently overlooked by the French media, as they labled the US as monsters. Even if the whole subject of WMD never was mentioned, intervention in Iraq was completely justifiable, but the French and Russians would never have gone along with it because of the oil.

The reason why France refused to enforce UN Security Council Resolution 1441 was because of the oil. Genocide wasn't so bad, as long as they got their oil. Vichy France lives. Fü¢% the French. They allowed the UN to be completely undermined, and backed the US and UK into a corner, not for principle, but for oil.

[Rudey]

Benon Sevon, the man in charge of the oil-for-food program, bought oil for way below market price and reaped a great profit. His name is on a list of 270 such "businessmen" who were corruptly profiting. Additionally, Sevon was an undercover agent for France (no big splash about the UN being infiltrated by the French intelligence it seems).

The troubles go farther. "Iraq, with U.N. approval, kept Americans, Britons and Scandinavians off the staff that administered the 13 percent of the oil-for-food proceeds earmarked for Kurdish provinces." Why do people criticise the US for not allowing these blood countries to gain contracts after essentially enslaving Iraqis?

Perhaps we should look further. The UN was filled with capacity with spies. A Tunisian U.N. employee with a car full of explosives meant for a terror bombing in Erbil was arrested in July of 2001. 4 months later the UN was able to quietly negotiate his release.

-Rudey

[DeltAlum]

A couple of thoughts.

First, every country, including ours, has used diplomatic cover for spies for many years. So, it 's not a surprize that the UN is full of them. "Diplomatic Immunity" covers a lot of sins.

Chirac not withstanding, huge numbers of people in countries all over the world apparantely were against this particular military action.

Despite the outstanding job our military did in the actual fighting itself, I still believe that the timing and alleged reasoning for this one was ill advised.

We now need to commit to the long term in rebuilding Iraq, and as has become obvious, it will be painful.

[Rudey]

Originally posted by DeltAlum
A couple of thoughts.

First, every country, including ours, has used diplomatic cover for spies for many years. So, it 's not a surprize that the UN is full of them. "Diplomatic Immunity" covers a lot of sins.

Chirac not withstanding, huge numbers of people in countries all over the world apparantely were against this particular military action.

Despite the outstanding job our military did in the actual fighting itself, I still believe that the timing and alleged reasoning for this one was ill advised.

We now need to commit to the long term in rebuilding Iraq, and as has become obvious, it will be painful.

Yes except perhaps you have forgotten how much of a media mess they made when they found out that the US and Britain were listening in on UN officials talk about the Iraq war. Why haven't they made the same mess here?

And while people may be against the war, they simply are against the US. They let the UN off the hook and countries like Russia and France are angels evidently. What jokes...what crocks.

-Rudey

[DeltAlum]

Originally posted by Rudey
Yes except perhaps you have forgotten how much of a media mess they made when they found out that the US and Britain were listening in on UN officials talk about the Iraq war. Why haven't they made the same mess here?
Ah, the day (meaning this particular revelation) is still young. I'm sure it will get uglier.

[PhiPsiRuss]

Originally posted by DeltAlum
Ah, the day (meaning this particular revelation) is still young. I'm sure it will get uglier. And it will be blamed on George Bush.

[Rudey]

Originally posted by DeltAlum
Ah, the day (meaning this particular revelation) is still young. I'm sure it will get uglier.

You obviously have rose colored sunglasses. I thought with your age and experience, that would not be so. Here is what will happen.

1) Nothing. No further mention in the news.

2) Possibly a slap on the wrist with a reuters and ap article somewhere out there on this.

3) Kofi Annan, Charac, LLC will use a variation of this classic phrase to sum it up, "That is not the issue here; the issue here is that Bush and American are wrong and lied to start this war in Iraq." Someone can be talking about the weather and Charac would reply with that phrase.

-Rudey

[DeltAlum]

We shall see.

[Rudey]

Originally posted by DeltAlum
We shall see.

They're saying there is heavy momentum against any investigation - including by the US. The US wants the UN in Iraq so they're overlooking quite a bit.

Oil for Terror: http://www.nationalreview.com/comment/rosett200404182336.asp

Scandal with no Friends:
http://www.nytimes.com/2004/04/19/opinion/19SAFI.html

Look at these crooks - these dirty people who look down on Americans because we weren't mindful of the damage that might be caused to their illegal operations.

-Rudey

[moe.ron]

Something to consider, for the UN side of the Oil for Food Program, any contracts by the UN must be approved by the Security Council. Hence, the problem for this corruption not only lies with the UN officials, but every nations that was a member of the security council during the Oil For Food Program era.

Hopefully we'll find out why the UN did not audit the program correctly, and why the Security Council members turned a blind eye on the corruption.

[Rudey]

Originally posted by moe.ron
Something to consider, for the UN side of the Oil for Food Program, any contracts by the UN must be approved by the Security Council. Hence, the problem for this corruption not only lies with the UN officials, but every nations that was a member of the security council during the Oil For Food Program era.

Hopefully we'll find out why the UN did not audit the program correctly, and why the Security Council members turned a blind eye on the corruption.

Security Council Members include France, China, and Russia - all the guilty crooks and accessories to genocide and mass murder. The US and Britain complained approximately 40 times to deaf ears. Had the US voted against yet another stupid idiotic global policy (ie Kyoto) it would have been hated more.

Here is a collection of articles by the Kurds: http://www.puk.org/web/htm/news/nws/oil4food_un.html

-Rudey
--Europeans seem to be dirty, blood hungry, criminals and it's time to shame them

[moe.ron]

Originally posted by Rudey
Security Council Members include France, China, and Russia - all the guilty crooks and accessories to genocide and mass murder. The US and Britain complained approximately 40 times to deaf ears. Had the US voted against yet another stupid idiotic global policy (ie Kyoto) it would have been hated more.

Here is a collection of articles by the Kurds: http://www.puk.org/web/htm/news/nws/oil4food_un.html

-Rudey
--Europeans seem to be dirty, blood hungry, criminals and it's time to shame them

If they complained, why did they approved the contracts? Both countries have veto powers.

[Rudey]

Originally posted by moe.ron
If they complained, why did they approved the contracts? Both countries have veto powers.

I assume it's because they didn't know much of what had happened until after and, more importantly, because the world hates the US and would not understand.

-Rudey

[moe.ron]

Originally posted by Rudey
I assume it's because they didn't know much of what had happened until after and, more importantly, because the world hates the US and would not understand.

-Rudey

Either that, or the administration during the period didn't care. Every contract could be seen by the public. It doesnt take much to audit the contracts. Just send in the foresnic auditor for any of the big five accounting firm (minus Arthur Anderson), and they would have found out about it. Either way, the three men team who is investigating this shows that they are not going to hide from the charges. In case you are wondering, the three men are:

Paul Volcker, former U.S. Federal Reserve chairman.

Judge Richard Goldstone, the first prosecutor on the U.N. Balkan war crimes tribunal.

Mark Pieth, an expert on international bribery and money laundering.

These three men have impeccable reputations.

[Rudey]

Originally posted by moe.ron
Either that, or the administration during the period didn't care. Every contract could be seen by the public. It doesnt take much to audit the contracts. Just send in the foresnic auditor for any of the big five accounting firm (minus Arthur Anderson), and they would have found out about it. Either way, the three men team who is investigating this shows that they are not going to hide from the charges. In case you are wondering, the three men are:

Paul Volcker, former U.S. Federal Reserve chairman.

Judge Richard Goldstone, the first prosecutor on the U.N. Balkan war crimes tribunal.

Mark Pieth, an expert on international bribery and money laundering.

These three men have impeccable reputations.

Political "capital" is an important concept. The cost of pursuing this would have been too high politically for the US. There are idiots out there who claim they're against the sanctions and hate the US and say we killed children - just imagine the backlash of eliminating the oil-for-food program.

And how many of the contracts by the UN get audited??

Reputations?? Reputations mean jack and that is a ridiculous statement.

-Rudey
--Expose the Europeans!!!

[moe.ron]

Originally posted by Rudey
Political "capital" is an important concept. The cost of pursuing this would have been too high politically for the US. There are idiots out there who claim they're against the sanctions and hate the US and say we killed children - just imagine the backlash of eliminating the oil-for-food program.

And how many of the contracts by the UN get audited??

Reputations?? Reputations mean jack and that is a ridiculous statement.

-Rudey
--Expose the Europeans!!!

Reputation goes to credibility of the investigation. The three men are known for their independence.

I've met Judge Goldstone. He is a man of character. If he see something not right, he will say it. He is currently a judge at the South African Constitutional Court.

Paul Volcker, you should know who he is. From what I've read, he will also hold no punches.

As for Mark Pieth, he is a Swiss professor who specialised on international bribery and money laundering.

The three men has great reputation. And it will mean a lot when the reports come out. It will be detailed and honest.

As for auditing, I can tell you that every UN Agencies get audited every year. The auditor changes every year to maintain honesty. I don't know what happen in the Oil for Food, that is why this investigation will be started.

[Rudey]

Originally posted by moe.ron
Reputation goes to credibility of the investigation. The three men are known for their independence.

I've met Judge Goldstone. He is a man of character. If he see something not right, he will say it. He is currently a judge at the South African Constitutional Court.

Paul Volcker, you should know who he is. From what I've read, he will also hold no punches.

As for Mark Pieth, he is a Swiss professor who specialised on international bribery and money laundering.

The three men has great reputation. And it will mean a lot when the reports come out. It will be detailed and honest.

As for auditing, I can tell you that every UN Agencies get audited every year. The auditor changes every year to maintain honesty. I don't know what happen in the Oil for Food, that is why this investigation will be started.

There was a decent article on the Post about how the investigation is being circumvented right now - including by the US so they can secure the UN presence in Iraq. I'd post a link, but I don't have access to the full pay archives because I generally think the Post is for people with 2nd grade reading levels.

http://pqasb.pqarchiver.com/nypost/results.html?QryTxt=united+nations+oil

And everyone's reputation is great until it becomes soiled.

-Rudey

[moe.ron]

Is it the NY Post? I miss that paper. I love their sport section.

[PhiPsiRuss]

Originally posted by moe.ron
Is it the NY Post? I miss that paper. I love their sport section. http://www.NYPost.com/

Enjoy. :cool:

[Rudey]

Originally posted by moe.ron
Is it the NY Post? I miss that paper. I love their sport section.

Haha yeah. Their sports section was great wasn't it? Nobody outside of NY understands.

-Rudey

[moe.ron]

Originally posted by Rudey
Haha yeah. Their sports section was great wasn't it? Nobody outside of NY understands.

-Rudey

Hell yeah. I don't understand why NY Post just get rid of the other nonsense they do and just concentrate on sports. Used to wake up early to listen to WFAN. Is Imus still on? How about Mike and the Mad Dog?

[Rudey]

Originally posted by moe.ron
Hell yeah. I don't understand why NY Post just get rid of the other nonsense they do and just concentrate on sports. Used to wake up early to listen to WFAN. Is Imus still on? How about Mike and the Mad Dog?

http://wfan.com/imusinstantreplay/
http://wfan.com/chrismikeaudio/

Good stuff.

-Rudey

[moe.ron]

Originally posted by Rudey
http://wfan.com/imusinstantreplay/
http://wfan.com/chrismikeaudio/

Good stuff.

-Rudey

Thanks brother man. Now I have something to listen to while I work in the office.

[Rudey]

Silent Majority
The New Republic

"The United States has expressed outrage at the U.N. oil-for-food scandal but has tried to defund the Governing Council's own examination of the problem so as not to make things awkward for U.N. envoy Lakhdar Brahimi. If the United States thinks Iraqis will take more kindly to U.N. paternalism than American paternalism, they are mistaken. Many Shia and Kurds remember that Brahimi remained silent when, as undersecretary of the Arab League between 1984 and 1991, Saddam massacred tens of thousands of Shia and Kurds. And Iraqis have not forgotten U.N. Secretary General Kofi Annan's February 24, 1998, comment, "Can I trust Saddam Hussein? I think I can do business with him." Iraqis, like most other peoples, are prickly nationalists. After the handover, the Iraqi government must be able to conduct its own sovereign investigation of the United Nations and anyone else. "

*Michael Rubin served as a Coalition Provisional Authority political adviser between July 2003 and March 2004, and is now a resident scholar at the American Enterprise Institute.

-Rudey

[RACooper]

Well an update on investigations into corruption and bribes in the UN (specifically Oil for Food, but on the whole as well).... the former head of CSIS (I guess you can say Canada's version of the CIA) has been apointed to lead the investigation.

[Rudey]

NYTimes (http://www.nytimes.com/2004/06/14/opinion/14SAFI.html?n=Top%2fOpinion%2fEditorials%20and%20O p%2dEd%2fOp%2dEd%2fColumnists%2fWilliam%20Safire) For the complete version.

Tear Down This U.N. Stonewall
By WILLIAM SAFIRE

Published: June 14, 2004



The secretary general of the U.N. tapped me on the shoulder at a recent luncheon and said, "May I have a word with you?"

Because several columns of mine zapped the U.N. for its cover-up of the costliest financial rip-off in history — even calling it "Kofigate" — I braced myself for an icy rebuke. But Kofi Annan assured me, in his courteous way, that the committee he had appointed to look into the oil-for-food scandal, headed by former Fed chairman Paul Volcker, would do a thorough job.

I respectfully asked if this included an inquiry into his own potential conflict of interest: when Annan's son was a consultant to Cotecna Inspections, that Swiss company won the lucrative U.N. contract to monitor the shipments of food and medicine to Saddam's sanctioned regime. Annan revealed that a competitor had protested undue influence in that contract award, and that an internal U.N. report would be delivered to the Volcker committee.

But that was further evidence of corruption containment. When the International Relations Committee of the U.S. House of Representatives on May 20 requested 55 internal U.N. audit reports on oil-for-food, Annan wrote Chairman Henry Hyde on June 2 that Volcker "believes the policy of the Organization not to release non-public documents is entirely appropriate."

I suggested that the U.N. was using Volcker, a man of spotless reputation, to control all information about the scandal. The secretary general said "I will look into this further and ask Mr. Volcker to call you."

...

This well-meaning financial wizard is determined to resist all investigative competition. "Take BNP Paribas," he says of the French-owned bank central to the financing of the U.N.'s oil-for-food debacle. "Government authorities can get their stuff, but to the extent that they're contractors of the U.N., no bank can give that up without due judicial procedure. That would violate banking law."

Let's advance this story. Two BNP Paribas sources tell me this: in a storage facility in Lower Manhattan, the bank had a large room containing some 5,000 oil-for-food file folders.

Each folder contained a copy of the bank's letter of credit authorized by a U.N. official to pay a contractor for its shipment; a Notice of Arrival monitored by Cotecna at the Iraqi port of Umm Qasr if by ship, or the Jordanian border crossing of Trebil if by truck; and a description of the contract. The original paperwork went to the Rafidain bank in Amman, Jordan; copies of the damning documents are stored by BNP Paribas in New Jersey.

Though the U.N. purchases were supposedly to supply desperate Iraqis with food or medicine, most of this evidence deals with items like construction equipment from Russia, hundreds of Mercedes-Benz limousines from Germany and thousands of bottles of perfume from France.

...

Give us the criminals. Put Annan's son, Annan, the leaders of France and Russia on trial!!! Iraqis are tired of giving blood for oil for cash!!! Bush needs to stop bowing his head to international pressure. Let us find out if these are murdering thieves who dared criticize the US.

-Rudey

[Rudey]

I found another good website that blogs coverage of the scandal. The blog entries include a lot of good articles.

http://acepilots.com/unscam/

-Rudey

[Rudey]

The New York Times (http://www.nytimes.com/2004/06/23/opinion/23SAFI.html)

The Great Cash Cow
By WILLIAM SAFIRE

Published: June 23, 2004


This was the biggest cash cow in the history of the world," says one of the insiders familiar with the $10 billion U.N. oil-for-food scandal. "Everybody — traders, contractors, banks, inspectors — was milking it. It was supposed to buy food with the money from oil that the U.N. allowed Saddam to sell, but less than half went for that. Perfume, limos, a shipment of 1,500 Ping-Pong tables, for God's sake."

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Another whistle-blower, often on the "graveyard shift" of round-the-clock operations at the U.N.'s New York Office of the Iraq Program, explains the workings of the historic rip-off:

Well-connected international traders — called "the usual suspects" by low-level U.N. staff, who knew they often fronted for sellers of luxury products — would make their deals, including kickbacks, in Baghdad. Letters of credit, as many as 150 a day, would be issued in New York by the U.N.'s favorite bank, BNP Paribas.

But before the sellers, called "beneficiaries," could be paid (at Saddam's request, in euros, harder to trace than dollars) the bank required a C.O.A., "Confirmation of Arrival," from the U.N.'s contracted inspector, Cotecna of Switzerland.

"The key was Cotecna," says my graveyard source. "Ships were lined up at the port of Umm Qasr, stacks of containers already onshore waiting for inspection. You won't believe the grease being paid. The usual suspects got preferential treatment when the U.N. bosses in New York called the BNP bank to get Cotecna to issue a C.O.A. to release the money."

Last week, Secretary General Kofi Annan claimed that my reporting of what he told me at a luncheon was "a private conversation" (no such ground rule was set) and that "some are jumping to conclusions without facts, without evidence. It is a bit like a lynching, actually."

However, my call for a Congressional subpoena to overcome his attempt to limit investigation to his internal Volcker committee has flushed out a fact not hitherto disclosed. Annan's press aide complained to The Times that a subpoena had already been served secretly on BNP Paribas (the initials once stood for Banque Nationale de Paris) by the U.S. Senate Permanent Subcommittee on Investigations.

Although the U.N. had warned its bank, as well as Cotecna, the oil monitor Saybolt and all its other oil-for-food contractors, not to cooperate with anybody but Paul Volcker — and had blown off the House International Relations Committee's requests — Annan's advisers knew it would be unseemly and foolhardy to insist that its bank fight the Senate in court.

With his subpoena and investigation thus publicly revealed by the U.N., Chairman Norm Coleman of Minnesota, a Brooklyn-born Republican, felt free to take my call. "This is a major priority for us," he says. "There's a lot of stuff to cover, a big universe of documents, and we're being aggressive about it. Yes, Cotecna, Saybolt, all of them."

He sent out four "chairman's letters," countersigned by the ranking Democrat, Carl Levin, in early June. One was to the U.S. State Department for the minutes of the "661 committee" meetings at the U.N., which reviewed oil-for-food contracts (though not yet for copies of the contracts themselves). Another to the Government Accounting Office, which had first estimated the skimming at $10 billion. Another to Paul Bremer in Baghdad for copies of documents being turned over to the interim government — and the Senate still awaits a response; apparently the White House doesn't want to offend the U.N. Finally, a friendly letter to Annan about the subpoena that would require his bank to open its letter-of-credit files.

Now let's review the investigative bidding. The Senate seems serious; though Coleman is a freshman, the subcommittee staff is experienced and nonpartisan. The House is doing what it can. The U.N. allocated $4 million to Volcker, but he hasn't yet submitted a budget or announced a staff. The New York Fed defers to its old boss, and the New York State Banking Department is overdrawn.

But since this involves possible fraud, bribery and larceny on a grand scale, where is law enforcement? Interesting: the U.S. attorney for the Southern District of New York, David Kelley, served subpoenas last week on Exxon Mobil, ChevronTexaco and Valero about Iraqi oil purchases. That deals with the income side of the scandal, the money for Iraq (less kickbacks) supposedly to buy food.

I suspect Kelley was moved to empanel a grand jury by probable competition from the Manhattan district attorney, Robert Morganthau, on the scandal's payoff side. These two offices compete, and Morganthau's office has expertise on global banking.

Without imputing wrongdoing to any individual, I suggest investigators supplement their document search by talking to people who should be in the know. At the U.N., these include Benon Sevan's deputy, Teklay Afeworki, and at the bank, Pierre Veyres and Eva Millas-Russo.

The rest of the article is at the link above.

-Rudey

[Rudey]

Kofigate Gets Going
By WILLIAM SAFIRE

Published: July 12, 2004


WASHINGTON — All our July chin-pulling about polls and veeps and C.I.A. missteps has little to do with November's election, which will be decided by unforeseeable events. Instead, let's counter-program, to examine a political corruption story beginning to gain traction that will reach warp speed in hearings and headlines next spring.

At least eight official investigations have begun into the largest financial rip-off in history: preliminary estimates from the G.A.O. point to $10 billion skimmed or kicked back or otherwise stolen in the U.N. dealings with Saddam Hussein.

Seeking to manage the news of the scandal, U.N. Secretary General Kofi Annan appointed former Fed chairman Paul Volcker to head an internal investigation. That seemed to slam the door on U.N. cooperation with truly independent inquiries, but Volcker last week announced that "appropriate memorandums of understanding with a number of official investigatory bodies are in place or in negotiation."

To overcome criticism like mine of his committee's lack of subpoena power or ability to take testimony under oath, Volcker has hooked up with Robert Morgenthau, the Manhattan district attorney, who has been prosecuting two men in an unrelated distressed debt case at BNP Paribas; that's the French bank the U.N. used for its oil-for-food letters of credit. That grand old prosecutor has a staff skilled at following money and has sitting grand juries available to encourage truth-telling.

Morgenthau's crew, in turn, has a collaborative relationship (pardon the expression) with the nonpartisan staff of the Senate Permanent Subcommittee on Investigations (P.S.I.). The U.N. has stonewalled three committees of the U.S. Congress, refusing to reveal its 55 internal audits, claiming that our State Department's members on the U.N. "661 committee" had approved all kickback-ridden contracts.

But State has been slow-walking Congressional requests for documents that reveal its own poor oversight and that embarrass the U.N., which it now wants to placate. State could impede the hunt overseas through mutual legal-assistance treaties, and can continue to diddle the House committees of Henry Hyde and Chris Shays, but our diplomats cannot evade chairman's letters from the Senate P.S.I.

Who else is on the trail of the skimmed billions, much of it owed to those Kurdish Iraqis shortchanged by U.N. dispensers of largess? Playing catch-up to Morgenthau, a Justice Department U.S. attorney in New York has subpoenaed records of several American oil companies; our Treasury Department charged a couple of minor players with illegal transactions with Iraq.

Meanwhile, back in Baghdad, where much of the grandest larceny ignored by the U.N. originated, the investigation by the old Governing Council was stopped by Paul Bremer because its leaks alerted the world and upset the U.N. The search for damning documents was re-launched under non-Chalabi auspices, but the chairman of Iraq's Supreme Audit Board, Ihsan Karim, was killed on his way to work two weeks ago. Criminal enterprises have heavy money at stake in this.

Volcker, still in a start-up stage after four months, assures The Wall Street Journal he hired a great senior staff. But one is Richard Murphy, former ambassador to Saudi Arabia and a veteran Arab apologist on TV. Will he prevail on Jordan's king to get the Philadelphia Investment Corporation in Amman to open its files about financing favored "beneficiaries"? Or dare to demand the United Arab Emirates order its Al Wasel and Babel trading company to explain the lucrative electrical projects that had nothing to do with food?

Another is Prof. Mark Pieth of the University of Basel, of high repute in countering money laundering. Key to the transmission of oil-for-food funds is Cotecna Inspections, a Swiss corporation that got the U.N. contract to monitor deliveries and whose "notice of arrival" was pure gold to corrupt sellers. Mr. Annan's son was its consultant just before the fat contract was issued; even after a U.N. audit showed suspicious inspection inadequacies, Cotecna's contract was expanded. Professor Pieth's work will be judged on whether he can crack Swiss government secrecy to reveal the goings-on at Cotecna.

Read the rest: http://www.nytimes.com/2004/07/12/opinion/12SAFI.html?hp

-Rudey

[Kevin]

The UN is starting to look like an international organized crime ring. They have many great people on the ground, but a few bad apples can cause some real problems.

I really hope that the UN gives Volker all the power he needs to investigate this thing, but it seems as though they may be more interested in saving face.

[moe.ron]

Originally posted by ktsnake
The UN is starting to look like an international organized crime ring. They have many great people on the ground, but a few bad apples can cause some real problems.

I really hope that the UN gives Volker all the power he needs to investigate this thing, but it seems as though they may be more interested in saving face.

Most of the problem people stem from those being forced in by the governments from all over the world. There are a lot of incompetent people in NY that is frustrating those of us on the ground.

BTW, we are still waiting for the AIDS funding Bush promised Africa earlier this year.

[Rudey]

Originally posted by moe.ron
BTW, we are still waiting for the AIDS funding Bush promised Africa earlier this year.

I heard the French decided to cover that bill with the blood money they got through the Iraqi sanctions.

-Rudey

[Kevin]

Originally posted by moe.ron
Most of the problem people stem from those being forced in by the governments from all over the world. There are a lot of incompetent people in NY that is frustrating those of us on the ground.

BTW, we are still waiting for the AIDS funding Bush promised Africa earlier this year.

That was October of last year actually. 15 billion, right?

[moe.ron]

Originally posted by ktsnake
That was October of last year actually. 15 billion, right?

Yebo. I shouldn't say we cause I'm not with the UNAIDS. But I do know that the SADC secretariat is still waiting for the money.

[Rudey]

http://www.nytimes.com/2004/08/13/international/middleeast/13food.html?pagewanted=all&position=

Under Eye of U.N., Billions for Hussein in Oil-for-Food Plan
By SUSAN SACHS and JUDITH MILLER

Published: August 13, 2004

Toward the end of 2000, when Saddam Hussein's skimming from the oil-for-food program for Iraq kicked into high gear, reports spread quickly to the program's supervisors at the United Nations.

Oil industry experts told Security Council members and Secretary General Kofi Annan's staff that Iraq was demanding under-the-table payoffs from its oil buyers. The British mission distributed a background paper to Council members outlining what it called "the systematic abuse of the program" and described how Iraq was shaking down its oil customers and suppliers of goods for kickbacks.

When the report landed in the United Nations' Iraq sanctions committee, the clearinghouse for all contracts with Iraq, it caused only a few ripples of consternation. There was no action, diplomats said, not even a formal meeting on the allegations.

Since the fall of Mr. Hussein, the oil-for-food program has received far more scrutiny than it ever did during its six years of operation. Congress's Government Accountability Office, formerly the General Accounting Office, has estimated that the Iraqi leader siphoned at least $10 billion from the program by illicitly trading in oil and collecting kickbacks from companies that had United Nations approval to do business with Iraq. Multiple investigations now under way in Washington and Iraq and at the United Nations all center on one straightforward question: How did Mr. Hussein amass so much money while under international sanctions? An examination of the program, the largest in the United Nations' history, suggests an equally straightforward answer: The United Nations let him do it.

"Everybody said it was a terrible shame and against international law, but there was really no enthusiasm to tackle it," said Peter van Walsum, a Dutch diplomat who headed the Iraq sanctions committee in 1999 and 2000, recalling the discussions of illegal oil surcharges. "We never had clear decisions on anything. So we just in effect condoned things."

As recently as February, the official position of the United Nations office that ran the program was that it learned of the endemic fraud only after it ended. But former officials and diplomats who dealt directly with the program now say the bribery and kickback racket was an open secret for years.

In blunt post-mortem assessments, they describe the program as a drifting ship - poorly designed, leaking money and controlled by a Security Council that was paralyzed by its own disputes over Iraq policy.

The program, created in 1996, was an ambitious attempt to keep up international pressure on Iraq to disarm while helping the Iraqi people survive the sanctions imposed on the Hussein government after its invasion of Kuwait in 1990.

The entire effort was financed by the sale of Iraqi oil. A political compromise allowed Iraq to decide to whom it would sell its oil and from whom it would buy relief supplies. It was up to the United Nations to make sure that the price Iraq set for the oil was fair and that the proceeds were buying relief goods, and not being funneled to Mr. Hussein's coffers or being used for illicit arms.

As the flow of money ballooned, the United Nations, with an annual budget of just $1.5 billion, was responsible for collecting and disbursing as much as $10 billion a year in Iraqi oil revenues. Even as the fraud engineered by Mr. Hussein's government became widely understood, the officials said, neither the Security Council nor United Nations administrators tried to recover the diverted money or investigate aggressively.

The work of the Office of the Iraq Program, which administered the oil-for-food activities, and of its former director, Benon V. Sevan, is the focus of an independent United Nations investigation headed by Paul A. Volcker, the former Federal Reserve chairman. His panel is looking into the broader charges of mismanagement and corruption in the program, as well as specific accusations that United Nations officials, including Mr. Sevan, took kickbacks.

Mr. Volcker announced in a news conference on Monday that his panel would need at least $30 million and probably a year to determine whether the charges are justified. Despite an elaborate system in the United Nations for overseeing oil-for-food contracts, corruption never seemed to be the chief concern of anyone involved. The United States and Britain were focused on keeping material related to illicit weapons out of Iraq. Other nations that had greater financial stakes in Iraq, including France and Russia, favored lifting the sanctions. And for the United Nations bureaucracy, diplomats said, the priority was keeping goods flowing to the Iraqi people.

In the halls of the United Nations, the program became a battleground for the competing commercial interests and political agendas of the 15 individual nations that made up the Security Council, diplomats said. Those same nations made up the Iraq sanctions committee, which took action only by a consensus that could be blocked by any member.

The result was a paralysis that translated into acquiescence toward matters like oil kickbacks. Annual reports of the sanctions committee reflect the limp reaction to repeated signs of corruption.

For instance, at a meeting in 2002, an annual report said, the sanctions committee "considered a report from the Islamic Republic of Iran on the interception of an alleged oil-smuggling attempt in its territorial waters," adding, "The committee took note of this information."

When the committee learned from a press report in late 2001 of allegations that an Indian company was helping Iraq purchase embargoed materials for a nuclear fuel plant, the United States and Britain pressed for an investigation. Two committee members said the panel debated for months whether to urge India to investigate. "Discussions on the matter remain inconclusive," the committee said in its 2002 report.

While the diplomats were deadlocked over how to address violations of the sanctions, money and contracts continued to flow through the Office of the Iraq Program.

Mr. Sevan, the Cypriot who headed the program, has denied that he received any kickbacks and would only say in a statement that his office was not responsible for ferreting out corruption. Congressional investigators this year disputed that claim, citing United Nations resolutions.

Evidence of fraud passed from office to office in a round robin ending nowhere. A former State Department official who was part of an interagency committee that reviewed trade contracts with Iraq said the group detected "abnormalities in pricing that suggested fees and kickbacks." The former officials said the committee "asked why Iraq needed to import gilded tiles for palaces, or liposuction equipment."

Peter Burleigh, who was the deputy American representative to the United Nations in the late 1990's, said those concerns had been relayed to Mr. Sevan's office. Mr. Sevan's office said it had passed information regarding suspicious contracts to the sanctions committee, on which the United States held a permanent seat.

Even after the committee received reports that suppliers were padding their contracts to hide payoffs, the committee never rejected a contract because of cost, according to recent Congressional reports and former United Nations officials.

Mr. Sevan's chief interest was to avoid deadlocks over relief supplies, said Michel Tellings, one of the three oil overseers who monitored Iraq's oil sales for the United Nations.

"Benon saw that he had a divided Security Council in front of him and was more concerned about getting the food in and the oil out," Mr. Tellings said. "So he took a middle way and didn't investigate problems. He'd say, 'If you've got clear evidence, I've got to go to the Security Council. If it's a rumor, don't bother.' " The lack of coordination in the program was evident in the fact that while United Nations auditors produced 55 reports on the program over the years, several diplomats on the sanctions committee said in interviews that they never even saw them.

In the end, a complicated set of political and financial pressures kept the program ripe for corruption.Mr. van Walsum, the retired Dutch diplomat, said he sometimes suspected that his fellow diplomats were disinclined to hear about potential fraud because they were concerned about protecting the interests of friendly companies and foreign allies eager to trade with Iraq.

"Everyone," he said, "was living in the same glass house."

A System Ripe for Picking

The oil-for-food program was established to get food and medicine to the Iraqi people and to counter Mr. Hussein's claims that sanctions were solely responsible for the widespread malnutrition in Iraq after the embargo was imposed in 1990.

Iraq was not prohibited from buying food and medicine; it just was not using its money for that purpose. By modifying the oil sanctions, the Security Council wagered that it might gain enough leverage to force Iraq to buy more relief goods.

On one level, the program worked well. According to Congress's General Accounting Office, the program provided food, medicine and services to 24 million Iraqis. Malnutrition rates for children fell. But along the way, the Security Council approved provisions that opened the program to corruption.

Mr. Hussein agreed to the program in 1996 only after winning a major concession: While the United Nations would control oil revenues, Iraq could negotiate its own contracts to sell oil and to purchase supplies. That arrangement, according to the General Accounting Office, "may have been one important factor in allowing Iraq to levy illegal surcharges and commissions."

Then in 1999, the Security Council removed all restrictions on the amount of oil Iraq could sell. And the Office of the Iraq Program was given power to approve contracts for a range of items - food and medicine, agriculture and sanitation equipment - without approval from the Council's sanctions committee.

Meanwhile, the United States and Britain were delaying the approval of billions of dollars in contracts that they feared would provide Iraq with material or equipment that could be used for the development of weapons of mass destruction. Those "holds" on contracts deeply concerned the United Nations officials trying to improve Iraqi living conditions, and drew objections from members of the Security Council that favored a freer flow of commerce with Iraq.

Countries that supported the continuation of sanctions came to see the relief aid side of the program as secondary. As Mr. van Walsum put it, "oil for food meant oil not for W.M.D. "

Facing pressure from other nations, the United States and Britain agreed to further compromises in the sanctions system.

Special Interests in Council

Under Security Council resolutions and the oil-for-food program, all of Iraq's oil revenues were to be paid into a United Nations bank account to be used for relief goods. But Iraq's booming trade in illicit oil continued under the eyes of the Council.

Iraq's suppliers included Russian factories, Arab trade brokers, European manufacturers and state-owned companies from China and the Middle East. In one instance, American officials in Iraq found, Syria had been prepared to kick back nearly 15 percent on its $57.5 million contract to sell wheat to Iraq. And some of the world's biggest oil traders and refineries did business with Baghdad, including Glencore, a Swiss-based trading company.

Different Security Council members had different levels of tolerance for the abuse, said Mr. Tellings, the former oil overseer.

When the United States and others wanted the sanctions committee to confront Syria on oil sales, they were blocked by Russia and France, which argued that Syria should not be singled out when the Americans refused to investigate Iraq's equally lucrative oil trade with their allies, Jordan and Turkey.

Congressional investigators have estimated that Iraq collected $5.7 billion from selling oil outside United Nations supervision, while the oil-for-food program was chronically short of money for relief supplies.

"They could have done a cost analysis of at least what Saddam was selling to Syria," said Hans von Sponeck, a longtime United Nations diplomat who resigned as relief aid coordinator for Iraq in 1999, "and then ask Iraq for a credit to the oil-for-food program because there was never ever money enough for the minimal needs of the people."

John D. Negroponte, then the American ambassador to the United Nations and now to Iraq, defended the special treatment given to Jordan and Turkey that let them pay Iraq directly for oil either in cash or barter goods. Both countries were suffering economically from the sanctions, he told a Senate committee this year.

He demurred when asked by Senator Christopher J. Dodd who benefited from the unsupervised oil sales. But the senator said he had few doubts.

"Wouldn't it be a pretty good guess," he said, "that they probably ended up in the pockets of Saddam Hussein and his cronies?" Mr. Dodd asked.

Mr. Negroponte replied, "I just don't know, sir."

Hussein the 10 Percenter

The Hussein government demanded kickbacks on almost every contract it negotiated, beginning in 2000, according to documents from Iraqi ministries obtained by The New York Times this year.

Senior Iraqi leaders ordered ministries to notify companies that they had to pay an amount equal to 10 percent of the contract value into secret foreign bank accounts, a violation of the United Nations sanctions. To do so, Iraqi officials said, suppliers would deliberately inflate the prices of their goods.

On a $500,000 contract for trucks, for instance, Iraq would tell the supplier to prepare a contract for $550,000, with a side agreement promising to transfer the $50,000 add-on to an Iraqi-controlled bank account.

A shakedown plan of such magnitude - $33 billion worth of goods were ordered by Iraq from mid-2000 until the American-led invasion last year - did not go unnoticed.

"When the 10 percent came in, companies came and asked us what to do," said Jacques Sarnelli, who was the commercial counselor of the French Embassy in Baghdad at the time. "We said it's illegal, you do it at your own risk, we don't want to know about it, and we are against it."

From his vantage point, he said, pinpointing evidence of a kickback would have been difficult. "It was a shadow part of the business," he said.

At United Nations headquarters in New York, diplomats said the officials administering the program were more concerned about relief supplies. Mr. Sevan, who headed the Office of the Iraq Program, repeatedly appealed to the sanctions committee to speed up contracts for equipment, food and other goods.

Mr. Sevan's office was supposed to examine the contracts to ensure price and quality. But it was "unclear" how it fulfilled that responsibility, according to the General Accounting Office.

At the sanctions committee, news of the systematic 10 percent kickback scheme prompted some public hand-wringing. Some diplomats, reacting to news reports, said they wished, but did not expect, companies to come forward and provide information.

Ole Peter Kolby, a Norwegian diplomat who succeeded Mr. Van Walsum as chairman of the sanctions committee, expressed hope for "hard evidence," but then added, "I guess also companies that do that are not likely to tell anybody."

Read the rest at above link.

-Rudey

[NickLc24]

I know someone that felt the affects of this 'under-the-table' dealing firsthand. This person happens to be the company commander of an aviation unit consisting of Apache Longbow gunships. Due to the Iraqis acquiring some type of GPS scrambler, he had his guys purchase back-up portable GPS devices prior to deploying.

Pretty dark stuff once you know someone's life is at stake...I guess money makes the world go round, huh?

[Rudey]

Report: UN profited from illicit Iraqi oil sales
Associated Press Oct. 7, 2004

Vivid allegations of widespread corruption at the UN oil-for-food program by the top US arms inspector have added credibility to accusations the United Nations looked the other way while Saddam Hussein's government skimmed billions of dollars and offered kickbacks to European and Arab countries and officials.

The inspector's report implicates the top UN official overseeing the $60 billion program, accusing him of accepting bribes in the form of vouchers for Iraqi oil sales, and details Iraqi manipulation to illegally enrich Saddam's government and influence Security Council members.

The alleged schemes included an Iraqi system for allocating lucrative oil vouchers, which permitted recipients to purchase certain amounts of oil at a profit, according to the report issued Wednesday by Charles Duelfer, head of the Iraq Survey Group.

He said the Iraqi government manipulated the UN program from 1996 to 2003 in order to acquire billions of dollars in illicit gains and to import illegal goods, including parts for missile systems.

Responding to the report, a high-ranking Republican congressman demanded the United Nation's independent inquiry into the scandal speed up its timetable and release closely held documents to Congressional investigators.

"The world cannot wait years for answers to the growing body of evidence implicating senior UN officials in outright corruption," said Rep. Henry Hyde, who chairs the House International Relations Committee.

"Immediate public access to UN internal audits and other documents - thus far denied to members of the Security Council - is imperative if the world body is to escape further damage to its credibility as a result of this grossly mismanaged program."

Secretary-General Kofi Annan in April appointed former Fed chairman Paul Volcker to lead an independent investigation and he has said his committee will not deliver a report before mid-2005. Volcker has refused to share with Congress documents for their probes, including 55 internal audits of the oil-for-food program produced by the United Nations.

The Duelfer report said that Benon Sevan, the former chief of the UN program, is among dozens of people who allegedly received secret oil vouchers, with Saddam personally approving the list of recipients. The voucher list was dominated by Russian, French and Chinese recipients, in that order, with Saddam spreading the wealth widely to prominent business leaders, politicians, foreign government ministries and political parties, the report said.

The report names former French Interior Minister Charles Pasqua, Indonesian president Megawati Sukarnoputri and the Russian radical political figure Vladimir Zhirinovsky as voucher recipients, for example, and other foreign governments range from Yemen to Namibia.
Zhirinovsky denied the allegations.

"I never took a drop (of oil), or a single dollar from Iraq or from any other country. I have never dealt with oil," Russia's Interfax news agency cited Zhirinovsky as saying Thursday. "I do not care what (bribes) someone might have received. I personally gained nothing."

Zhirinovsky has visited Iraq frequently and called for increased trade between the two countries.

The oil companies mentioned included top Russian producers Yukos and Lukoil. Company officials could not immediately be reached to comment on the allegations.

The governments of Jordan, Syria, Turkey and Egypt did a brisk illicit oil trade with Iraq as well - more than $8 billion from 1991 until 2003, the report said: "These governments were full parties to all aspects of Iraq's unauthorized oil exports and imports."

The officials whose names have emerged amid multiple investigations have denied wrongdoing. The oil-for-food program was designed to allow limited oil sales to pay for humanitarian goods.
Asked about the fresh allegations against Sevan, UN spokesman Fred Eckhard said, "We are not going to comment on any specific allegation against Mr. Sevan or anyone else."

"This is in the hands of Paul Volcker," he added. "We are cooperating with him fully. Benon Sevan is cooperating with him fully, and we will wait for Volcker's judgment. Benon, meanwhile, stands by his statement that he's done nothing wrong."

Critics of the oil-for-food program and US congressional investigators have long alleged that administration of the program was rife with corruption and failed to prevent illicit business deals and massive kickbacks to the Iraqi government.

The report said Saddam was able to subvert the oil-for-food program to generate an estimated $1.7 billion in revenue outside UN control from 1997-2003. And it said the voucher program, "provided Saddam with a useful method of rewarding countries, organizations and individuals willing to cooperate with Iraq to subvert UN sanctions."

-Rudey

[RACooper]

Hey Rudey I find it interesting that the UK and US individuals and companies were deleted from the list.... obsentively because for reasons of privacy. Guess it's only relavent to the current politcal climate if your on the "Coalition of the Willing's" shit-list huh?

BBC Link:
http://news.bbc.co.uk/1/hi/world/middle_east/3722270.stm
Names of US companies or citizens found on the secret Iraqi lists were left out of the report on grounds of the US Privacy Act, the ISG report notes.

[KSig RC]

Originally posted by RACooper
Hey Rudey I find it interesting that the UK and US individuals and companies were deleted from the list.... obsentively because for reasons of privacy. Guess it's only relavent to the current politcal climate if your on the "Coalition of the Willing's" shit-list huh?

BBC Link:
http://news.bbc.co.uk/1/hi/world/middle_east/3722270.stm


That may be the case for the British companies, but I'm pretty sure that there is a governmental form of a NDA that the CIA is legally bound to uphold in these cases. This may or may not apply to 'allies' - whether that's a political convenience, I can't say.

[Rudey]

Originally posted by RACooper
Hey Rudey I find it interesting that the UK and US individuals and companies were deleted from the list.... obsentively because for reasons of privacy. Guess it's only relavent to the current politcal climate if your on the "Coalition of the Willing's" shit-list huh?

BBC Link:
http://news.bbc.co.uk/1/hi/world/middle_east/3722270.stm

They weren't deleted from the list. Our laws prevent their privacy. I am sure that they will also be investigated if they haven't.

Regardless it talks about who the majority of names and companies were on that list doesn't it Cooper who can't think?

-Rudey
--So stop making accusations that are irrelevant.

[Rudey]

Well look at the French took in that blood money...yay.

http://www.nytimes.com/2004/10/13/opinion/13safi.html?hp

Duelfer to France: J'accuse!
By WILLIAM SAFIRE

Published: October 13, 2004

Powerful officials and their profiteering friends in France had a reason to try to stop the U.S. from overthrowing Saddam Hussein: they were pocketing billions in payoffs through a United Nations oil-for-food front.

That's the import of the Duelfer report. This nonpartisan investigation team found not only documents "giving economic favors to key French diplomats or individuals that have access to key French leaders," but also got Saddam's mouthpiece, Tariq Aziz, to sing about their purpose: "According to Aziz, both parties understood that resale of the oil was to be reciprocated through efforts to lift U.N. sanctions, or through opposition to American initiatives within the Security Council."

Charles Duelfer's group put on the public record the name of Charles Pasqua, France's former interior minister and now a senator. Pasqua denied all to the BBC and fingered ex-associates: "maybe other former ministers are involved."

The former French ambassador to the U.N., Jean-Bernard Mérimée, is listed as receiving vouchers for 11 million barrels of oil from Saddam, the proceeds from which would beat a diplomat's pay. Another of President Jacques Chirac's friends receiving Saddam's U.N. largesse is Patrick Maugein, "whom the Iraqis considered a conduit to Chirac," according to the report.

Maugein, 58, whose association with Chirac has occasionally been chronicled by the French journalist Karl Laske, is chairman of Soco, an oil company active in Vietnam. He's down for 13 million barrels. French oil companies Total and Socap got about 200 million barrels.

A name that keeps coming up in my poking around is Marc Rich, the American billionaire who was for many years a fugitive, until blessed with one of Bill Clinton's midnight pardons. Rich's company Trafigura, spun off from the Swiss-based Glencore, and its possible dealings with outfits like Jean-Paul Cayre's Ibex have excited the interest of many of the sleuths I've spoken to.

France's diplomats here are apoplectic, calling the unconfirmed Duelfer reports "unacceptable." They note in high dudgeon that U.S. firms involved in the U.N.'s corrupt caper are not named by the U.S. team and deride our excuse about "privacy laws."

However, within 24 hours of the damning report's issuance, Judith Miller and her colleagues had the names of the U.S. companies involved - Chevron, Mobil, Texaco, Bay Oil and one Oscar Wyatt Jr. of Houston, who may have profited by $23 million - on the front page of The New York Times. (Will our runaway anti-press prosecutor try to clap Judy in jail for protecting her confidential government sources on this one, too?)

The Senate's Permanent Subcommittee on Investigations has issued seven subpoenas and a dozen hard-to-ignore chairman's letters from Senator Norm Coleman to companies in the U.S., as well as to multinationals doing business here. I hear the committee has met no legal resistance so far. Ben Pollner, head of Taurus Oil, active in Iraq all through the oil-for-food fiasco, stiffed Manhattan D.A. Robert Morgenthau's men. (Pollner tells me his dealings were legal, but he clammed up to investigators because he remembers Martha Stewart.)

What also miffs the French is that Russian officials and oligarchs were able to rip off even more than France's predators. Vladimir Zhirinovsky made out like a bandit when his party had some power; so did "the office of the Russian president" and the Peace and Unity Party, both headed by the unmentionable Putin.

As the hares zoom by, Paul Volcker, the U.N. investigative tortoise, tells his people to forget the French and Russians and to concentrate on Kofi Annan's right-hand man, Benon Sevan, and Kofi Annan's son's relationship with Cotecna, the U.N.'s see-no-evil "monitor," The White House is wringing its hands because it needs the U.N.'s blessing on the Iraqi election, and John Kerry must be praying not to be asked about this in tonight's debate.

If I were a French reporter and wanted to lose my job at Chirac's Le Figaro in a hurry, I would drop in at 24 Boulevard Princess Charlotte in Monaco and ask if Patrick Maugein, Rui de Souza or Mario Contini has dropped by to see if Toro Energy and the African Middle East Petroleum company are still there? If that's a blind alley, try the casino.

-Rudey

[Rudey]

http://www.nytimes.com/2004/11/15/opinion/15safire.html?oref=login&hp

The New York Times

November 15, 2004

U.N. Obstructs Justice
By WILLIAM SAFIRE

Washington — "I'm angry that we find the U.N. proactively interfering with our investigation," Senator Norm Coleman, chairman of the Senate Permanent Subcommittee on Investigations, informed Lou Dobbs on CNN, "by telling certain folks not to cooperate with us." He repeated for emphasis his sharp response to Secretary General Kofi Annan's "interfering with our ability to get information we need" about the oil-for-food scandal.

Judith Miller of The Times had revealed that the Minnesota Republican, joined by ranking Democrat Carl Levin, sent a letter noting Annan's four-month foot-dragging and that "the U.N. is hindering our efforts to obtain relevant documents."

If legislative investigators were prosecutors, the name of the game Annan and his enablers are playing would be called "obstruction of justice."

The principal investigating body of the Senate is not helpless. Today witnesses from Treasury and C.I.A., as well as its own investigators, will present evidence that the huge rip-off engineered by Saddam Hussein - with the connivance of corrupt U.N. officials and companies protected by Security Council members like Russia and France - was even greater than the $10 billion figure estimated by our G.A.O. Going back to 1991 and including the predecessor to oil-for-food, an outside source tells me that the U.N.-maladministered profiteering reached $23 billion. Such heavy spending affects U.N. votes.

The Senate, as it returns to lame-duck work this week, will subpoena evidence through the U. S. connections of companies like Lloyd's Register Inspection Ltd., which Annan's consultant, Paul Volcker, has so far "proactively" kept from cooperating. And there is the budget option: if the U.N. persists in obstruction, the U.S. can re-examine its contribution to an unaccountable organization.

But the Congress is not dependent on one Senate committee alone. In the House, Henry Hyde's International Relations Committee is holding hearings Wednesday. Though there will be overlap - Charles Duelfer will be busy explicating the oil-for-food section of his C.I.A. report this week - its emphasis has been on following the illicit money through the banking system.

BNP Paribas, the European bank eager to expand in the U.S., has cooperated with "friendly subpoenas" that Annan's aides could not stop through their "gag letters"; its present and past officials will testify about its thousands of letters of credit. But what about "know your customer" rules? What did our Federal Reserve officials know about sloppy banking procedures, and how long did it take for those regulators to put suspect banks under supervising action? The Fed's Herbert Biern may have some explaining to do about the failure of financial and diplomatic oversight.

If the U.N. stonewalling continues this week, Chairman Hyde's patience could at last wear thin; as former chairman of Judiciary, he knows something about criminal referrals. Such an action directed at recalcitrant bankers, brokers or U.N. inspection contractors would at last get high-level attention at the Justice Department, where U.S. attorneys have been tediously poking around U.S. oil companies for leads on kickbacks.

Kofi Annan's longtime right-hand man, Benon Sevan, headed the U.N.'s Office of the Iraq Program; he has been retired but has been vociferously denying wrongdoing ever since his name appeared on a list of beneficiaries of Saddam's largesse in the form of vouchers for oil deals.

Annan's obstruction of outside investigations has strong support within the U.N. members whose citizens are most likely to be embarrassed by revelations of payoffs: Russia, France and China lead all the rest. He has dutifully continued to align himself with their interests by declaring the overthrow of Saddam "illegal" and recently denouncing our attack on the insurgents in Falluja. Perhaps he thinks that this confluence of national interest in cover-up - along with the unwillingness of most media to dig into a complicated story - will let his stonewalling succeed. He reckons not with an insulted Congress.

Sad to see is the secretary general's manipulative abuse of Paul Volcker. Here is a former central banker so confident of his hard-earned reputation for integrity that he cannot see how it is being shredded by a web of sticky-fingered officials and see-no-evil bureaucrats desperate to protect the man on top who hired him to substitute for - and thereby to abort - prompt and truly independent investigation.

-Rudey

[Rudey]

So the question is did Chirac, Putin, and Annan bathe together in Iraqi blood or did they do it separately?


The New York Times

http://www.nytimes.com/2004/11/16/politics/16food.html

THE OIL-FOR-FOOD PROGRAM
Panel Pegs Illicit Iraq Earnings at $21.3 Billion

By JUDITH MILLER

Published: November 16, 2004


WASHINGTON, Nov. 15 - A Senate committee investigating the United Nations oil-for-food program for Iraq estimates that during 13 years of international sanctions, Saddam Hussein's government made at least $21.3 billion illicitly - more than double previous government estimates.

Senator Norm Coleman, the Minnesota Republican who is chairman of the Senate's Permanent Subcommittee on Investigations, said at a subcommittee hearing on Monday that he doubted that fraud and abuse on this scale could have gone undetected by senior United Nations officials or their American counterparts. Because it was unknown where the illicit money ended up, he said, he was worried that it may be helping to finance the insurgency in Iraq.

The United Nations aid program for Iraq ran from 1996 to 2003, easing some of the effects of the sanctions by allowing the country to make monitored sales of oil and use the money to purchase aid like food and medicine. Since then, there has been growing evidence that Mr. Hussein's government exploited the program with a campaign of illicit oil sales, illegal surcharges and kickbacks, as well as bribes aimed at lifting sanctions.

Senator Coleman said the huge scale of fraud and theft while United Nations penalties were in effect had created a "dark stain" over the world organization that raised questions about whether it could put in place and monitor any sanctions.

Questions about how much money was siphoned away from the oil-for-food program, and the money's ultimate use, were particularly troubling, he added, because of allegations that Benon V. Sevan, who was in charge of the United Nations program, had benefited from special allocations of oil from Mr. Hussein.

Mr. Sevan has repeatedly denied any wrongdoing.

However, Charles A. Duelfer, the top American weapons investigator in Iraq, who was the Senate panel's first witness, told the committee on Monday that based on Iraqi documents and what Iraqi officials had told him, he believed that Mr. Sevan had been given 13 million barrels of oil in special oil allocations.

The subcommittee's new higher estimates of Iraq's illicit gains are based on evaluations of earlier studies by the Government Accountability Office, the Pentagon, the Congressional Budget Office and Mr. Duelfer's Iraq Survey Group, along with new information and a million pages of documents secured by the Senate panel over its seven-month investigation.

Specifically, the panel estimated that Iraq made $3.9 billion from oil smuggling before the oil-for-food program was created in 1996; $4.4 billion in kickbacks on aid contracts; $241 million in illegal surcharges on the sale of Iraqi oil; $2.1 billion from the sales of substandard goods under the program; $9.7 billion from oil smuggling under the program; $405 million from abuses in aid contracts in the northern, mostly Kurdish, part of Iraq that Mr. Hussein did not directly control; and $403 million from the investment of its illicit income overseas.

The documents, some of which were released Monday, also show how Iraqi officials, foreign companies, politicians and journalists benefited from Mr. Hussein's efforts to undermine support for sanctions and secretly gain money to build palaces and buy weapons.

Senator Carl Levin, Democrat of Michigan, the panel's ranking minority member, said three-quarters of Iraq's illicit income came from trade protocols with Jordan and Turkey that the Clinton and Bush administrations had known about and "winked at" because support from those countries was vital.

But Mr. Duelfer, in testimony before the Senate panel, insisted that although the protocols provided Iraq with illicit income, Mr. Hussein was successfully using illegal proceeds specifically from the oil-for-food program to undermine support for the sanctions that the United Nations imposed after Iraq's 1990 invasion of Kuwait.

Mark L. Greenblatt, a counsel for the Senate panel, said that beginning in 1998, Mr. Hussein had tried to "manipulate the typical oil allocation process in order to gain influence throughout the world." Rather than let traditional oil companies buy oil, he said, Mr. Hussein "gave oil allocations to officials, journalists and even terrorists, who then sold their allocations to the traditional oil companies in return for a sizable commission."

A document released Monday showed such payments to a Syrian journalist, Hamidah Nana, who said in an interview in 2003 that she was working hard to get sanctions against Iraq lifted. When Ms. Nana made the statement, Mr. Greenblatt said, she had already received oil allocations totaling 10 million to 12 million barrels of oil, and had made a profit, according to Iraq's Oil Ministry, of $1.4 million from transfer of the vouchers to a Panama-based company.

Steven Groves, another of the subcommittee's counsels, said documents showed that Mr. Hussein had demanded kickbacks from companies who were supplying Iraq with food and medical aid. His presentation focused on payments by French and United Arab Emirates-based subsidiaries of the Weir Group, of Glasgow, which produces industrial valves for the oil industry.

-Rudey

[PhiPsiRuss]

http://www.lexnotes.com/misc/jacques_iraq2.jpg

They make a lovely couple.

[Rudey]

Look how the blood stains their pretty diplomatic hands.



The New York Times

http://www.nytimes.com/2004/11/29/opinion/29safire.html?oref=login&hp

'My Son, My Son'
By WILLIAM SAFIRE

Published: November 29, 2004

Washington — Thanks to Claudia Rosett, an enterprising reporter writing in The New York Sun, the world now knows that some information put out by Secretary General Kofi Annan about his son's involvement with a Swiss inspection company at the heart of the U.N. oil-for-food scandal is untrue.

At a luncheon at "21" in New York this summer, Annan came over to me to complain politely that my series suggesting U.N. maladministration was unfair. When I asked about the consultant fee paid to his son Kojo that may have influenced the award of a U.N. contract to Cotecna Inspection, the secretary general said that the allegation (originally reported in The Sunday Telegraph in London) had been "thoroughly investigated" by the U.N. and there was "nothing to it."

He later insisted that ours was a "private conversation" (though no off-the-record restriction was requested or given), but this denial was consistent with Kofi's public statement in April about the contract award: "Neither he nor I had anything to do with the contracts for Cotecna." Note the plural "contracts" - after a low-ball bid, a later contract was much more lucrative - and his clear indication that his son joined him in denial.

The story put out by the U.N. Secretariat at the time was that the son, Kojo, had resigned from Cotecna just weeks before the U.N. switched its fast-growing inspection business to the Swiss firm. Though such a timely termination looked fishy on its face, the absence of post-contract payments to Kofi's son was the basis for the U.N.'s claim that there had been no conflict of interest or nepotism.

Last week the truth was outed. The U.S. attorney's office in New York is in competition with the U.N.'s "independent" investigation, whose Paul Volcker - while stonewalling angry Congressional investigators - has grand jury help from the Manhattan district attorney's office. I suspect a subpoena forced Kojo to hire a lawyer, whom reporter Rosett tracked down and The Sun had its first world beat.

The lawyer confirmed that Kojo received payments of $2,500 per month for four years after he supposedly severed his relationship with Cotecna - up to February of this year, when Iraqis blew the lid off the U.N.-Saddam-French-Russian conspiracy.

When confronted with the falsity of previous U.N. denials, the secretary general's spokesman, Fred Eckhard, pleaded: "There is nothing illegal in this." You see, um, the payments to Annan's son were part of an "open-ended no-compete contract." After all, what could be illegal about getting paid for not joining a competing inspection company, which Cotecna probably took as assurance that nobody else would get the inside track?

"We previously thought they had ceased," Annan's embarrassed aide said of the payments. He stuck grimly to the line that U.N. officials "who gave Cotecna the contract had no idea that Kojo Annan worked for Cotecna," but carefully left himself an out: "and that continues to be our belief."

In the same way, there are still officials of the oil-stained U.N. Secretariat who profess to believe the repeated denials of Benon Sevan, the longtime right-hand man of Kofi Annan put in charge of what became history's largest swindle.

Of course, in a $20 billion ripoff, $125,000 to the boss's son for doing nothing is chump change. But it should lead to questions for the son: what are his associations with families in the oil industry? (Yamani or ya life!) Did he lie to his father about four years of fees from Cotecna, or did Kofi fail to ask him? Did Kojo inform Sevan about the fees, or know about any lucrative oil vouchers given by Saddam to Sevan?

For the father: Will he now share with Congress, which supplies 22 percent of the U.N. budget, his "thorough investigation" of his son's Cotecna connection? Did he learn of the "nothing illegal" fees only last Tuesday, as his aides say? Has he since asked his Absalomic son if the secretary general can stand by his April "nothing to do with" statement about Cotecna?

This marks the end of the beginning of the scandal. Its end will not begin until Kofi Annan, even if personally innocent, resigns - having, through initial ineptitude and final obstructionism, brought dishonor on the Secretariat of the United Nations.

-Rudey

[PhiPsiRuss]

Originally posted by Rudey
This marks the end of the beginning of the scandal. Its end will not begin until Kofi Annan, even if personally innocent, resigns - having, through initial ineptitude and final obstructionism, brought dishonor on the Secretariat of the United Nations.Its funny how there are no demonstrations for his resignation.

[Rudey]

The New York Times

http://www.nytimes.com/2005/02/04/international/04sevan.html?oref=login


U.N. Diplomat Reportedly Sought Iraqi Oil Deals for Egyptian
By SUSAN SACHS

Published: February 4, 2005


Benon V. Sevan, a career United Nations diplomat who headed the oil-for-food program for Iraq, solicited favors from Saddam Hussein's government on behalf of an Egyptian trader who made more than $1.5 million in profits from his privileged access to Iraqi oil contracts, according to an investigative report released yesterday.

The trader, Fakhry Abdelnour, who is based in Geneva, also paid an illegal surcharge of $160,000 to the Iraqis, in violation of the United Nations sanctions against Iraq, while he and Mr. Sevan were lobbying for more business, said the report, which was issued by a United Nations-appointed panel headed by Paul A. Volcker.

In securing the oil contracts for Mr. Abdelnour, Mr. Sevan introduced him into one of the byways of the giant program, one that enriched a small group of traders while pouring money that was meant to buy food and medicine into secret Iraqi slush funds, it said.

Through the intercession of Mr. Sevan, the report said, Mr. Abdelnour was put on a list of individuals who received coupons, or allocations, that gave him the right to buy millions of barrels of Iraqi crude oil, starting in 1998.

The allocations were of little use to people who were not in the oil business and did not have the means, or desire, to lease tankers to ship the oil to refineries and other users. But they were valuable to Mr. Abdelnour, as the profits on his dealings with Iraq demonstrated.

Oil companies were hungry for Iraqi crude oil, especially in the early years of the oil-for-food program when prices for Iraqi oil were below world market prices. But Iraq did not sell oil to just anyone.

Under the guidance of Taha Yassin Ramadan, an Iraqi vice president, and the Revolutionary Command Council, headed by Mr. Hussein, a large portion of the oil allocations were handed out to a select group that included businessmen, politicians, journalists and diplomats who were perceived to be sympathetic to Iraq. According to traders and Iraqi officials, many people who received allocations sold them to an oil company at a premium.

Mr. Abdelnour did the same, the report said, selling his first allocation of 1.8 million barrels in the fall of 1998 to two oil companies for a $300,000 profit and selling another 5.5 million barrels for a $1.2 million profit over the next three years.

His company stopped buying oil in late 2000, the report added, after Iraq started demanding that oil buyers pay under-the-table surcharges on each barrel of oil they received. Many other traders in Mr. Abdelnour's situation have said they also pulled out around the same time because paying the surcharges meant that they could not make as much profit from selling their allocations as they previously had done.

By telling senior Iraqi officials like Mr. Ramadan that he wanted to "help a friend" get into the business of buying their oil, Mr. Sevan, played an important role, the investigators said.

"At that time in the program, it was highly unlikely that Iraq would sell oil to a company such as AMEP unless sponsored by a beneficiary that Iraqi officials wished to favor," the report said, referring to Mr. Abdelnour's oil-trading company, African Middle East Petroleum.

Senior Iraqi officials, the report added, were pleased with the chance to do Mr. Sevan a favor.

"He was a man of influence," the former Iraqi oil minister, Amir Muhammed Rashid, told investigators, and the government hoped, in vain as it turned out, that he had the power to speed up United Nations approval for Iraq to acquire spare parts for its oil industry.

-Rudey

[Rudey]

The New York Times

http://www.nytimes.com/2005/02/04/international/04food.html?hp&ex=1107579600&en=ebf0c386611be17d&ei=5094&partner=homepage

Inquiry on Food-for-Oil Plan Cites U.N. Diplomat for Conflict
By JUDITH MILLER and WARREN HOGE

Published: February 4, 2005


An interim report by a commission investigating the United Nations oil-for-food program in Iraq said the former head of the program had violated the United Nations Charter by helping a company owned by a friend to obtain valuable contracts to sell Iraqi oil.

The conduct of Benon V. Sevan, a Cypriot official who ran the program from 1997 until its demise in 2003, was a "grave and continuing conflict of interest" and had "seriously undermined the integrity of the United Nations," the report concludes.

The 219-page report, issued yesterday by the Independent Inquiry Committee, the United Nations-appointed panel headed by Paul A. Volcker, the former Federal Reserve chairman, depicts what was the United Nations' largest relief effort as riddled with political favoritism and mismanagement.

The $64 billion program, under which Iraqi oil revenues were used to buy relief goods for Iraqis, is also being investigated by five Congressional committees and a federal prosecutor in New York.

The report also says officials violated United Nations competitive bidding rules in hiring contractors for the program. It says important parts of the program were not audited, allowing evidence that Saddam Hussein was demanding and receiving kickbacks from companies selling his oil to go undetected.

A senior United Nations official announced yesterday that Secretary General Kofi Annan would try to discipline Mr. Sevan, who retired last year, and another senior official, Joseph Stephanides, who oversaw the selection of the program's major contractors.

The report does not say that Mr. Sevan, or other officials it criticizes, benefited personally from their actions.

But it discloses that Mr. Sevan received $160,000 in cash between 1999 to 2003 from an aunt in Cyprus, a retired government photographer who has since died. Mr. Volcker did not tie that money to his efforts on behalf of his friend's company, but the report says that the aunt's way of life did not suggest that she was wealthy and that the panel was continuing to investigate "the full scope and extent of benefits received by Mr. Sevan."

It also discloses that the Swiss-based company that Mr. Sevan helped, Africa Middle East Petroleum, made a $1.5 million profit by selling the oil allocations that Mr. Sevan had repeatedly solicited on its behalf from senior Iraqi officials. The report accuses the company of paying an illegal surcharge of $160,088 to Iraq in 2001.

In a statement yesterday, Eric L. Lewis, a lawyer for Mr. Sevan, denied his client had acted improperly. He said Mr. Sevan had no interest in any oil company and had never "accepted anything from anyone." The statement said he had always acted "in the best interests" of the oil-for-food program and the United Nations.

Mr. Lewis accused the panel of trying to "scapegoat" Mr. Sevan for "mentioning a company to the Iraqis as part of his role in advancing the process of trading oil for food."

"Mr. Sevan never took a penny," Mr. Lewis said, accusing the commission of succumbing to "massive political pressure."

Describing Mr. Sevan as "proud" of his 40-year service to the United Nations in some of the world's most dangerous places, the statement said that Mr. Sevan had fully disclosed the income he had received from his aunt.

The report accuses Mr. Sevan of not having been "forthcoming" with the committee about his relationship with the oil company, AMEP, or its owner, Fakhry Abdelnour, a distant relative of Boutros Boutros-Ghali, the former United Nations secretary general, whom the report criticizes separately for his role in selecting the program's main banker.

Reached by telephone in Paris, Mr. Boutros-Ghali said he had done nothing improper, calling Mr. Volcker's investigators "ignorant" of the United Nations system and their allegations about his conduct "silly."

Mr. Volcker said yesterday that the panel was continuing to investigate Mr. Sevan and his connections to Mr. Abdelnour, his company and other friends and associates.

Efforts to locate Mr. Abdelnour for comment yesterday were not successful. A call placed to his office in Geneva was not answered yesterday evening.

Mr. Stephanides, who oversaw contractor selection, did not return messages left on his office phone Wednesday night and yesterday morning.

Mark Malloch Brown, Mr. Annan's new chief of staff, said Mr. Stephanides could pay a high price as a result of disciplinary action up to and including dismissal, but he acknowledged that there was little the United Nations could do about Mr. Sevan, since he had retired. He said Mr. Annan would immediately lift the diplomatic immunity of any United Nations official charged with criminal conduct.

Mr. Volcker said, "This is a painful episode for everyone in the U.N."

This interim report defers judgment on fundamental issues of responsibility for corruption in the oil-for-food program, saying its investigations are continuing. Mr. Volcker and the two other commissioners - Richard Goldstone, a South African judge, and Mark Pieth, a Swiss financial expert - specifically deferred comment, for example, on allegations that the secretary general had a conflict of interest because his son Kojo had worked for Cotecna Inspection, a Swiss-based company hired to inspect the aid bought by Iraq.

Mr. Annan, who became secretary general in 1997, has previously said he had no role in selecting contractors.

Mr. Volcker said he hoped to issue his final report this summer.

The interim report, however, criticizes the way in which United Nations officials selected all three of the program's major contractors: Banque Nationale de Paris, a French bank that the panel said was not even on the United Nations' initial "long list" of the most technically qualified banks for the program; Saybolt Eastern Hemisphere BV, a Dutch oil inspection company that Mr. Stephanides was said to have promoted; and Lloyd's Register Inspection Ltd. of Britain, which the report said was chosen partly to balance lucrative contracts geographically among member nations.

The panel's investigators found "convincing and uncontested evidence" that the selection process had been "tainted" by irregularities in the case of all three contractors. The report does not accuse the contractors of acting illegally.

Both the report and Mr. Volcker emphasized that the major source of Mr. Hussein's illicit money was not kickbacks from the oil-for-food program but the estimated $8 billion in illegal oil sales to Jordan, Turkey and Syria that occurred even before the program was created. Mr. Volcker said that those sales were known to Security Council members, including the United States, and that Washington had specifically waived American laws barring such sales.

The report reserves its harshest criticism for Mr. Sevan, whose contacts with Iraqi officials on behalf of Mr. Abdelnour and his company AMEP, it details. The report states that Mr. Sevan first asked senior Iraqi officials for an allocation of oil "to help a friend" who was from Egypt in mid-1998, soon after the Security Council permitted Iraq to use up to $300 million of oil revenues to purchase spare parts for renovations. It was "highly unlikely," the report notes, "that Iraq would sell oil to a company such as AMEP unless sponsored by a beneficiary that Iraqi officials wished to favor."

Citing several Iraqi documents, the report concludes that Iraqi officials gave the allocations to AMEP at Mr. Sevan's requests hoping that this would "ensure a good relationship with him" and would help them obtain Mr. Sevan's assistance in lifting holds on spare part sales that Security Council members had placed on them.

The former Iraqi oil minister, Muhammad Rashid, specifically told the panel's investigators that the Iraqi government had allocated oil to Mr. Sevan "because 'he was a man of influence,' " the report states.

After Mr. Sevan turned out not to be "as helpful as hoped," it continues, the allocations for AMEP were reduced. "Neither Mr. Sevan nor Mr. Abdelnour was pleased with the reduction in the oil allocation," the report says. Mr. Sevan spoke to Mr. Rashid about it at an OPEC conference in Vienna in March 1999.

In the next phase of the program, AMEP's allocation was restored within five days after Mr. Sevan traveled to Iraqi to meet with Mr. Rashid again in the summer of 1999 to "discuss an expansion of the oil spare parts program."

The report says Mr. Sevan "denies that he asked for oil allocations or recommended any company to Iraqi officials for purchasing oil."

"But these claims are contradicted by the firsthand accounts of Iraqi officials involved," as well as by Iraqi oil company documents that list both Mr. Sevan and AMEP as recipients, "often following occasions when Mr. Sevan met with Oil Minister Rashid," the report states.

The report says Mr. Abdelnour said Mr. Sevan did not assist him in obtaining the allocations from Iraq.

It says Mr. Sevan initially told investigators he had met Mr. Abdelnour only briefly at the OPEC Vienna conference in 1999. But in later interviews he "admitted that he had passed at least one inquiry from Mr. Abdelnour to the Iraqi oil minister."

The report says that after being confronted with United Nations telephone records showing calls between himself and Mr. Abdelnour, Mr. Sevan acknowledged that the two men had "developed an acquaintanceship" lasting "over several years." It quotes Mr. Sevan as telling investigators: "I came to like the guy. He is an interesting character you know, he's been around the world."

At the United Nations, Mr. Malloch Brown said the secretary general was shocked at the report's findings about Mr. Sevan in particular.

"The secretary general is shocked by what the report has to say about Mr. Sevan, terribly dismayed that a colleague of so many years' standing is accused of breaching the U.N. code of conduct and staff rules in the ways he did, and he very much doubts that there can be any extenuating circumstances for the behavior which appears proven in the report," Mr. Malloch Brown said.

The mood toward Mr. Sevan, a longtime friend and confidant of Mr. Annan's, appeared unforgiving.

Mr. Malloch Brown said: "Let me be clear that while Benon Sevan is a very dear friend of many of us - I've worked with him for years - when you put together three international investigators, $34 million worth of investigations, 65 investigators, you don't then set yourselves up as a court of appeal over the results of that investigation." Any further investigation, he said, would be in "a judicial process."

Reaction to the report from Congressional investigators was mostly supportive of Mr. Volcker's work.

Representative Henry J. Hyde, the Illinois Republican who is the chairman of the House International Relations Committee, said in a statement that the report painted a picture of "mismanagement, neglect and political manipulation that resulted in significant corruption of the oil-for-food program."

"I am reluctant to conclude that the U.N. is damaged beyond repair," he said, "but these revelations certainly point in this direction."

A similar, but even harsher reaction came from Senator Norm Coleman, a Minnesota Republican and chairman of the Senate Permanent Committee on Investigations, who called on Mr. Annan to lift Mr. Sevan's diplomatic immunity immediately. "The report shows that he repeatedly lied to investigators, has misled the inquiry about the source of $160,000 in cash deposits and unethically steered oil-for-food contracts to close associates and lied about those relationships to authorities," he said.

-Rudey

[PhiPsiRuss]

Originally posted by Rudey
The interim report, however, criticizes the way in which United Nations officials selected all three of the program's major contractors: Banque Nationale de Paris, a French bank that the panel said was not even on the United Nations' initial "long list" of the most technically qualified banks for the program...Why is this so not surprising?

[Rudey]

http://www.reuters.com/newsArticle.jhtml;jsessionid=ZWNPOPANPM05YCRBAEKSF EY?type=topNews&storyID=7543983

Iraq Wants Money Back; Annan Promises Action

Iraq Wants Money Back; Annan Promises Action
Fri Feb 4, 2005 02:17 PM ET


By Evelyn Leopold
UNITED NATIONS (Reuters) - Iraq said it wanted its money back from the scandal-tainted U.N. oil-for-food program Friday as Secretary-General Kofi Annan vowed to get to the bottom of wrongdoing by U.N. staff.

"Huge sums of money which should have served the needs of the Iraqi people who were suffering at that time -- a lot of these resources were squandered and misspent," said Iraq's U.N. ambassador, Samir Sumaidaie.

Iraq, he said, should at minimum not have to pay for the independent probe set up by the United Nations from remaining oil-for-food funds. The inquiry panel has spent $30 million so far, with the approval of the Security Council.

A key report by Paul Volcker, the former U.S. Federal Reserve chairman appointed by Annan to probe the $67 billion program, found that the director of the plan, Benon Sevan, helped steer oil contracts to a relative of former U.N. Secretary-General Boutros Boutros-Ghali.

The report does not accuse any U.N. officials of getting bribes. But it says Sevan received $160,000 from an aunt in Cyrus, who has since died and had few resources.

"We are as determined as everyone to get to the bottom of this. We do not want this shadow to hang over the U.N.," Annan said as he arrived at headquarters.

Annan said U.N. officials would be disciplined and that if criminal acts were committed, diplomatic immunity would be lifted. He said he was consulting with lawyers on how to do this, as Sevan, who has denied he received as much as a penny, has retired and is on $1 a year retainer

Among other questionable deals in the report was one in which another U.N. official, Joseph Stephanides, colluded with a former British U.N. ambassador so that Lloyd's Register Inspection Ltd. could get a lucrative contract.

The report showed that if the humanitarian program were audited more thoroughly, it might have uncovered the cheating by Saddam Hussein's government. Most of his skimming, which some estimates put as high as $8 billion, was earned by illegal oil sales outside the program, some of them permitted by the council.

DUBIOUS CHOICES

Investigators questioned Boutros-Ghali for choosing the Banque Nationale de Paris, now known as BNP-Paribas, to handle the program's account. He did so after council members asked him to select a bank but was criticized for asking Iraq its preference.

He was in office in 1996 when the program was negotiated and the Volcker report alleged that Stephanides interfered in the awarding of contracts.

But there are no allegations Boutros-Ghali deliberately undermined the program.

The program began in December 1996 and ended in November 2003, after the United States overthrew Saddam Hussein. Iraq was allowed to sell oil to buyers of its choosing and contract for food, medicine and other necessities to ease hardships caused by U.N. sanctions, imposed in mid-1990.

Volcker said his 240-page report was preliminary and that the final one would be produced in June. He said he may have another interim report to deal with the alleged role of Annan's son, who had worked in West Africa for Cotecna, another Swiss company that replaced Lloyd's in 1998 to inspect goods.

The Iraqi ambassador said the United Nations received $1.14 billion to administer the program and wanted to see how much actually reached its destination or was squandered by outside contractors working for the world body.

"The question arises whether the secretariat is subject to its own political culture, which tends to subvert the will of the Security Council," said Sumaidaie. "This is serious."

But he avoided blaming the Security Council, which had to approve contracts and whose key members were deadlocked in dealing with any improprieties on Iraq.

The U.S. Congress has initiated several investigations as has the U.S. Attorney's office.

Sen. Richard G. Lugar, the Republican chairman of the Foreign Relations Committee, said that "part of the blame for the current imbroglio lies with the U.N." but that one had to recognize that council members, including the United States "must also answer questions as to why they, too, did not pay greater scrutiny to this program."

But U.S. Rep. Henry Hyde, an Illinois Republican, said the Volcker report reinforced evidence of U.N. lapses in overseeing the program and "even the most rudimentary standards of accountability."

-Rudey

[Rudey]

I heard there are massive protests in Europe over their government's role in supporting a dictator who murdered and oppressed. These protestors decided to stop wishing for America to lose, for Iraq to be oppressed, and their countries to profit and now see the error in their ways. Has anyone else heard this?


http://www.nytimes.com/2005/10/27/international/middleeast/27food.html

October 27, 2005
U.N. to Detail Kickbacks Paid for Iraq's Oil
By WARREN HOGE
UNITED NATIONS, Oct. 26 - More than 4,500 companies took part in the United Nations oil-for-food program and more than half of them paid illegal surcharges and kickbacks to Saddam Hussein, according to the independent committee investigating the program.

The country with the most companies involved in the program was Russia, followed by France, the committee says in a report to be released Thursday. The inquiry was led by Paul A. Volcker, former chairman of the Federal Reserve Board.

The findings are in the committee's fifth and final report, a document of more than 500 pages that will detail how outside companies from more than 60 countries were able to evade United Nations controls and make money for themselves as well as for the Hussein government.

Three investigators who described their findings in interviews declined to name the companies, though they said the companies would be identified in the document on Thursday. They refused to speak on the record about the report until it is released.

The new report studies the people outside Iraq who profited illicitly and how they did it. It will identify companies and individuals who took part, both deliberately and inadvertently, and will chronicle in detail the experience of 30 to 40 of them, the investigators said.

In an interview, Mr. Volcker said that while he knew the naming of companies and the exposure of international "machinations" would draw attention, he hoped it would not obscure his committee's purpose in keeping the focus of their work on the need for United Nations reform.

"In my mind," he said, "this part of our investigation, looking at the manipulation of the program outside the U.N., strongly reinforces the case that the U.N. itself carries a large part of this responsibility and needs reform.

"Even though we are looking at it from the outside, it kind of screams out at you, 'Why didn't somebody blow a whistle?' The central point is that it all adds up to the same story. You need some pretty thoroughgoing reforms at the U.N."

Those manipulating the program ranged from established trading companies to front companies set up for the purpose, and included some companies of international reputation as well as many well known in their home countries, the investigators said.

Mr. Hussein received $1.8 billion in illicit income from surcharges and kickbacks on the sales of oil and humanitarian goods during 1996-2003, when the program ran, the committee concluded in its last report in September.

Earlier Volcker committee reports summarizing the year and a half of inquiries have examined the activities of the United Nations, finding the institution's management inept and corrupt, and providing evidence that the program's former director, Benon V. Sevan, received kickbacks himself. He has denied any wrongdoing.

The $64 billion program was set up by the Security Council to help ease the effects of United Nations sanctions on the 27 million Iraqis by supplying food and medicines in exchange for letting the Hussein government export oil.

The investigators said Thursday's report would detail how Mr. Hussein first steered the program to gain political advantage with political allies and countries in a position to ease the United Nations sanctions. Both Russia and France are veto-bearing members of the Security Council.

"Then it got corrupted with a capital C when Saddam figured out how to make money off of it by putting on the surcharges and kickbacks," one investigator said.

At first, he said, companies balked at paying the extra fees, and the oil sales slowed. At that point, "less orthodox companies" came forward and accepted the terms, opening the way for the program's full scale exploitation and allowing legitimate companies to buy oil from illegitimate ones.

Another investigator noted that in the years immediately preceding the program, smuggling of Iraqi oil in much larger amounts had been going on for years to the benefit of the economies of American allies, including Jordan and Turkey. In his last report, Mr. Volcker said this smuggling amounted to $10.99 billion.

This investigator suggested that this had a compromising effect on the Security Council's willingness to step in and stop the practice. "Three years, four years already, letting the oil flow into Jordan and Turkey, so now you're going to be very strict about this smaller volume of oil?" he asked. "Unlikely."

All the companies named have been notified, and many have replied, with some of their responses reflected in the final report, an investigator said.

"The responses range from absolute denial to complete admittance," he said. "Some said, 'We had no knowledge of it' - that's a pretty standard response - and some said, 'If we paid it, we don't know we paid it.' "

Mr. Volcker has noted in the past that his committee is not a law-enforcement body, and expects the information it gathers to be turned over to national prosecutors. The committee is expected to close down at the end of November, and investigators declined to discuss whether it might extend its life beyond then.

The committee said some companies had complained that the evidence against them was gathered in Iraq and was therefore not trustworthy. But a lead investigator said that in those cases where corroborating evidence was available, the Iraqi information turned out to be sound.

"Everybody down the line kept very meticulous records because Saddam told them, 'You get the surcharge from everybody,' " he said. "So they all wanted to document how they got the surcharge."

-Rudey