U.S. A Key Player In Oil-For-Food Scandal, Ex-UN Aide Says

by Thalif Deen

(IPS) UNITED NATIONS -- The United States, which has accused the United Nations of condoning bribery and corruption in the now defunct oil-for-food program in Iraq, has not itself been ethical, says a former senior UN official who once headed the humanitarian project in Baghdad.

"Every contract, kickback and every (barrel of oil) smuggled into Turkey, Syria and Jordan, and even into Iran, was well known to and closely monitored by U.S. satellites," says former Assistant Secretary-General Denis Halliday, the UN humanitarian coordinator for Iraq in 1997-1998.

Besides, he added, Kurdish leader Massoud Barzani, who was a U.S. and U.K. ally, made millions of dollars from illegal shipments of oil and gas into Turkey, together with the supplier in Baghdad -- former Iraqi President Saddam Hussein's son, Udhay Hussein.

"U.S. oil companies, which indirectly bought some 40 percent of Iraqi oil through the oil-for-food program, paid the kickbacks indirectly," Halliday told IPS.

The scandal thus resides not with UN Secretary-General Kofi Annan or the UN secretariat, he added, but with the UN member states that created and oversaw the "deadly sanctions" against Iraq.

For several months now, the United Nations has been facing widespread charges of bribery and corruption in the oil-for-food program it administered in Iraq from 1996 to 2003.

The sustained attacks against the world body have come both from U.S. politicians and conservative newspapers, which have also accused Annan of a "cover-up."

"The constant campaign has hurt the United Nations," Annan told reporters two weeks ago. "This is not something we would like. And that's why we want to get to the bottom of it and clear it as quickly as possible."

In an attempt to clear the air, the secretary-general hired Paul Volcker, a former chairman of the U.S. Federal Reserve System, to probe the allegations.

Volcker heads a three-member Independent Inquiry Committee, which includes Richard Goldstone and Mark Pieth, and was commissioned by the UN Security Council.

But a U.S. Senate sub-committee, which has set up a parallel probe, has accused Annan of blocking access both to UN officials and to internal audit reports.

On Monday, the sub-committee said Saddam's government made at least $21.3 billion illegally, about twice the previous estimate, through the program. UN officials were accused of conniving with the Iraqi president or of ignoring the illegal activities.

Addressing the subcommittee, Charles Duelfer, the U.S. arms investigator in Iraq, singled out a former UN official, Benon Sevan, as a recipient of some 13 million barrels of oil from the Iraqi president. Sevan has denied the charges.

The program was meant to ease UN economic sanctions against Iraq by permitting the sale of oil in return for the purchase of essential food and drugs for 26 million Iraqis who were bearing the brunt of the embargo.

"I believe the secretary-general should open the reports, files and any other information sources to the public," says Halliday.

He added that Annan "should offer access to his staff and former staff such as (Hans) Von Sponeck (also a former UN humanitarian coordinator) and myself to meet with those (investigators) in Washington."

"I say this because the bottom line of this 'scandal' is the member states themselves ... their abuse of the UN Charter, their use of (economic) sanctions to the point of genocide, their misuse of Iraqi oil monies (about 30 percent were diverted as compensation to Kuwait while Iraqi kids were dying from bad water and poor food), the endless bombing over the years and the final bombing prior to the illegal invasion by (U.S. President George W) Bush and (British Prime Minister Tony) Blair."

"Those are the real scandals. That is where the criminals -- as in 'war criminals' -- lie," Halliday added.

In a report to Congress in October, Duelfer said Hussein had established a worldwide network of companies and countries, most of them U.S. allies, which secretly helped Iraq generate about $11 billion in illegal income from oil sales under the oil-for-food program.

The report named officials or companies from Belarus, China, Lebanon, France, Indonesia, Jordan, Poland, Russia, Turkey, Syria, the United Arab Emirates and Yemen.

Merrill Cassell, a former budget director at the UN Children's Fund (UNICEF) agrees with the argument that the United Nations should opt for transparency.

"The scandals of the oil-for-food program worsen the reputation of the United Nations, especially when the media are accusing the United Nations of blocking a U.S.-led investigation," he told IPS.

"And, for any investigation, there should be clear transparency leaving no room whatsoever of an administrative blockade."

Phyllis Bennis of the Washington-based Institute for Policy Studies says, "in principle everything the United Nations does should be absolutely transparent."

The world body is not the CIA nor (the British intelligence agency) MI-6 -- it should not have secret files. "So yes, the documents of the oil-for-food program should be made public," Bennis told IPS.

However, the U.S. congressional demand is not for public access to all UN documents; it is for privileged, special access not available to any other government or non-governmental actors. "And that is unacceptable," added Bennis, author of 'Calling the Shots: How Washington Dominates Today's UN'

"If the relevant UN documents -- all of them -- were made fully public and available, what we would learn is that it was the most powerful member states of the UN Security Council, most importantly the United States and Britain, that were primarily responsible for the kickbacks and smuggling that characterized the oil-for-food contracting process from the beginning," she said.

The power to approve contracts for Iraq to sell its oil or purchase humanitarian supplies rested with the UN's 661 committee, made up of all members of the Security Council, not with the UN Secretariat.

Bennis pointed out that both the United States and Britain routinely used their power on that committee to delay or cancel contracts, often for medical or pharmacutical goods, on the rarely substantiated claim of "dual use," meaning the products had potential military as well as civilian use.

"There is not a single report of an American or British representative putting a hold on a contract because of the widely known (and typical of the global oil industry) practice of kickbacks," she added.

U.S. oil firms bought Iraqi oil throughout the years of U.S.-orchestrated sanctions; there is little likelihood such sales would have continued if those U.S. petro-giants were the only ones refusing to participate in the kickback schemes, according to Bennis.

"If the reports were made public, we would also see the evidence that the large-scale sale of Iraqi oil to Turkey in particular, as well as Jordan and other countries, outside the oil-for-food program, was public knowledge among Security Council member countries."

It was widely understood, for example, that Turkey's decision to allow the U.S. Air Force to use Incirlik as a base to patrol the illegal non-UN "no-fly zones" that U.S. and British officials established in northern and southern Iraq was based partly on Washington's acquiescence in Iraq's off-the-books sale of cheap oil to Turkey, she added.

In a statement released Tuesday, Volcker, whose report is expected in mid-2005, pointed out the United Nations is an international body with responsibility for the most sensitive matters of global security.

"As such, it must balance the desirability for transparency and disclosure with its responsibilities to all member states and the need to maintain confidentiality in its internal deliberations."

"In general," Volcker added, "the United Nations does not make such internal confidential information (or similar information from its contractors) available to a particular member state, or in response to investigations by a particular member state."

He said the request from the Senate sub-committee and from other interested investigative bodies in the United States and elsewhere "needs to be considered in that light."