Iraq Oil-For-Food Audit Finds No Widespread Abuse

by Haider Rizvi

(IPS) UNITED NATIONS -- After spending months combing through thousands of documents and questioning scores of officials, the investigators of alleged irregularities in the UN-led Oil-for-Food program in Iraq acknowledge that they have so far failed to find a smoking gun.

However, in an interim report released Thursday, they accused the world body of failing to abide by the rules to assure fairness, transparency and accountability.

"The findings do not make for pleasant reading," wrote Paul Volcker, chairman of the Independent Inquiry Committee, in the Wall Street Journal a day before releasing an interim report on the conduct of the Oil-for-Food program at a heavily attended news conference held outside the premises of the UN headquarters.

However, he added that the UN administration of the program appeared to be "free of systematic or widespread abuse."

The Oil-for-Food Program was initiated in 1996 to purchase and manage $46 billion worth of humanitarian assistance by selling Iraqi oil. At that time, Iraq was facing sanctions as a punishment for invading neighboring Kuwait and for trying to develop weapons of mass destruction.

The program provided essential food and medicines to 60 percent of Iraq's 27 million people. It was ended in May 2003 after the Security Council lifted the sanctions following the U.S. military occupation of Iraq.

Volcker, a former chairman of the U.S. Federal Reserve, sharply criticized a senior UN official who supervised the program in Iraq for several years before the first U.S. invasion of that country in 1993.

"Mr. Sevan placed himself in a grave and continuing conflict of interest situation that violated explicit UN rules," he said. "The evidence amply demonstrates that a tainted procurement process took place in 1996 when the program was just getting under way."

The Volcker report says that Benan Sevan, a Cyprian national who has worked for the United Nations for about 40 years, repeatedly asked Iraqis for allocations of oil to the African Middle East Petroleum Company. Sevan's behavior was "ethically improper," Volcker told reporters.

Sevan has repeatedly denied these charges and argues that he is being made a "scapegoat."

"He never took a penny," says Eric Lewis, Sevan's attorney. "In the current political climate, the IIC needs to find someone to blame. The IIC has turned its back on the due process. It has caved in to the pressure to those opposed to the mission of the UN."

At UN headquarters, some wondered why Volcker chose to write a column for the Wall Street Journal, explaining the findings of the committee's report a day before its actual release to the press as well as the Secretary-General. "We are surprised," said Fred Eckhard, Annan's chief spokesman.

For months, the Journal has been spearheading the media campaign against the UN regarding its conduct of the Oil-for-Food Program. Volcker has defended his actions by saying that he wanted it to be read by the public.

Many observers attribute the intense scrutiny of the program to a right-wing media campaign in the United States.

"Newspaper editors who play up the story are complicit in this ongoing virulent campaign against the UN by U.S. right-wing neo-conservatives," says Jim Paul, executive director of the U.S.-based Global Policy Forum.

A few hours after the release of the report, Republican Congressman Henry Hyde described Volcker's findings as "a matter of urgent concern," saying that he was "reluctant to conclude that the UN is damaged beyond repair, but these revelations certainly point to this direction."

Recently, a number of lawmakers in Washington demanded that UN officials suspected of involvement in the Oil-for-Food irregularities be handed over to U.S. investigators. One senator even went to the extent of demanding Annan's resignation. The U.S. Senate is conducting its own investigation into the program.

In response to Volcker's report, Annan issued a statement saying that he would take disciplinary action against Sevan and another official criticized in the report.

"Should any findings of the inquiry give rise to criminal charges, the United Nations will cooperate with national law enforcement authorities pursuing those charges," he said. "I will waive the diplomatic immunity of the staff member concerned."

Sevan, who has retired from active duty, is being kept on staff at a token salary to ensure his availability to the inquiry. He is currently residing in the United States on a diplomatic visa.

The Committee is scheduled to release its final report in June this year.