UNITED NATIONS, 9 September 2005 — A yearlong investigation of the UN oil-for-food program issued a strong indictment of the United Nations and its top leadership Wednesday, concluding they tolerated corruption and allowed Saddam Hussein’s government to pocket $10.2 billion.
Secretary-General Kofi Annan called the findings “deeply embarrassing to all of us” and said he accepted the criticism leveled at him personally. But he said he had no intention of resigning.
Instead, Annan urged world leaders at next week’s UN summit to use the “golden opportunity” to adopt UN reforms the Independent Inquiry Committee said were imperative for the world body to regain its respect and credibility.
The 191 UN member states negotiating a final document for the leaders to adopt are deeply divided on the proposals to overhaul UN management, and Annan warned of the “grave danger that the opportunity will be missed.”
The committee’s five-volume, 1,036-page report concludes that those responsible for managing the $64 billion oil-for-food program — both UN member states and the world body’s staff — failed the ideals of the United Nations and ignored clear evidence of corruption and waste.
Presenting the report at a meeting of the UN Security Council, former US Federal Reserve chairman Paul Volcker, who chaired the committee, said: “Our assignment has been to look for mis— or mal-administration in the oil-for-food program and for evidence of corruption within the UN organization and by contractors. Unhappily we found both.”
“In essence, the responsibility for the failures must be broadly shared, starting, we believe, with member states and the Security Council itself,” he said.
The powerful 15-member council came in for stinging criticism because its main oil-for-food committee often ignored evidence of corruption, while some council members condoned oil smuggling to Iraq’s neighbors.
The report notes that Russia was one of the nations that long blocked efforts to probe the claims. Russian companies were heavily involved in oil-for-food and the country was a leading proponent of lifting the UN sanctions.
The United States and other members of the council allowed oil shipments to Jordan and Turkey because those two countries were desperate after the Iraq sanctions blocked access to their largest trading partner and interrupted oil supplies.
The report criticized the almost total lack of oversight of the program by the secretary-general and Deputy Secretary-General Louise Frechette, who was the direct boss of Benon Sevan, the program’s executive director now being investigated for allegedly accepting kickbacks. It issued “adverse findings” against all three.
One of the largest humanitarian programs in history, oil-for-food was established to help ordinary Iraqis cope with UN sanctions imposed after Saddam’s 1990 invasion of Kuwait — and it was a lifeline for 90 percent of the country’s population of 26 million.
The smuggling of Iraqi oil outside the oil-for-food program in violation of UN sanctions poured much more money — $8.4 billion — into Saddam’s coffers during the same period, it said.
Saddam also violated UN sanctions before the oil-for-food program started, illegally selling oil to Jordan, with the acquiescence of the United States and other Security Council members, and pocketing an additional $2.6 billion, the report said.
“This estimate of illicit incomes — $12.8 billion — sets out in quantitative terms the consequences of the United Nations’ failure to properly oversee the program and maintain the integrity of the sanctions regime,” the committee said.
While the report focused primarily on management, it again addressed the most damaging allegations against Annan and reaffirmed previous findings of insufficient evidence that he knew about an oil-for-food contract awarded to a company which employed his son, Kojo.
Neither was there any evidence to demonstration that he interfered in the contract won by the Swiss company, Cotecna.
It reiterated that Annan did not sufficiently investigate conflicts of interest involving his son.
Investigators said additional evidence supplied by Kojo Annan established that he assisted Cotecna in its effort to win the contract, contrary to earlier denials. But the report said it appears Cotecna won the contract because it was the low bidder. “It is not known whether Kojo Annan’s efforts made a difference,” it said.
Kojo Annan said in a statement issued by his London lawyers that he never attempted to influence the awarding of the contract.
The committee said he used his father’s “name and position” in 1998 to buy and deliver a car at a reduced price. It said he asked beforehand whether he could buy the car in his father’s name, but there was no evidence to show the secretary-general ever agreed.
Kojo Annan called the car discount a youthful “indiscretion” that he regrets.
