The Scotsman, UK
Feb 6 2005
UN plays blame game in Iraqi oil scandal
ARTHUR MACMILLAN
NOT for the first time Kofi Annan’s face betrays the look of a
worried man. The secretary general of the United Nations is used to
international scrutiny, but the commission investigating the
oil-for-food programme in Iraq has uncovered a scandal that could
engulf him and fatally damage the institution he leads.
The interim report into oil-for-food payments found persuasive
evidence that Benon Sevan, the director of the programme, used his
influence with Iraq to benefit from the scheme.
Now the blame game is underway and the former UN secretary general
Boutros Boutros-Ghali, who was in charge of the organisation when the
programme began, yesterday moved to defend his position.
He went on the offensive in a series of interviews for the world’s
media and told the BBC: “I share the responsibility, but don’t twist
the whole operation. The basis [of the programme] was decided by the
Security Council, approved by the Security Council, the execution was
done during the mandate of my successor.”
The oil-for-food programme was intended to be a lifeline for Iraq’s
26m population under the Saddam regime. But the report by Paul
Volcker, the former US Federal Reserve chairman appointed by Annan to
investigate the $67bn scheme, which ran from 1996 until 2003, has
found that Sevan used his influence to help a small company gain
profitable rights to sell Iraqi oil.
He did so while urging the UN to provide greater help in rebuilding
Iraq’s oil equipment. Sevan claims he is being made a scapegoat but
the apparent conflict of interest raises the clear possibility that
he took bribes from Saddam Hussein’s regime.
It also questions Annan’s leadership of the UN amid pressure from US
conservatives who have already demanded his resignation over the
corruption allegations and wider criticism of the UN’s role in the
world.
At best Annan was asleep at the switch, but the full investigation
may have more severe implications for him.
Volcker’s interim report also found that Sevan helped steer oil
contracts to a relative of Boutros-Ghali, who headed the UN from
January 1992 until Annan took over in 1997. The report does not
accuse any UN officials of receiving bribes, but Annan has said UN
officials would be disciplined and diplomatic immunity lifted if
criminal acts were committed.
The interim report showed that the programme, which was designed to
allow Iraq to buy food and medicines to ease hardships caused by UN
sanctions, suffered from lax UN controls. Following the overthrow of
Saddam, however, documents emerged showing that the former Iraqi
leader was skimming funds from the scheme, selling oil illegally
outside the programme – often with the knowledge of Security Council
members – and bribing a variety of officials around the world.
A CIA investigation last September found Saddam earned $1.7bn through
kickbacks and illegal surcharges and took $8bn from illegal oil sales
to other countries, all of which went to propping up the dictator’s
regime.
Boutros-Ghali insisted yesterday that the programme was a success: “I
regret the mismanagement and the scandal which appear now with the
Volcker report. I consider that the fact that we have been able to
sign the memorandum of understanding, to obtain the agreement of the
Security Council and to obtain the agreement of the Iraqi
administration, that this was a success for the poor people of Iraq
who were suffering 10 years of economic sanctions.”
Meanwhile, Iraq has called for a widening of the investigation of the
oil-for-food programme, demanding the immediate return of money in
the UN account that paid the humanitarian relief effort’s
administration costs.
Iraq’s UN Ambassador Samir Sumaidaie also reiterated his government’s
demand that the UN stop using oil-for-food money to pay for the
Volcker’s investigation. He said: “It is outrageous that Iraqi funds
were mismanaged and then we have to pay for finding out about the
mismanagement.”
In his book Unvanquished: A US-UN Saga, Boutros-Ghali describes the
trouble he had getting Iraq to commit to the oil-for-food programme.
He was also under enormous pressure late in his tenure, having
learned around the time he was trying to put oil-for-food together
that the United States would block his nomination for a second term
as secretary general. Instead, the United States supported Annan.
The most damaging allegation in Volcker’s report alleges that Sevan,
an Armenian Cypriot, asked senior Iraqi officials to grant oil
allocations to Africa Middle East Petroleum, a company owned by
Fakhry Abdelnour, a cousin of Boutros-Ghali.
But it is Annan who must pick up the pieces. He is already facing a
report on the role of his son, Kojo, who worked for a contractor in
the oil-for-food programme. President George W Bush has been
noticeably reluctant to back Annan who failed to support America’s
invasion of Iraq. Washington has made no secret of its anger at Annan
since he described the conflict as illegal last year.
Mark Malloch Brown, Annan’s chief of staff, said: “The secretary
general is shocked by what the report has to say about Mr Sevan.”
But with the UN diplomats who profited from the discredited programme
being labelled parasites by Iraqi human rights lawyers in a nation
taking the first steps to democracy, and another report from Volcker
to follow, the story is far from over. This time it will be Annan’s
credibility that is at stake.