Investigation Blasts U.N. Oil-For-Food Program

UNITED NATIONS (Sept. 6) - A year-long investigation of the U.N. oil-for-food program in Iraq concluded that the $64 billion humanitarian operation was corrupt and inefficient, and a critical new report says urgent reform is needed at the United Nations.

A draft forward of the report, obtained by The Associated Press, said the largest, most ambitious humanitarian operation ever run by the United Nations was used by Saddam Hussein to his advantage. Neither the U.N. Secretariat nor the U.N. Security Council was clearly in command, which led to "an evasion of personal responsibility at all levels," it said.

The investigative committee, which is U.N.-appointed and supported, will also criticize U.N. Secretary-General Kofi Annan, his predecessor Boutros Boutros-Ghali and the U.N. Security Council, especially Russia and France, an official familiar with the report said Monday.

Annan's failure to properly manage the $64 billion program will be a central focus, but there is no new "smoking gun" linking him to an oil-for-food contract awarded to a Swiss company that employed his son Kojo, the official said, speaking on condition of anonymity because the report had not been released.

The Independent Inquiry Committee's final report, to be released Wednesday, will say the program succeeded in providing minimal standards of nutrition and health care for millions of Iraqis trying to cope with tough U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait. It also helped in the international effort to deprive Saddam of weapons of mass destruction, the committee said.

"Those were real accomplishments. They were achieved despite uncertain, wavering direction from the Security Council, pressures from competing political forces in Iraq, and endemic corruption on the ground," said the draft forward. "Sadly, those successes fell under an increasingly dark shadow."

The final report is expected to detail the inner workings of oil-for-food over more than 700 pages. Volcker's 1,800-word forward speaks more broadly, focusing on administrative failures and specific reforms the world body must adopt.

It assigns blame to nearly every branch of the United Nations, from Annan, to the U.N. agencies that did work in Iraq, to its member states and the 15-nation Security Council.

"As the years passed, reports spread of waste, inefficiency, and corruption even within the U.N. itself," inquiry chief Paul Volcker, former chairman of the U.S. Federal Reserve, wrote in the draft forward. "Some was rumor and exaggeration, but much - too much - of it has turned out to be true."

While the forward is critical of U.N. management, and by extension Annan, its overall tone toward him is not entirely critical. Volcker wrote that no secretary-general is chosen for management skills and has the tools for strong executive oversight.

Yet the official with knowledge of the committee's final conclusions said its final analysis will probably leave a cloud over Annan because of unanswered questions about an e-mail suggesting he knew more than he said about his son's involvement in the Cotecna bid. The secretary-general denies any knowledge of Cotecna's bid.

The author of the e-mail, Michael Wilson, a Cotecna executive who is a friend of Kofi and Kojo Annan, denies ever talking to the secretary-general about the firm's attempt to win a U.N. contract.

The new report will criticize Kojo Annan for trading on his father's name in the purchase of a Mercedes, for which he borrowed money from Wilson, the official said.

In an interview Monday with the British Broadcasting Corp., the secretary-general said he was braced for criticism in the new report.

"I suspect there will be lots of criticism," Annan said.

The oil-for-food program, which ran from 1996 to 2003, let the Iraqi government sell limited - and eventually unlimited - amounts of oil primarily to buy humanitarian goods. But Saddam chose the buyers of Iraqi oil and the sellers of humanitarian goods.

In a bid to curry favor and end sanctions, Saddam allegedly gave former government officials, activists, journalists and U.N. officials vouchers for oil to be resold at a profit.

The official said Russia and France, whose companies had major oil-for-food contracts and for years were considered friendly to Iraq, will come in for criticism. As veto-wielding permanent members of the Security Council, both countries had major influence on what the committee monitoring sanctions did and didn't do.

Wednesday's report will be the committee's major assessment of oil-for-food, though another report on the companies involved will be issued in October.

Volcker's team has already documented how the program's former chief, Benon Sevan, allegedly took $160,000 in kickbacks while a Russian U.N. official solicited a bribe.

The investigators reported last month that they had uncovered enough evidence to prosecute two of Sevan's friends who are related to Boutros-Ghali and are suspected of helping the ex-director in a kickback scheme. The official said Boutros-Ghali will be criticized in the new report in connection with the alleged scheme.

Mike Holtzman, spokesman for the committee, refused to comment on the report.

But he said "what we don't want to have lost in all of this is that we're offering concrete recommendations on how to fix the United Nations so that it can conduct large-scale humanitarian operations in the future."

Annan has no interest in a repeat.

"Honestly, I wish we had never been given that program, and I wish the U.N. will never be asked to undertake that kind of a program again," he told the BBC

Russia and France were dirty???? O.M.G. I can barely remember hearing something like this before......now where could that have been??? :D

a couple of Russians have already been arrested.

thank god we have Bolten there.