http://www.reuters.com/newsArticle.j...toryID=7543983
Iraq Wants Money Back; Annan Promises Action
Iraq Wants Money Back; Annan Promises Action
Fri Feb 4, 2005 02:17 PM ET
By Evelyn Leopold
UNITED NATIONS (Reuters) - Iraq said it wanted its money back from the scandal-tainted U.N. oil-for-food program Friday as Secretary-General Kofi Annan vowed to get to the bottom of wrongdoing by U.N. staff.
"Huge sums of money which should have served the needs of the Iraqi people who were suffering at that time -- a lot of these resources were squandered and misspent," said Iraq's U.N. ambassador, Samir Sumaidaie.
Iraq, he said, should at minimum not have to pay for the independent probe set up by the United Nations from remaining oil-for-food funds. The inquiry panel has spent $30 million so far, with the approval of the Security Council.
A key report by Paul Volcker, the former U.S. Federal Reserve chairman appointed by Annan to probe the $67 billion program, found that the director of the plan, Benon Sevan, helped steer oil contracts to a relative of former U.N. Secretary-General Boutros Boutros-Ghali.
The report does not accuse any U.N. officials of getting bribes. But it says Sevan received $160,000 from an aunt in Cyrus, who has since died and had few resources.
"We are as determined as everyone to get to the bottom of this. We do not want this shadow to hang over the U.N.," Annan said as he arrived at headquarters.
Annan said U.N. officials would be disciplined and that if criminal acts were committed, diplomatic immunity would be lifted. He said he was consulting with lawyers on how to do this, as Sevan, who has denied he received as much as a penny, has retired and is on $1 a year retainer
Among other questionable deals in the report was one in which another U.N. official, Joseph Stephanides, colluded with a former British U.N. ambassador so that Lloyd's Register Inspection Ltd. could get a lucrative contract.
The report showed that if the humanitarian program were audited more thoroughly, it might have uncovered the cheating by Saddam Hussein's government. Most of his skimming, which some estimates put as high as $8 billion, was earned by illegal oil sales outside the program, some of them permitted by the council.
DUBIOUS CHOICES
Investigators questioned Boutros-Ghali for choosing the Banque Nationale de Paris, now known as BNP-Paribas, to handle the program's account. He did so after council members asked him to select a bank but was criticized for asking Iraq its preference.
He was in office in 1996 when the program was negotiated and the Volcker report alleged that Stephanides interfered in the awarding of contracts.
But there are no allegations Boutros-Ghali deliberately undermined the program.
The program began in December 1996 and ended in November 2003, after the United States overthrew Saddam Hussein. Iraq was allowed to sell oil to buyers of its choosing and contract for food, medicine and other necessities to ease hardships caused by U.N. sanctions, imposed in mid-1990.
Volcker said his 240-page report was preliminary and that the final one would be produced in June. He said he may have another interim report to deal with the alleged role of Annan's son, who had worked in West Africa for Cotecna, another Swiss company that replaced Lloyd's in 1998 to inspect goods.
The Iraqi ambassador said the United Nations received $1.14 billion to administer the program and wanted to see how much actually reached its destination or was squandered by outside contractors working for the world body.
"The question arises whether the secretariat is subject to its own political culture, which tends to subvert the will of the Security Council," said Sumaidaie. "This is serious."
But he avoided blaming the Security Council, which had to approve contracts and whose key members were deadlocked in dealing with any improprieties on Iraq.
The U.S. Congress has initiated several investigations as has the U.S. Attorney's office.
Sen. Richard G. Lugar, the Republican chairman of the Foreign Relations Committee, said that "part of the blame for the current imbroglio lies with the U.N." but that one had to recognize that council members, including the United States "must also answer questions as to why they, too, did not pay greater scrutiny to this program."
But U.S. Rep. Henry Hyde, an Illinois Republican, said the Volcker report reinforced evidence of U.N. lapses in overseeing the program and "even the most rudimentary standards of accountability."
-Rudey