Oil-for-Food: It Worked!

Oil-for-Food: It Worked!

Conservatives have undermined the credibility of the United Nations by exposing corruption in its oil-for-food program. But the inquiry led by Paul Volcker didn’t look at the mishandling of billions of dollars in oil-for-food surpluses given to US occupation forces or the alleged looting of such funds by US companies.


When he was elected to a second term as UN Secretary General in 2001, Kofi Annan appeared in the public eye with the combined halos of King and Gandhi. Then came the flood of half-baked slander over the alleged “oil-for-food scandal.” The inquiry into the oil-for-food program, headed by former Federal Reserve Chairman Paul Volcker, was the direct result of a conservative media storm accusing Annan of influencing the program in favor of his son and financing Saddam Hussein. In the febrile words of Charles Krauthammer, it was the “biggest financial scandal in the history of the world.”

A week before the UN’s sixtieth anniversary summit, the report issued by Volcker’s committee effectively cleared Annan and the UN of the vast majority of the corruption charges the media had been throwing at him. Unfortunately, the report mostly eschewed analysis, taking a “just the facts” approach that allowed UN-baiters to seize on the parts they wanted and ignore the rest.

By the time John Bolton turned up as the Grinch who tried to steal the summit, conservative efforts to erode the moral authority of the UN had been successful enough that Annan had lost most of the moral leverage needed to name and shame the spoilers. The situation would have been worse if the Katrina debacle had not undermined the usual rhetoric about UN mismanagement.

In contrast with the hurricane-response catastrophe, the oil-for-food program, the Volcker report found, had actually fulfilled its mandate by feeding the bulk of the Iraqi population and making possible the continuation of sanctions–thus preventing Saddam from acquiring weapons of mass destruction. Far from being a failure, by any rational standards oil-for-food was a success–so much so, in fact, that the United States asked the UN to maintain it six months into the occupation. (Citizens of the Gulf Coast might have welcomed the program’s expertise last month, too.)

The inquiry did identify $8 billion of revenue for Saddam–nothing to do with oil-for-food, though. These billions came from oil trades with US allies, condoned and in many cases facilitated by the United States. In fact, Volcker’s committee found that US officials were fine with Saddam profiting from these trades; they only became agitated when Syria and Iran began to take part. The sole finding of corruption directly tied to oil-for-food was that Benon Sevan, head of the $100 billion program, reported $147,000 in gifts over four years from a now deceased aunt in Cyprus; the committee suspected it was from oil-trade commissions from a company run by friends of Sevan.

The Volcker committee didn’t look into the more than $9 billion in oil-for-food surpluses given to US occupation authorities in Iraq. No accounting of these funds has been provided, either to Congress or to the UN monitoring board. Richard Goldstone, a former Yugoslav war crimes prosecutor who served on the committee, says, “The fate of the cash handed over to the Coalition Provisional Authority was not in the committee’s mandate” but adds that “the report largely rebutted the wild claims made in some of the media about corruption in the UN itself.”

We can be sure that Congressional committees mining oil-for-food for political advantage will also steer clear of CPA corruption. Expect to hear little about cases like that of Custer Battles, a security company set up by defense consultant Scott Custer and Fox News commentator Michael Battles that’s accused of looting the CPA of $50 million. The US courts have ruled that those responsible can be prosecuted only if they stole US money. If it came from the UN, they get off scot-free.

Far from needing more guidance from the United States, the UN needs to get Washington’s fingers out of its Secretariat administration. For decades US administrations have appointed presidential cronies as Under Secretary General for Management while excoriating the UN for “waste, mismanagement and corruption.” The latest such appointee, major Bush campaign contributor Christopher Burnham, served previously as Connecticut’s state treasurer. In that office, he awarded a contract to Columbus Circle Investors to manage $150 million in state pension funds. He resigned in 1997 to become CEO of the same firm and vice chair of its parent company, PIMCO Funds.

No one in his right mind would fall on his sword in defense of UN efficiency or incorruptibility. But to see the defenders of Enron, Halliburton and Michael Brown lead the attack on the world organization forces a defense. They indeed want to reform the UN–to death. By all means we should remove the motes from the UN’s eye, as long as we pull out the beams in its accusers’. Without DeLay, one could almost say.

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