A devil's brew at the U.N.
Sixty years ago, the signing of the United Nations charter in San Francisco was a beacon of hope to a world still laid low by the ravages of World War II. The U.N.'s agencies, like UNICEF, have done lots of noble work since then, and its blue-helmeted peacekeepers have been, and remain, essential guardians of humanity in areas of conflict.
Yet today the prestige of the U.N. is at a record low, mired in a monstrous scandal in which a vital humanitarian cause seems to have been perverted into a front for larceny on a dizzying scale. The U.N.'s oil-for-food program may turn out to be the largest financial scandal in history, involving a fraud of some $21 billion. Money aside, the alleged scandal is all the more nauseating because instead of providing relief for desperate Iraqis over the past decade, the U.N. appears to have become a conduit for kickbacks, graft, and smuggling on a grand scale. It is a diplomatic scandal of the first order because some Security Council members, notably France and Russia, seem to have abandoned principle and honor in pursuit of oil bribes. It is a personal scandal reaching to the under secretary general of the U.N., Benon Sevan, and, sadly, Kojo Annan, the son of the secretary general, Kofi Annan, holder of the Nobel Peace Prize. The whole stinking brew gives added resonance to the question of the U.S. ambassador to the U.N., John Danforth: "Why have this building? What is it all about?"
Shopping lists. The oil-for-food program was designed by the U.N. as a means of relieving the suffering of ordinary Iraqis as a result of the sanctions imposed on Saddam Hussein in the wake of the Persian Gulf War. The idea was that the Iraqi government would be allowed to sell a limited amount of oil, at fair market value, with the proceeds to be used to purchase food and other necessities. Kofi Annan had a direct hand in the initiation of the project as undersecretary general, when he led the first U.N. team to negotiate with Saddam over the terms of the program. (Remember Kofi Annan's comment about Saddam? "This is a man we can do business with.") When Annan became secretary general, he appointed Sevan, his colleague and close friend at the U.N. for 39 years, to head the program and report directly to him.
There was a glaring weakness in the original plan. It gave Saddam the right to negotiate contracts, choose his customers, draw up shopping lists, and write his own deals for relief supplies. Ultimately, over $100 billion of transactions occurred--but only $15 billion went for food and medicine. The terms also allowed the U.N. to collect, in effect, a 2 percent fee on every barrel of Iraqi oil sold, so that the more oil that was sold, the bigger the fees collected for Annan's U.N., which ultimately took in roughly $1.9 billion. Ironically, the money freed U.N. bureaucracies from seeking financing from member states and allowed them to remain essentially unaccountable. It was left to the U.N. to check the Iraqi contracts, keep the records, control the bank accounts, arrange for audits, and provide public reporting on the program. But with all that money rolling in, it appears, there was simply too much incentive for U.N. managers to look the other way while Saddam, as the intrepid journalist Claudia Rosett reported, "skimmed the money, bought influence, built palaces, and stashed away funds for other purposes" (including, perhaps, support of terrorism). The U.N.'s Iraqi employees, all handpicked by Saddam, used the program to set up a series of business deals to benefit Saddam's pals, including France, Russia, and Syria, with the hope that all that money would encourage them to support the end of sanctions. A veil of secrecy was flung over billions of dollars in contracts, creating a safe haven for every kind of corrupt practice. Saddam was able to stand the oil-for-food program on its head, pocket enough money, and blithely ignore the U.N. sanctions while he continued to rebuild his military--using money that should have gone to help his desperate countrymen.
advertisement
