Oil for Fraud?
 March 26, 2004 

IT'S WORTH RECALLING the historical circumstances under which the United Nations' "oil for food" program was set up in Iraq, back in 1997.  At the time, international concern was focused on the suffering experienced by the Iraqi people as a result of U.N.-mandated economic sanctions.  In response, U.N. officials said they would allow the Iraqi government to sell limited supplies of oil -- but only in order to import strictly necessary goods.  The oil-for-food program, which was organized, run and monitored by the United Nations, was intended to be a "temporary measure to provide for the humanitarian needs of the Iraqi people." 

Over time, the oil-for-food program in fact became a surrogate Iraqi trade ministry, as even a cursory look at the list of products Iraq imported under its auspices proves. "Humanitarian needs" -- a phrase that conjures up an image of beans, rice and emergency medicines -- came to include plumbing and sanitation for swimming pools, four-color offset printing machines, cigarette paper and photography lab supplies, according to the United Nations' Web site.  Clearly, those managing the program on behalf of the United Nations were not trying to limit imports to rice and beans, which is hardly surprising: On every barrel of oil sold -- about $40 billion worth -- the United Nations earned a 3 percent commission, divided as 0.8 percent going to the weapons inspection program and 2.2 percent to the program's administrative costs.  The fundamental problems with the program were public knowledge.  Far worse now are the mounting  allegations of behind-the-scenes corruption.  In recent congressional testimony, the General Accounting Office said it has evidence that the government of Saddam Hussein also profited from the program, through the imposition of "surcharges" on suppliers.  Several months ago, an Iraqi newspaper also claimed it had documents proving that oil money had found its way to others.  Among them, the newspaper alleged, were French and Russian politicians and parties; a pro-Hussein member of the British Parliament, George Galloway; the PLO; and, most damagingly, Benon Sevan, director of the oil-for-food program.  Finally, Cotecna, the company chosen by the United Nations to inspect goods being imported into Iraq, had not only been previously implicated in bribery scandals, it was also the former employer of Kojo Annan, the son of U.N. Secretary General Kofi Annan. 

Mr. Sevan has denied the charges, and Mr. Annan has denied any wrongdoing.  Nevertheless, the secretary general, who has openly called for the United Nations to play a larger role in postwar Iraq, had not attempted to investigate the press reports -- allegedly because Security Council members France and Russia were privately blocking him.  This week, Mr. Annan has let it be known that he would like to reverse course and launch an "independent" investigation.  According to spokesmen, he is scheduled to reveal some of its details today.

Mr. Annan owes it to the Iraqis to make this investigation real and thorough. If the United Nations cannot disprove its critics -- and punish wrongdoers, if any -- it will be harder to trust the organization to manage humanitarian and peacekeeping missions in the future.