Mister Pterodactyl
Tuesday, September 28, 2004

Haven’t heard much about UNSCAM lately, so I decided that I’d benefit from a little roundup. Here it is, and I’d like to express my gratitude to Ms. Claudia Rosett, who seems to have done all the legwork on this story. If she doesn’t get a Pulitzer, I’m calling my Congressman. [Actually, after reading all this stuff, I think I’ll call him anyway.]
So, thank you Ms. Rosett, and here we go…

The way the sanctions were set up, Saddam was the one who decided what to buy and from whom. He made the contracts with suppliers; the UN approved them and paid the money. “The result is that UN-approved aid goes to reinforce Saddam’s control over what is a Soviet-league state-run economy….which by rationing goods and controlling people’s livelihoods serves as a powerful tool for political control.” Therefore (for example), although 13% of the oil money was mandated for the Kurdish region, Saddam could simply refrain from using it, thus starving them of needed supplies.
Saddam also decided who would have the chance to purchase Iraqi oil and used that power, through sweetheart deals if not outright gifts, to make friends and influence people in the international community.

Even though UN staffers were (supposedly) examining and approving every deal, Saddam got away with quite a lot of funny business. He sold oil at below-market-value prices, then overpaid for the merchandise he bought, and got kickbacks from both ends. Merchandise delivered was sometimes shoddy, food and medicine out of date, and (oversight being what it was – see below) some deliveries may not even have matched the manifests. In addition note the oddity of receiving Japanese automobiles from Russia and Syria, powdered milk from desert-region Saudi Arabia, and (get this) detergent from Syria, Lebanon, Libya, Algeria, Yemen and Sudan.

The identities of the suppliers, the nature and quantity of purchased goods, and the amount of money spent were all kept secret. The total amount of money to go through the system was not, but there are some problems with the numbers that have been released. [Hint: they don't quite add up, and different officials have given different answers.] Also, the number of banks involved seems to be a mystery.
One more thing: [if you followed the above links you already know this] the Secretariat received 2.2% of the oil money for administrative costs and created thousands of new jobs for UN bureaucrats. As Ms. Rosett put it, they’re getting paid by Saddam to supervise Saddam. [That oil-for-jobs line was OK too.]

The UN Office of Internal Oversight Services produced over 50 audits of the program, none of which were made available to the Security Council or to member states. One has leaked, however.
Cotecna Inspections, which had the contract (starting in 1998) for authenticating the goods that came into Iraq, and which had Kofi Annan’s son Kojo on its payroll while it bid for Iraq contracts (this apparently didn’t raise any eyebrows), won its job with a low bid of $4.87 million. Four days later, “additional costs” were authorized, for $356K. And within a year of starting work the “per man day fee” went from $499 to $600, in breach of the contract. Furthermore UN oversight of the work was lacking; entry points were badly understaffed and the workers who were there did little inspecting, preferring to take manifests at face value (again contrary to their contract). Despite this, in 2003 Cotecna was awarded a new $9.79M contract to perform the same services for the CPA.

In March 2004, Kofi Annan finally agreed to have an independent group investigate the program. Shortly thereafter, letters were sent to Cotenca and to Saybolt International, which was responsible for overseeing Iraq’s oil exports. The letters reminded them of a clause in their contracts, stating that “all documentation connected with Oil-For-Food ‘shall be the property of the United Nations, shall be treated as confidential and shall be delivered only to the United Nations authorized officials on completion of work under this contract.’” The letter to Saybolt went farther, saying “any requests for information not already public should be relayed to the UN, including ‘the reason why it is being sought.’” and that “if UN internal audit reports are asked for, ‘we would not agree to their release.’” The letters were signed on behalf of (but not by) Benon Sevan, the program administrator. [Sevan's name has come up in relation to those "sweetheart deals if not outright gifts" I mentioned earlier.]
Annan’s office, when queried, said that this is standard procedure at the UN. Confidentiality is maintained in order to avoid offending the “sensibilities” of member states, and only the Secretary-General can authorize disclosure. [Apparently there's no problem with offending our sensibilities.]

Former Federal Reserve Chairman Paul Volcker was tapped to head up the investigation. Sadly his group is understaffed and underfunded (by the UN, natch) and he says he won’t be able to produce a report until spring at the earliest. Annan has seized this as an opportunity for more stonewalling, saying they don’t want to impede the investigation. Oh, and one of the terms of Volcker’s mandate is that his report be submitted to…Kofi Annan.
And this is the UN that gets more than a fifth of its budget from American taxpayers. Think about that.

Finally, Ms. Rosett suggests we connect the dots. “If, as the 9/11 Commission concludes, our ‘failure of imagination’ left America open to the attacks of September 11, then surely some imagination is called for in tackling one of the riddles that stumped the commission: Where exactly did Osama bin Laden get the funding to set up shop in Afghanistan, reach around the globe, and strike the United States?” If you follow one link in this whole post, that should be the one. Read this, too.

Since Ms. Rosett did all the work, she gets the last word.

“What's missing at the U.N. is not another survey by another consulting firm, or another 90-page report, or another investigation which serves chiefly to pre-empt criticism while fixing not much. The basic flaws are simple: Anytime you create a large institution, accord it great privileges of secrecy, give it a big budget, and have it run by someone immune from any sane standard of accountability, you are likely to get a corrupt organization. And unless the ground rules change, Mr. Annan's tactic of exhorting senior staff to be more accountable has about as much chance of success as Mikhail Gorbachev's efforts in the 1980s to fix the U.S.S.R. by telling Soviet citizens to stop drinking.
“The problem with the Secretariat isn't "tone" at the top. It's accountability at the top, and secrecy throughout. Perhaps a leader with the character of a Churchill or a Reagan would be willing to address that failing directly--and put his job on the line to push for change. Mr. Annan prefers to issue reports.
“Someone needs to help this institution, and it's not a consulting team hired by the same institution, nor is it a batch of investigators operating under terms defined by the U.N., nor is it a grand gathering of staff members being urged to risk reprisals by telling tales of earlier reprisals. A better place to start is the proposal by Sen. John Ensign that the U.S. withhold part of the U.N.'s budget until the institution comes clean on Oil for Food. Better yet would be to tackle the system that engendered Oil for Food. To do that would probably require setting up a competing international institution, based on openness and accountability--and give the U.N. a run for its money. For now, I'm working around to the belief that in the matter of reforming the U.N., the only thing worse than having the U.N. ignore a problem is to have the U.N. investigate it.”

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