Inquiry Committee into the United Nations Oil-for-Food Program
(IIC), headed by Paul Volcker, is due to release its interim report
at the end of January. The
Volcker report undoubtedly has the potential to bring about
the downfall of U.N. Secretary-General Kofi Annan. The leadership
of the United Nations has placed so much political capital on its
findings that the stakes are extremely high. Damning words from the
former Federal Reserve Chairman regarding Mr. Annan's personal role
in the scandal would almost certainly seal the fate of the
embattled U.N. leader.
But those expecting a hard-hitting expose of
U.N. corruption and feckless leadership could well be disappointed
by Mr. Volcker's findings. As Volcker told The New York
Times, his report will produce no "smoking gun." While the IIC interim
report will probably contain valuable information of considerable
interest to congressional investigators, some of which may be
damaging to the U.N.'s reputation, it is unlikely to paint a
detailed picture of corruption and mismanagement at the highest
levels of the world body. Still, the flurry of interest that will
undoubtedly arise when the report is released, whatever its
contents, may well be overshadowed by new information indicating
that Mr. Volcker himself has an apparent conflict of interest that
threatens his credibility as head of the Committee.
appointed the Independent Inquiry Committee in April 2004 following
calls for a Security Council-backed inquiry into the Oil-for-Food
scandal. Paul Volcker heads a three-member committee consisting of
Volcker, South African Justice Richard Goldstone, and Mark Pieth, a
Swiss law professor. The Committee's 60 staff, including three
support personnel on loan from the U.N., operate on a $30 million
budget drawn from the U.N. Oil-for-Food escrow account.
Its interim report
will be published at an extremely sensitive time for the United
Nations. There is little doubt that the
scandal has done immense damage to the reputation of the world
organization. Kofi Annan is coming under increasing fire for what
has become the biggest scandal in United Nations history and the
biggest financial fraud of modern times.
Committee may fail to deliver an exhaustive account of U.N.
failings and possible criminal activity by U.N. officials for
several reasons, including its lack of investigative power and the
absence of real independence from the U.N. Indeed it is far more
likely that the five congressional investigations now underway will prove
more effective than the Volcker Committee in uncovering the full
story of the Oil-for-Food fraud that allowed the Saddam Hussein
regime to enrich itself at the expense of the Iraqi people.
Paul Volcker and an Apparent
Conflict of Interest
It should be an
issue of concern that Mr. Volcker's own outlook may be influenced
by past associations. It is vitally important that any independent
inquiry into the extremely serious allegations leveled against the
United Nations-which could have far-reaching implications for the
reputation of the world organization-be seen as completely
independent of the U.N. It is just as important that the person
charged with heading such an inquiry be seen as completely unbiased
and objective in his approach toward the organization he is
investigating. In the corporate world, for example, it would be
inconceivable for an independent inquiry into fraud and corruption
to be headed by someone with strong ties and loyalties to the
corporation under investigation.
But in the case of
Paul Volcker and the Independent Inquiry Committee, there is an
apparent conflict of interest that brings into question whether the
Committee can objectively investigate the United Nations. When
Volcker was appointed to head the Oil-for-Food investigation in
April 2004, it was not widely known to the general public, the
world's media, or the U.S. Congress that he was at the time a
director of the United Nations Association of the United States of
America (UNA-USA) and the Business Council for the United Nations.
Mr. Volcker is listed as a director in the 2003-2004 UNA-USA annual
as well as the annual reports for 2001-2002 and 2000-2001.
There is no
mention of Paul Volcker's involvement with UNA-USA in his biography
on the Independent Inquiry Committee's website, a rather striking
omission considering the fact that he is charged with a highly
sensitive investigation into the U.N.'s operations. Volcker does
disclose his other institutional affiliations-such as the
Trilateral Commission, the Institute of International Economics,
the American Assembly, and the American Council on Germany-but is
seemingly shy about his work with the United Nations
The United Nations
Association of the United States of America is a pro-U.N. advocacy
group that "supports the work of the United Nations." In the
grateful words of Kofi Annan,
United Nations Associations in many other countries, but this one
is unique-both in the challenges it faces and in the energy and
resources it devotes to tackling them. From our perspective, it is
hard to think of any work more valuable than what you do to improve
the understanding of United Nations issues in our host country.
A key goal of the
United Nations Association is to "greatly expand and contribute to
Americans' understanding of the U.N. and its importance to the U.S.
by increasing the channels through which we inform Americans,
particularly opinion-makers, elites, UNA-USA members and
It is also a forceful advocate of U.S. membership of the
International Criminal Court.
UNA-USA has played
a lead role in defending the U.N.'s response to the Oil-for-Food
scandal and the embattled leadership of U.N. Secretary-General Kofi
Annan. It has also prominently defended the reputation of the
Oil-for-Food Independent Inquiry Committee. To a great degree,
UNA-USA has acted as the U.N.'s and the Volcker Committee's chief
cheerleader with regard to the Oil-for-Food controversy. According
to its "Talking Points on the Oil for Food Program," UNA-USA firmly
believes the Volcker report "will be objective, thorough and fair"
and states that "the U.N. Security Council-not the Secretary
General or his staff-had ultimate oversight authority for the Oil
for Food Program." UNA-USA has criticized the "politically
motivated attacks" on the U.N. over Oil for Food and the calls for
Annan's resignation that, it says, "constitute an effort to
undermine the U.N., which is a real objective for many of those who
are distorting the facts on this complex issue."
partner organization, the Business Council for the United Nations
(BCUN), works to "advance the common interests of the U.N. and
business in a more prosperous and peaceful world." One of its chief
underwriters was BNP Paribas, the French bank that held the escrow
account for Oil-for-Food funds. BNP donated more than
$100,000 to UNA-USA and BCUN in 2002 to 2003. BNP's role in the
Oil-for-Food scandal is currently being investigated by the House
International Relations Committee, as well as by the
Inquiry Committee into the Oil-for-Food scandal has been hailed by
its supporters as a huge step forward for the United Nations in
terms of increasing accountability and transparency. It has been
held up as an example of a new spirit of openness supposedly
sweeping through the world body and as a powerful symbol of Kofi
Annan's stated objective to restore the reputation of the U.N.
however, the Volcker Committee suffers from a huge credibility
problem of its own. It is hard to see how a team of investigators
hand-picked by the U.N. Secretary-General, whose own son is a
subject of investigation, could be considered truly independent.
There is also a major question mark over its Chairman's neutrality.
After Mr. Volcker's several years as a director of the United
Nations Association and Business Council for the United Nations, it
is difficult to see how he could cast a critical, objective eye
over the U.N.'s leadership.
Gardiner, Ph.D., is Fellow in Anglo-American Security Policy at The
Heritage Foundation. William Schirano, Research Assistant in
Foreign Policy at The Heritage Foundation, assisted with research
for this paper.