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WebMemo #729 on International Organizations

April 21, 2005

Time for Paul Volcker To Resign

By

The resignation of two senior investigators probing the U.N. Oil-for-Food scandal is the latest blow to the credibility of the U.N.-appointed Independent Inquiry Committee into the Oil-for-Food Program, chaired by Paul Volcker. The resignations of Robert Parton and Miranda Duncan-the former was senior investigative counsel and "the lead investigator on issues pertaining to allegations of impropriety relating to the secretary-general and his son Kojo Annan," and the latter a member of Parton's investigative team-have thrown the Volcker Committee into turmoil. According to an Associated Press report, the two resigned because they believed the Committee's Second Interim Report was "too soft on the secretary-general," Kofi Annan.[1]

 

These resignations are just the latest developments calling into question the Volcker Committee's impartiality. Mr. Volcker should step aside and make way for a new chairman who has no prior ties to U.N.-affiliated groups and whose objectivity could restore the Committee's tarnished credibility.

 

The resignations reflect growing tensions within the Volcker Commission over the interpretation of evidence relating to Kofi Annan's role in the Oil-for-Food scandal. Mark Pieth, one of the three leaders of the IIC investigation, has made it clear that Parton and Duncan resigned as a matter of principle over disagreements with the conclusions drawn by the Volcker Committee. Referring to the two investigators, Pieth said, "What we did was we told the story that they found, but we made different conclusions than they would have."[2] At least one key witness, a former business partner of Kojo Annan, alleges that the Volcker Committee ignored evidence he gave that was damaging to Kofi Annan.[3]

 

By all appearances, Mr. Annan seems to be using Paul Volcker as a shield to protect his own reputation. A more critical and neutral chairman would have drawn far harder-hitting conclusions from the mountain of damaging evidence that has emerged from the investigation. Despite his investigators pre­senting an ugly tableau of incompetence, misman­agement, corruption, and deception at the top of the United Nations, Mr. Volcker has shied away from direct criticism of the Secretary-General and the United Nations as an institution. Where the evidence has been harmful to Mr. Annan, Mr. Volcker has clearly played down his findings.

 

There are major questions about the Chairman's neutrality. Mr. Volcker spent several years as a director of the United Nations Association (UNA-USA) and the Business Council for the United Nations.[4] With this background, he may be unable to cast a critical, objective eye on the U.N.'s leadership. The Secretary-General was no doubt aware of Volcker's close ties to the UNA-USA when he appointed him to head the Oil-for-Food investigation.

 

The resignation of two of Mr. Volcker's investigators on the grounds that he has been 'soft' on the U.N. Secretary-General confirms that there are serious underlying problems with the Committee. The resignations of Mr. Parton, an experienced and respected former FBI agent, and one of his investigators, combined with unanswered questions about Mr. Volcker's own neutrality, cast doubt over the Committee and Mr. Volcker's leadership of it.

 

Paul Volcker should step down and make way for a new chairman without previous ties to the United Nations or its affiliates. Mr. Volcker will surely appreciate that in the corporate world, an independent inquiry into fraud and corrup­tion could not be headed by someone with strong ties and loyalties to the corporation being investigated. A weaker standard should not prevail at the United Nations, especially given the weight of the charges leveled against senior U.N. staff.

 

U.N. Manipulation

The U.N.-appointed Independent Inquiry Commit­tee into the United Nations Oil-for-Food Program released its first Interim Report[5]on February 3 of this year and its Second Interim Report[6]on March 29. The U.N. response to the interim reports has been breathtaking in its arrogance. Notably absent has been any sign of humility, contrition, or accountabil­ity on the part of the Secretary-General and his senior aides. Indeed, it is hard to avoid the conclusion that the leadership of the United Nations is still in denial over the U.N.'s declining credibility. The ruling clique that surrounds Mr. Annan at the top of the United Nations continues to behave with impunity while projecting an air of superiority deeply resented by many rank-and-file U.N. employees.

 

Within hours of its release, the Second Interim Report was greeted with cries of "exoneration" from Annan and his staff after Committee Chairman Paul Volcker controversially found "no evidence that the selec­tion of Cotecna in 1998 was subject to any affirma­tive or improper influence of the Secretary-General in the bidding or selection process." In his press conference following the release of the Second Interim Report, a boastful Annan said, "After so many distressing and untrue allegations have been made against me, this exoneration by the independent inquiry comes as a great relief."[7] When asked if he was planning to resign anytime soon, Annan responded, "Hell no!"

 

A closer reading of both interim reports reveals however serious leadership failures at the United Nations. The evidence contained in the reports adds to the growing pic­ture of mismanagement, incompetence, and unac­countability at the U.N. Contrary to Annan's claims, the evidence does not vindicate him or the United Nations.

 

Indeed, the destruction of thousands of critically important documents by Annan's Chief of Staff Iqbal Riza, the failure by Kofi Annan to order an independent investigation into potential conflicts of interest relating to his son's employment with an Oil-for-Food contractor, and previously undisclosed meetings between Kofi Annan and execu­tives of that contractor make a mockery of U.N. claims of vindication. The document shredding alone gives the impression of a major cover-up at the very heart of the United Nations and casts a dark cloud over the Secretary-General.

 

Mr. Volcker's unwillingness to draw unfavorable conclusions regarding the actions of the U.N. Secretary-General, as well as his failure to refute claims of exoneration by Mr. Annan and his staff, have seriously undermined the credibility of his investigation.

 

Recommendations

 

  • Paul Volcker should step down as Chairman of the Independent Inquiry Committee.
    Mr. Volcker should step aside and make way for a new chairman who has no previous ties to U.N.-affiliated organizations and who will be better placed to make objective judgments about the actions of U.N. leaders. The Committee needs a fresh face at the helm. If Mr. Volcker can no longer retain the confidence of his own top staff, he will be unable to maintain the confidence of Congress and the American people.
     
  • A Full Committee Hearing of the House International Relations Committee should be held into the Volcker Committee resignations.
    Former investigators Robert Parton and Miranda Duncan should be invited to testify before Congress to shed light on their resignations and the workings of the Volcker Committee, which have so far been shrouded in secrecy.
     
  • Congress should insist that future inquiries into U.N. scan­dals be fully independent.
    In the future, the U.N. Secretary-General should not be allowed to directly appoint committees to investigate U.N. scandal. Such inquiries will always be open to the pos­sibility of political interference and manipula­tion by those being investigated. Congress should insist that future investigations into U.N. scandals be completely independent of the Secretary-General. Chairmen of such inquiries should also be asked to disclose, upon appointment, all potential conflicts of interest, whether business or political.
Conclusion

The resignation of two investigators from the Independent Inquiry Committee, including its senior investigative counsel, calls into question the ability of the Volcker Committee to deliver a definitive and objective assessment of the U.N.'s administration of the Oil-for-Food Program. The unwillingness so far of Mr. Volcker to criticize the U.N. Secretary-General, despite the emergence of damaging evidence, represents a failure of leadership and calls into question both his neutrality and judgment. It is time for Mr. Volcker to step aside and allow a new figure to head the U.N. Independent Inquiry Committee, to ensure that the leadership of the United Nations is held to account for the biggest scandal in the history of the world body.

 

Nile Gardiner, Ph.D., is Fellow in Anglo-American Security Policy in the Douglas and Sarah Allison Center for Foreign Policy of the Shelby and Kathryn Cullom Davis Institute for International Studies at The Heritage Foundation.



[1]Desmond O. Butler and Nick Wadhams, " Two on Oil-for-Food Probe Resign," Associated Press, April 21, 2005.

 

[2] Ibid.

 

[3] For background, see Robert Winnett, "'Cover-Up Row' on Report Clearing Annan," The Sunday Times (London), April 3, 2005, at www.timesonline.co.uk/article/0,,2087-1552246,00.html. The key witness is Pierre Mouselli, a French-Lebanese businessman. In the Times article, Mouselli's lawyer alleges that "crucial information about Kofi Annan was removed at the last possible moment.… We were told point blank last Monday that Mouselli's information was credible and important. Then hours before publication, a new witness suddenly emerges making derogatory comments about my client and the tone and content of the report changes." Mouselli's interviews with the Volcker Committee are documented in Second Interim Report, p. 32.

 

[4] See Nile Gardiner, Ph.D., " The Volcker Investigation into the U.N. Oil-for-Food Scandal: Why It Lacks Credibility," Heritage Foundation Backgrounder No. 1819, February 1, 2005.

 

[5] Independent Inquiry Committee into the United Nations Oil-for-Food Program, First Interim Report, February 3, 2005, at /static/reportimages/96A08776B3701770098CA26318C3E365.pdf

 

[6] Independent Inquiry Committee into the United Nations Oil-for-Food Program, Second Interim Report, March 29, 2005, at /static/reportimages/934D6AD60483790468465D01E63606C6.pdf

 

[7]Kofi Annan, transcript of press conference, United Nations headquarters, March 29, 2005, at www.un.org/News/Press/docs/ 2005/sgsm9788.doc.htm.

 

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