The $34 million U.N.-appointed Independent Inquiry
Committee (IIC) issued its fifth and final report on October 27.
The 18-month investigation, chaired by Paul Volcker, has documented
a huge amount of evidence regarding manipulation of the $60 billion
Oil-for-Food Program by the Saddam Hussein regime with the
complicity of more than 2,200 companies in 66 countries as well as
a number of prominent international politicians.
report paints an ugly tableau of bribery, kickbacks, corruption,
and fraud on a global scale-without a doubt the biggest financial
scandal in modern history. It amply demonstrates how the Iraqi
dictator generously rewarded those who supported the lifting of
U.N. sanctions on Iraq and who paid lip-service to his barbaric
regime. Oil-for-Food became a shameless political charade through
which Saddam Hussein attempted to manipulate decision-making at the
U.N. Security Council by buying the support of influential figures
in Russia and France.
The IIC evidence
confirms many of the findings of the groundbreaking Senate
Permanent Subcommittee on Investigations (PSI) inquiry, which
initially exposed the close ties between senior French and Russian
politicians and the Iraqi regime.
The IIC's findings also broadly support the evidence presented by
the PSI in its recent report on the activities of British MP George
The IIC's Key
The latest IIC
report "illustrates the manner in which Iraq manipulated the
Programme to dispense contracts on the basis of political
preference and to derive illicit payments from companies that
obtained oil and humanitarian goods."
- "Oil surcharges
were paid in connection with the contracts of 139 companies and
humanitarian kickbacks were paid in connection with the contracts
of 2,253 companies."
Companies accused of paying kickbacks to the Iraqi regime include
major global corporations such as Daimler-Chrysler AG, Siemens AG,
- The Saddam
Hussein regime received illicit income of $1.8 billion under the
Oil-for-Food Program. $228.8 million was derived from the payment
of surcharges in connection with oil contracts. $1.55 billion came
through kickbacks on humanitarian goods.
- In allocating its
crude oil, "Iraq instituted a preference policy in favor of
companies and individuals from countries that, as Tariq Aziz
described, were perceived as 'friendly' to Iraq, particularly those
that were members of the Security Council."
- Russian companies
purchased 30 percent of oil sold under the Oil-for-Food Program,
worth approximately $19.3 billion.
French companies were the second largest purchasers of Iraqi crude
oil under the Program overall, contracting for approximately $4.4
billion of oil from Iraq. "Total International Limited and SOCAP
International Limited contracts accounted for approximately 74
percent of the oil purchased by French companies under the
awarded 'special allocations' not only to companies, but also to
individuals and their representatives. These individuals were
influential in their respective countries, espoused pro-Iraq views,
or organized anti-sanctions activities. They included present and
former government officials, politicians and persons closely
associated with these figures, businessmen and activists involved
in anti-sanctions activities."
- A "Command
Council" was established by the Iraqi regime "to determine the
distribution of oil contracts to companies and individuals of
interest." It was headed by Vice President Taha Yassin Ramadan, and
included Deputy Prime Minister Tariq Aziz and Minister of Finance
- Several Russian
political parties and politicians received allocations of Iraqi
Party of the Russian Federation (125.1 million barrels)
Zhirinovsky and the Liberal Democratic Party of Russia (73 million
Peace and Unity (55.5 million barrels)
Voloshin, Chief of Staff to Russian President Vladimir Putin (4.3
- The Iraqi
government, in addition to giving preference to French-based
companies, "granted oil allocations to individuals based in France
who espoused pro-Iraq views." These included:
Merimee, Special Adviser to the United Nations, with the rank of
Under-Secretary General (6 million barrels)
Pasqua, former Minister of the Interior (11 million barrels)
Kaspereit, businessman and son of French MP Gabriel Kaspereit (over
9.5 million barrels)
Boidevaix, former Director of the Department for North Africa and
the Middle East, French Ministry of Foreign Affairs (over 32
Munier, Secretary-General of the French-Iraqi Friendship
Association (11.8 million barrels)
- British Member of
Parliament George Galloway was allocated "a total of over 18
million barrels of oil" either directly "or in the name of one of
his associates, Fawaz Abdullah Zureikat." Nearly two-thirds of the
oil was lifted, or loaded by tanker at a port.
received commissions for handling the sale of approximately 11
million barrels that were allocated in Mr. Galloway's name."
Iraqi officials, oil allocations were granted to fund Mr.
Galloway's anti-sanctions activities. Iraqi officials identified
Mr. Zureikat as acting on Mr. Galloway's behalf to conduct the oil
transactions in Baghdad."
Formigioni, the President of the Lombardy Region of Italy was
"granted a total of over 27 million barrels of oil" by the
Government of Iraq. Over 24.1 million barrels of this oil were
In light of the
latest findings by the IIC, as well as the evidence presented by
the Senate Permanent Subcommittee on Investigations, the United
States should press strongly for U.N. member states to investigate,
and where appropriate prosecute, individuals and companies that
gained illicit earnings through the Oil-for-Food Program. In
particular, the United States should call on the Russian, Italian,
and British governments to act against politicians alleged to have
received oil allocations in return for support for the Saddam
Hussein regime. Prosecutors in Paris
have already charged several French officials with corruption and
bribery relating to the scandal. In the United States,
several indictments have been issued in the past few months by the
Department of Justice and the Manhattan District Attorney's
The report should
also prompt widespread soul-searching within the United Nations,
whose administrators turned a blind eye to massive wrongdoing in a
humanitarian program designed to help the weakest and most
vulnerable in Iraq. The fact that the Baathist regime was able to
get away with such a vast scandal under the noses of U.N.
bureaucrats, and in some cases with their complicity, represents
both spectacular incompetence as well as extremely poor leadership
at the top of the world body.
Secretary-General Kofi Annan and Deputy Secretary-General Louise
Frechette should take responsibility for a scandal that has
irreparably damaged the U.N.'s reputation. Both should resign for
presiding over the biggest management failure in the history of the
The IIC's latest
findings should increase the pressure for wholesale reform of the
United Nations, and reinforce the need for the United States to
push for greater accountability and transparency at Turtle Bay.
Congress and the Bush Administration must press for significant
management reform at the U.N. as well as for a far greater degree
of external oversight for its operations.
The United States
should threaten to withhold a portion of its assessed contribution
for the United Nations unless a series of reform measures are
implemented. The U.S. must also demand the prosecution of all U.N.
officials accused of criminal activity, including Benon Sevan, the
former director of the Oil-for-Food Program, who is currently in
hiding in Cyprus.
Administration should strongly back the efforts of Congressman
Henry Hyde and the House International Relations Committee in
advancing a powerful U.S. agenda for fundamentally reforming the
United Nations and making it accountable to the American
Verdict on the
The final report
of the Independent Inquiry Committee is by far the strongest of the
five it has issued over the past eight months. The evidence
presented is comprehensive, damning, and a wake-up call to those
who naively believed that the Saddam Hussein regime could be
trusted to comply with U.N. sanctions. Saddam's multi-billion
dollar fraud, carried out with the complicity of prominent
political figures across Europe as well as thousands of
international companies, was halted only by the liberation of Iraq
by the United States and Great Britain, in the face of determined
opposition by France and Russia. It is not difficult to see why
powerful political interests in Paris and Moscow were so
fundamentally opposed to a war that would open the archives of
Baghdad to close scrutiny and subsequently cause huge political
The overall IIC
investigation should not, though, be viewed as the final say on the
Oil-for-Food scandal. It should be seen as an important but at
times flawed and incomplete inquiry that leaves many questions
unanswered in relation to the role of senior U.N. officials,
including Kofi Annan and his chief aide Iqbal Riza.
leadership of the Oil-for-Food inquiry was lackluster and
uninspiring, as well as confrontational and condescending toward
congressional investigations. His unwillingness to share U.N.
documents with Congress was a major source of tension between the
IIC and Capitol Hill. The monopoly wielded by the Volcker Committee
over United Nations Oil-for-Food papers was, and continues to be,
unacceptable. Volcker's stubborn refusal to fully cooperate with
Congress has impeded the efforts of House and Senate committees in
their own inquiries.
It is imperative
now that Mr. Volcker immediately release all U.N. documents in his
possession, as well as transcripts of interviews conducted with
U.N. officials and other individuals linked to the Oil-for-Food
scandal. The Volcker Committee especially owes it to the people of
Iraq, who footed the huge bill for their inquiry, to give them full
access to all U.N. records pertaining to the Oil-for-Food
inquiry was less than forthright in its analysis of possible
wrongdoing and incompetence at the very top of the U.N.
Secretariat, a point sharply highlighted by the resignation in
April of former FBI agent Robert Parton, the IIC's lead
investigator on the Kofi Annan/ Kojo Annan issue. Parton resigned
on a matter of principle, in protest at the Volcker Committee's
unwillingness to take a harder line regarding the actions of the
Secretary-General. Parton subsequently handed over thousands of
pages of documents relating to the Annan investigation to the House
International Relations Committee.
A huge cloud
remains over the U.N. Secretary-General with regard to his meetings
with senior officials from the Swiss Oil-for-Food contractor
Cotecna, which employed his son Kojo from 1995 to 1997 and
continued to pay him through 2004. Congressional investigators are
examining evidence that questions Annan's central claim that he was
unaware of Cotecna's bid for a lucrative U.N. Oil-for-Food contract
have also emerged regarding blatant interference with the
conclusions of the Volcker inquiry by the office of the U.N.
Secretary-General. A recent report by the Los Angeles Times
revealed an extraordinary last-minute intervention by Annan to
protect his own name and head off the prospect of resignation,
raising huge doubts over the independence of the U.N.-appointed
inquiry. Based on an interview with the IIC Chairman, the
before the publication of Volcker's report in September assessing
Annan's culpability, the UN chief and his lawyer asked Volcker to
change language about business dealings by Kojo Annan that they
thought could force his father's resignation. Volcker agreed. It
was merely a part of the due process, he said."
It is strikingly clear from this revelation
that the Volcker Committee was subject to U.N. intervention from
the highest levels. In future years, the Secretary-General should
not be permitted to hand-pick the investigative committee into a
U.N. scandal and then pass it off as "independent." Such inquiries
will always be open to the possibility of political interference
and manipulation by those being investigated. The United States
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
investigation may have ended, but several other major inquiries
will continue to gain momentum and reveal new findings relating to
the Oil-for-Food scandal. These include the leading investigations
on Capitol Hill led by Henry Hyde in the House and Norm Coleman in
the Senate, in addition to the Department of Justice inquiry. It
will be many months, even years, before the full extent of the
corruption and mismanagement within the United Nations is
Ph.D., is the Bernard and Barbara Lomas Fellow at the
Margaret Thatcher Center for Freedom in the Kathryn and Shelby
Cullom Davis Institute for International Studies at The Heritage
Foundation. The author is grateful to James Dean, Deputy Director
of Government Relations at the Heritage Foundation, for his advice
and suggestions. Heritage intern Matt Rooney assisted with research
for this report.
Riza, Annan's chief of staff from
1997 to 2004, should face further scrutiny in relation to his
extraordinary decision to shred thousands of U.N. documents between
April and December 2004. Among these documents were the entire U.N.
Chef de Cabinet chronological files for 1997, 1998, and 1999, many
of which related to the Oil-for-Food Program. Riza's actions gave
the impression of a major cover-up at the heart of the United
Nations, and raised further serious concerns over interference with
the work of the Volcker inquiry by U.N. officials.