UN "riddled with fraud" ??

How do we know this?


The Independent Inquiry Committee into the United Nations Oil-for-Food Programme, headed by former Federal Reserve chief Paul Volcker, issued an Interim Report on Thursday. It's contents are quite different than the way it is framed in typical reportage.

This is the second part in my attempt to contextualize the so-called UN Oil-for-Food (OFF) "scandal." The first part on Senator Norm Coleman (R-MN) -- who is a tool of radical US statists attempting to destroy the United Nations -- was posted in December.

Part I: December 5, 2004: Norm Coleman
Part II: February 6: Oil-for-food -- UN "riddled with fraud" ??
Part III: Year zero in Spring 2003: Pentagon/CPA burns Iraq
Part IV: Iraqgate

First let's get out of the way the pervasive notion that OFF reflects top-to-bottom corruption of the United Nations. The PBS Newshour displayed the typical symptoms of this problem in a segment on the Volcker report broadcast Thursday February 3. Correspondent Spencer Michels framed the report like this:

The investigation, commissioned by the U.N. Security Council and headed by former Federal Reserve Chairman Paul Volcker, found the program was "tainted" from top to bottom and riddled with fraud.

Later in the interview portion of the segment, a pithy exchange occurred between PBS Newshour correspondent Margaret Warner and Volcker:

MARGARET WARNER: You've been at this about ten months. Are you prepared to say now -- how big a scandal does this appear to you?

PAUL VOLCKER: Well, let me -- I'm glad you raise that question because in the preliminary comments it was suggested that we had somehow discovered fraud and corruption up and down in the U.N. That is definitely not the case. The only thing that we are prepared to opine upon now is what was in this preliminary report that dealt with these contractors, that dealt with Benon Sevan, dealt with the auditing, as you said, dealt with administrative funds that the U.N. was using to finance their own operations, and by and large we found that that was responsibly used. There's further investigation necessary there, but we haven't got findings now that justify the statement I heard on this program earlier.

MARGARET WARNER: All right. Well, your correction is noted. And thank you, Mr. Volcker, very much. (emphasis added)

Back up a few months to the early break of the OFF "scandal," a period about one year ago. Please see this item posted in Deep Blade Journal on April 5, 2004 for background.

Here we saw how reactionary tendencies in the mainstream media accepted almost uncritically what is nakedly a right-wing campaign to select facts (some true, some not) and control emphasis, placing the scandal spotlight squarely on Saddam Hussein and his relationship to international figures associated with the UN and US competitors in Iraq.

Let's start with rightist Wall Street Journal pundit Claudia Rosett. Ms. Rosett engaged in a hyperbolic smear campaign against the UN and wantonly mis-characterized the operation of Oil-for-Food.

Over the course of a series of pieces, she again and again hammered at a "UN is Saddam is evil" nexus. This quote from an April 28, 2004 piece is typical:

Basically, Oil-for-Food was Saddam -- just slightly harder to spot, swaddled as he was in that blue U.N. flag.

Rosett's thing is to present a laundry list of entities who had business in Iraqi oil during the 1996-2003 period and scream about how untoward all of this is. Innuendo and charges of guilt by association flow from Rosett's pen like an inky stream.

Well, US companies shared a good bit of this business. Yeah, some money flowed back into the regime and was stolen by Saddam. That was Saddam's nature. But the US had a lot more control of this than Ms. Rosett lets on. Even the likes of Judith Miller at the New York Times, an inciter of war like no other, has been onto the story of the role of US companies in OFF dealings. See two of her stories here and here.

Speaking of Judith Miller, I'll also mention that there was in the winter of 2004 a guy behind the curtain pulling the levers controlling the flow of the documents. This was none other than Miller's frequent source, the multi-agent Ahmed Chalabi. In a "weapons of mass destruction"-like manner, Chalabi slipped selected Oil-for-Food documents to the media from a treasure trove he'd been given charge of by the Pentagon. Again, I don't say he's making everything up, like was done with WMD. But he sure was allowed to control the spin on this "scandal" in a remarkable way.

I'll mention just one more agitprop mouthpiece for the rightist consensus against the UN. It is Jonathan Hunt of FOX News. According to a revealing piece at Media Matters, Hunt trafficked in "innuendo" and "vague allegations" in oil-for-food coverage.

The effect has been extraordinary. Everyone in the media now knows what a huge scandal Oil-for-Food was!!

UN 1, Coleman/Rosett/Hunt 0
It seems like most news outlets -- as the Newshour did, see above -- have used this frame for presenting the Volcker report. But what has Volcker really said? Yes, Benon Sevan seems to be culpable for personal enrichment of himself and friends. Kofi Annan's son had similar aims. Clearly Saddam had goals of personal enrichment. That's a familiar disease in America. But what else?

Today, the Observer has an excellent piece by Peter Beaumont, The defiant UN starts fightback: Americans confounded as corruption probes falter.

Despite US mainstream framing, the whole Rosett/Coleman/Hunt narrative is basically a bust. To wit:

Volcker notes, too, a failure of procedures in awarding contracts to manage the scheme - which became so politicised that they were given to suit the agendas of Security Council members, the US, Britain and France included.

Volcker's report does not reveal any systematic corruption. But what it has shown is the massive scale of Iraq's smuggling of oil during the sanctions period with the knowledge of members of the Security Council's permanent five, including the US.

It is a sign of the frustration of the UN's right-wing critics that their best response to the investigation is to suggest that, as a supporter of the UN's humanitarian goals through America's UN Association, Volcker is tarnished. Instead, the ongoing UN investigation - despite five separate congressional probes - seems to have given it a bullish new confidence.

I spent some time with a table issued by Volcker that attempts to compare how the various estimates of the size of the scandal were arrived at. Unsurprisingly, the crazy $21 billion figure used by Coleman is essentially vaporous, based on "anecdotal" recollections extrapolated to every conceivable OFF transaction.

Coleman was ready for this. Back in December, he wrote in his call for Kofi Annan to resign his position as UN Secretary General that, "Mr. Annan has named the esteemed Paul Volcker to investigate Oil-for-Food-related allegations, but the latter's team is severely hamstrung in its efforts...."

In other words, any null findings must be attributed to unreliable UN self-investigation. And today, unsurprisingly, there is a rash of stories (example) generated from the right suggesting the inadequacy of the Volcker effort.

But even so, I may have been wrong then when I felt that pre-dismissal of the Volcker investigation necessarily reflected that the Bush Administration had taken a decision to remove Annan after the Iraqi parliamentary election of last weekend. Looks like that's not gonna happen. New US Secretary of State Condoleezza Rice has gestured in quite the opposite direction. Evidently, the administration still needs Annan and the UN to make its machinations work in post-election Iraq.

The Observer piece concludes,

There is a wider sense in the UN that perhaps the moment of danger from right-wing ideologues in the US who would destroy it has passed. The new US Secretary of State, Condoleezza Rice, has reaffirmed her view of the importance of the organisation. And now, believes Annan, the opportunity is ripe to win back the middle ground of US opinion it feared had turned against it.

The real story of the sanctions period
The bigger real story, of course, is how the 1991 to 2003 sanctions regime with tenacious US insistence punished the Iraqi population. None of the right-wing narratives even mention the 661 committee and how the US used it to maintain rigid control over the whole Iraqi economy. Food and oil were the major commodities, but much else for the health and well-being of the Iraqi population was at stake.

Please peruse the CASI website for voluminous material on the real effect of the Iraq sanctions regime, along with the current humanitarian horrors being wrought on the country. I won't even attempt to sort out all that here. Suffice it to say, the crimes committed against Iraq by the United States make Coleman et al's grumpiness about some piddling kickbacks pretty inconsequential.

The best author for concise, extremely well-argued material on Oil-for-Food is Joy Gordon.

This article, The U.N. is Us: Exposing Saddam Hussein’s silent partner, from the December 2004 issue of Harpers draws the right frame around the issue. Gordon writes,

It may turn out that particular individuals in the U.N. did receive payoffs from Iraq in the form of oil vouchers. But fraudulent acts by individuals —in direct violation of their employer’s policies—are not the same thing as institutional failure. The U.N. barred employees from engaging in financial transactions with Iraq. And if Iraq’s government used the Oil for Food Programme to get cash under the table from its business partners, then we should look at who designed the program in the first place.

What seems to be consistently overlooked—not only by right-wing pundits but at congressional hearings and in the New York Times—is a distinction of enormous significance: the U.N. is being attacked for the policies and failures of particular member nations. The Oil for Food Programme was not some concoction of Kofi Annan’s. It was created by a vote of the members of the Security Council. And every aspect of how the program ran—what goods were allowed, the monitoring procedures, the transfer of funds, everything—was explicitly established by the members of the Security Council. Kofi Annan did not have a vote; but the United States and Britain did, and they approved of every resolution and decision that determined how the Oil for Food Programme worked. Whatever critics may say, “the U.N. bureaucracy” did not design a program that handed over cash to Saddam Hussein. The fifteen members of the Security Council—of which the United States was by far the most influential—determined how income from oil proceeds would be handled, and what the funds could be used for. The U.N.’s personnel operating the Oil for Food Programme did not set these policies. They simply executed the program that was designed by the members of the Security Council.

Please see Rodger Payne's post from November 9, 2004 for additional links to essential Joy Gordon material.

In the next of this series, I'll take a look at the almost unreported spectacle of the Development Fund for Iraq (DFI, the successor to Oil-for-Food) under the control of the US Proconsul and "riddled" itself with unaccountable transactions. Christian Aid and Iraq Revenue Watch (the latter a Soros organization) reported on potentially massive corruption in the virtual disappearance of billions of dollars over just a few months after May 2003 when the UN Security Council, in its wisdom, gave the US total control of all Iraqi assets and oil. There was supposed to be an international oversight board. But the Coalition Provisional Authority (CPA) and its Pentagon master blocked the board's formation and functioning at every step.