'Kofigate' threatens US aims in Iraq'
- --- In MarcusMosiahGarvey@yahoogroups.com, "noination"
World> Terrorism & Security
posted April 22, 2004,
UN's oil-for-food scandal comes at a bad time for transition of
authority. -- by Tom Regan | csmonitor.com
The BBC reports that Saddam Hussein, former leader of Iraq, made
billions of dollars more than previously thought from the United
Nations' oil-for-food program, according to US officials. The US
Treasury estimates $10 billion of "illicit gains" were made between
1997 and 2002 from the scheme. And the Independent reports
allegations that three top UN officials, including Benon Sevan, the
Cypriot-born UN undersecretary general who ran the program for six
years, took million dollar bribes from Mr. Hussein while overseeing
The UN oil-for-food program in Iraq, started in 1996, was supposed to
be a humanitarian effort. Profits from Iraqi oil sales were to be
used exclusively to buy food and medicine for the people of Iraq. The
program was stopped in November of 2003.
Find out more.
The allegations of UN corruption, which have become know in some
circles as "Kofigate," have become serious enough that UN Secretary
General Kofi Annan appointed an independent panel last week, headed
by former US Federal Reserve chairman Paul Volcker, to look into the
allegations. Other members of the investigative panel include
Yugoslav war crimes prosecutor Richard Goldstone of South Africa and
the Swiss criminal law professor Mark Pieth. On Wednesday, CNN
reported the UN Security Council unanimously adopted a resolution
welcoming the panel. The CBC reported Thursday that Resolution
1538 "may come to be remembered as the official lifting of the lid on
a financial scandal that could ultimately dwarf even the worst
excesses of Wall Street."
Russia, one of the nations that is alleged to have profited the most
from the oil-for-food scheme, last week was reluctant to agree to
such a resolution. But The New York Times reports that last weekend
Mr. Annan personally phoned Sergey Lavrov, the Russian foreign
minister, who until last month was the country's ambassador to the
United Nations. On Monday, Russia changed its position.
The US Congress is also investigating the allegations. The Guardian
reported Wednesday Bush administration officials who were involved in
the UN program told a House subcommittee "there had been a widespread
system of kickbacks benefiting officials within Iraq, including
Saddam [Hussein]." But they also said there was no "corroborated
evidence so far" suggesting UN officials had been part of the scam.
The allegations originally arose in January, when Al Mada, an
independent Iraqi newspaper, first, reported that "presidents,
reporters and business people" had received millions of dollars in
bribes from Iraq. Al Mada, which had obtained documents from the
former Iraqi oil ministry, listed 240 people, political parties and
countries that received kickbacks for either their support of the
Hussein regime or their silence about the plan.
The Daily Telegraph reported Thursday on how the kickback scheme
The scam worked on two levels. Not only did Iraqi oil purchasers
benefit from being able to resell at huge profit but also Saddam
distributed "oil vouchers" to corporations, political parties and
individuals whom he favored. Instead of alleviating the hardships of
Iraqis under the oil-for-food program, the organizations and
individuals favored by Hussein allegedly feathered their own nests.
Hussein would also hand out oil vouchers instead of cash for goods
imported illegally into Iraq in violation of United Nations
sanctions. The recipient, or middleman, would hand the vouchers for
Iraqi oil over to a range of firms operating in a neighbouring Arab
countries. Those firms then paid the middleman commissions of
anything between five cents and 30 cents per barrel, depending on
Meanwhile, on Tuesday, ABC News reported it had obtained a letter
from the Iraqi Oil Ministry that described how UN undersecretary
general Sevan had indicated which company should handle his "personal
oil deal, estimated to be worth as much as $3.5 million." Two other
people identified only as "senior UN officials" were suspected of
taking "multimillion-dollar bribes." Mr. Sevan, who has submitted his
resignation for May 31st, denied the charges.
Washington Post columnist Jim Hoagland writes that it is a "perilous
hour" for Annan.
Clearing up what is becoming known as the oil-for-fraud fiasco is
essential to Annan's larger task of rebuilding the shattered trust
between his organization and its most important partner, the United
States. The burden of finding a new balance in global cooperation
does not lie only with the Bush administration or its successor. It
takes at least two to multilateral.
The Christian Science Monitor writes that the timing couldn't be
worse for a UN scandal, especially for the US and its plans in Iraq.
Just as US President Bush and UK Prime Minister Tony Blair announced
their support for a UN plan to guide the transition to democracy in
Iraq, the UN is investigated for corruption.
But The Washington Post writes that even with the scandal hanging
over it, the UN has one remaining asset in Iraq and it's a powerful
It is not the United States, and so it has a better chance of
overseeing the creation of a new Iraqi government without provoking a
nationalist backlash. Key leaders who won't agree even to meet with
US administrator L. Paul Bremer, such as Shiite Grand Ayatollah Ali
Sistani, have talked to [UN special envoy] Mr. Brahimi and even
invited his intervention.
Finally, the The Village Voice reports on how the UN is not the only
organization having problems with corruption in Iraq. The Coalition
Provisional Authority (CPA) is scrambling to deal with corruption
charges against some of the members of the Iraqi Governing Council
(IGC) in a separate incident. A CPA memo obtained by the Voice
which also details a myriad of other problems the CPA is having in
Iraq advocates filing corruption charges against several members of
Fanning the embers of distrust is the US's failure to acknowledge
that the constituencies of key Governing Council members "are not
based on ideology, but rather on the muscle of their respective
personal militias and the patronage which we allow them to bestow,"
according to the memo's author. Using the Kurds as an example, he
reveals that "we have bestowed approximately $600 million upon the
Kurdish leadership, in addition to the salaries we pay, in addition
to the USAID projects, in addition to the taxes which we have allowed
them to collect illegally." To underscore the point, the author adds
that he recently spent an evening with a Kurdish contact watching The
Godfather trilogy, and notes that "the entire evening was spent
discussing which Iraqi Kurdish politicians represented which
The memo says solving the problem is key for the US for one important
reason since the US appointed the members of the IGC, "their
corruption is seen as our corruption."
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