April 19, 2004

Did Oil-For-Food Fund Al Qaeda?

Great reporting on two fronts by Claudia Rosett on the Oil-For-Food story, starting with her article at NRO today, in which she explores the possibility that funds skimmed from the billion dollar U.N. program may have been used to fund terrorism in general, and Al Qaeda specifically. Rosett cites reporting done for an article by Marc Perelman in Forward as some of the ground-breaking work on these connections. Here's an excerpt from the NRO piece:

There are at least two links documented already. Both involve oil buyers picked by Saddam and approved by the U.N. One was a firm with close ties to a Liechtenstein trust that has since been designated by the U.N. itself as "belonging to or affiliated with Al Qaeda." The other was a Swiss-registered subsidiary of a Saudi oil firm that had close dealings with the Taliban during Osama bin Laden's 1990's heyday in Afghanistan.

Clearly the loose system of "oversight" set up by Kofi Annan and the U.N. invited abuse. More from Rosett:

As Oil-for-Food worked in practice, there were two glaring flaws that lent themselves to manipulation by Saddam. One was the U.N. decision to allow Saddam to choose his own buyers of oil and suppliers of goods � an arrangement that Annan himself helped set up during negotiations in Baghdad in the mid-1990s, shortly before he was promoted to Secretary-General. The other problem was the U.N.'s policy of treating Saddam's deals as highly confidential, putting deference to Saddam's privacy above the public's right to know. Even the Iraqi people were denied access to the most basic information about the deals that were in theory being done in their name. The identities of the contractors, the amounts paid, the quantity and quality of goods, the sums, fees, interest, and precise transactions involved in the BNP Paribas bank accounts � all were kept confidential between Saddam and the U.N.

And it's been a few weeks since I have referred to any online article as "must reading". But it is for pieces like this essential essay by Rosett in the May issue of Commentary that I reserve the designation. Titled "The Oil-for-Food Scam: What Did Kofi Annan Know, and When Did He Know It?", the Commentary piece meticulously recounts the history of the Oil-For-Food program, and the central role played by Annan in facilitating the corruption that has come to define it. She documents how as Saddam grew more and more belligerent and defiant between 1998 and 2002, the U.N. expanded the program, and granted ever more power and privacy to the dictator. She notes that we expect as much from a murderous tyrant, but we deserve better from the United Nations:

That Saddam Hussein was a monster and a corrupt monster is not news. That he would exploit, for massive personal gain, a humanitarian program meant to relieve the miseries of his countrymen is horrifying but hardly astonishing. Nevertheless, any investigation that confines itself to detailing the abundantly evident corruption of Saddam Hussein will have missed the point.

What lies at the core of this story is the United Nations, and how it came to pass that an institution charged with bringing peace and probity to the world should have offered itself up�willingly, even eagerly�as the vehicle for a festival of abuse and fraud.

To begin with, Oil-for-Food was an enormous venture in central planning, the biggest project of its kind launched in many a decade and one that utterly ignored the lessons about such systems learned at agonizing cost over the past century. The UN Secretariat, in its well-paid arrogance, set out to administer virtually the entire economy of Iraq. Under its eye, all legitimate trading privileges became the franchise of a tyrant who laid first claim to every barrel of oil and every dollar (or euro) of proceeds. How could Oil-for-Food not help consolidate Saddam�s grip on power? Nevertheless, it was with this grand thief of Baghdad that the UN cut its humanitarian deal, chalking in a fat commission for the Secretariat.

Rosett insists on asking the tough questions about the United Nations responsibility for a program she says "tainted almost everything it touched. It was ...a kaleidoscope of corruption...".

At precisely what moment during the years of Oil-for-Food did the UN Secretariat cross the line from "supervising" Saddam to collaborating with him? With precisely what deed did it enter into collusion? Even setting aside such obvious questions as whether individual UN officials took bribes, did the complicity begin in 1998, when Saddam flexed his muscles by throwing out the weapons inspectors and when Oil-for-Food, instead of leaving along with them, raised the cap on his oil sales? Did it come in 1999, when, even as Saddam�s theft was becoming apparent, the UN scrapped the oil-sales limits altogether? Or in 2000 and 2001, when Sevan dismissed complaints and reports about blatant kickbacks? Did it start in 2002, when Annan, empowered by Oil-for-Food Plus, signed his name to projects for furnishing Saddam with luxury cars, stadiums, and office equipment for his dictatorship? Or did the defining moment arrive in 2003, when Annan, ignoring the immense conflict posed by the fact that his own institution was officially on Saddam�s payroll, lobbied alongside two of Saddam�s other top clients, Russia and France, to preserve his regime? Certainly by the time Annan and Sevan, neck-deep in revelatory press reports and standing indignantly athwart their own secret records, continued to offer to the world their evasions and denials, the balance had definitively tipped...

...If anyone is going to take the fall for the Oil-for-Food scandal, Sevan seems the likeliest candidate. But it was the UN Secretary-General who compliantly condoned Saddam�s ever-escalating schemes and conditions, and who lobbied to the last to preserve Saddam�s totalitarian regime while the UN Secretariat was swimming in his cash.

Annan has been with the UN for 32 years. He moved up through its ranks; he knows it well. He was there at the creation of Oil-for-Food, he chose the director, he signed the distribution plans, he visited Saddam, he knew plenty about Iraq, and one might assume he read the newspapers. We are left to contemplate a UN system that has engendered a Secretary-General either so dishonest that he should be dismissed or so incompetent that he is truly dangerous�and should be dismissed.

William Safire calls Oil-For-Food "the scandal with no friends". The State Department wants no part of anything that would trash the image of the U.N. just when they need it to help in Iraq, and George Bush has been utterly silent on the matter. France and Russia are already doing their best to prevent a Security Council resolution wanted by Paul Volcker, that would give teeth to the investigation into the scandal that he will be leading. From the Safire article:

such a U.N. resolution would reveal dealings with companies in Russia, France and China � all Security Council permanent members whose nationals had their hands in the till. As Senator Lugar suggested, some nations had secret profiteering reasons to keep Saddam in power.

To nobody's surprise, Vladimir Putin's government was the first to say nothing doing. Russia's U.N. spokesman said, "We understand the reputation of the secretariat is in question, but we do not think it is possible to adopt a resolution on the basis of mass media reports."

Of the 270 suspected kickbackers and recipients of illegal allocations of oil whose names were revealed by Al Mada, the Iraqi newspaper, one-fourth were Russian, including a member of the Russian Parliament and a former Russian ambassador to Baghdad. No wonder Putin wanted no "regime change," and now resists any serious investigation.

I'm afraid I have very little confidence that any heads will roll at the United Nations over this massive fraud. Plus ca change....

Please read (and share) the Rosett piece from Commentary. It's an excellent primer on the subject for people who haven't been reading about it for four months, and contains lots of insights for those of us who have.

Here's a listing of previous Wizblog posts related to corruption of the Oil-for-Food program.

Posted by dan at April 19, 2004 9:23 PM