The UN oil scandal

Posted in UN , Other | 06-Dec-04 | Source: International Herald Tribune

UN official Benon Sevan
The assault on the United Nations is escalating. A U.S. Senate subcommittee has raised the estimate of how many illegal billions Saddam Hussein was able to amass under the noses of monitors hired by the United Nations. Several other congressional committees are exploring the scandal. A gaggle of conservatives is calling for the resignation of Secretary General Kofi Annan.

Annan, who drew the wrath of Republican Washington for opposing President George W. Bush's war in Iraq, will have to face the judgment of UN members. But before the call for his scalp gains more momentum, it is important to disentangle the mélange of charges swirling around. The UN bureaucracy does not bear the primary responsibility for letting Saddam amass a secret treasury estimated by official investigators at $10 billion to $21 billion.

There is no doubt that the UN oil-for-food program was manipulated by Saddam to generate substantial sums. The money was then used to buy forbidden goods or otherwise solidify Saddam's power. Most worrisome is that Benon Sevan, head of the program, received oil allotments from Iraq that amounted to a bribe. These charges need to be fully investigated, as they will be by the United Nations' own panel and other inquiries.

But the ever-shriller attacks on oil-for-food and on Annan play down this fact: Iraq accumulated far more illicit money through trade agreements that the United States and other Security Council members knew about for years but chose to accept.

After the first Persian Gulf War, the United Nations imposed sanctions on Iraq that prohibited imports of military value and banned oil exports to deny Saddam money. When it became apparent that Iraq's civilian population was suffering greatly, the sanctions were eased. The so-called oil-for-food program allowed Iraq to export oil under UN supervision, with the revenues funneling into a UN account to be used for food, medicine and other necessities.

By virtually all expert accounts, the sanctions, backed by UN weapons inspectors, and the oil-for-food program achieved their major goals. Iraq's programs to make chemical, biological and nuclear weapons disintegrated, its military forces became a hollow shell, and the health of the civilian population improved. But right from the start, Iraq found ways to circumvent the sanctions, often with the tacit approval of the United States.

An analysis by Charles Duelfer, the chief American weapons inspector in Iraq, estimated that Iraq generated some $11 billion in illicit revenue and used the money to buy prohibited items. The main routes for these illicit transactions - $8 billion worth - were trade deals that Iraq negotiated with neighboring countries, notably Jordan, Syria and Turkey. By the Senate subcommittee's higher count, Iraq got almost two-thirds of some $21 billion through the trade deals or smuggling.

But these trade agreements had nothing to do with the oil-for-food program, and were hardly a secret. The United States actually condoned Iraq's trade deals with Jordan and Turkey, two allies whose economies suffered from the sanctions. This was a reasonable price to pay for maintaining their support on the main objective - denying weapons of mass destruction to Saddam.

American diplomats tried, unsuccessfully, to persuade Syria to stop buying Iraqi oil outside of the oil-for-food program, but did little to crack down on that trade. Syria became a major supplier of military goods to Iraq. This was a failure of American diplomacy, not Kofi Annan.

The UN bureaucracy had no power to prevent these illicit oil or arms deals outside the oil-for-food program. It was the responsibility of member nations to adhere to sanctions imposed by the Security Council. Those members with the most diplomatic, economic and military power were obliged to help enforce them. Thus the primary blame for allowing Iraq to accumulate illicit billions lies with the United States and other Security Council members that winked at prohibited oil sales, mostly for sensible reasons.

The investigations now under way need to determine to what extent UN officials could have detected and stopped Iraq's financial shenanigans in the program they did monitor, oil-for-food. Suspicions were sometimes voiced at meetings of the relevant Security Council committees, but they took a back seat to the main goal of preventing Iraq from getting weapons of mass destruction.

Kofi Annan's role will also have to be laid out fully. He has, unfortunately, issued inconsistent statements about the role of his son, Kojo Annan, in working abroad for a Swiss company that won a contract to monitor imports under the oil-for-food program. The whiff of nepotism has set the hounds baying, but what all that has to do with Saddam's illicit billions is murky. It seems wildly premature to call for Kofi Annan's resignation.