Washington Report, November 2005, pages 32-33

United Nations Report

Volcker’s Latest Oil-for-Food Report Overlooks Missing $9 Billion to U.S. Occupiers

By Ian Williams

	Members of Al-Awda and the anti-Zionist Orthodox Jewish group Neturei Karta gather at Dag Hammarskjold Plaza across from U.N. headquarters in New York Sept. 15 to protest the appearance of Prime Minister Ariel Sharon, who addressed the U.N. World Summit (Courtesy Neturei Karta).

IT HAS BEEN a roller coaster of a ride for U.N. Secretary-General Kofi Annan over the past year. And much of the downhill gravity has come, in one way or another, from Middle Eastern issues.

Annan saw the 60th Anniversary of the United Nations as an opportunity to set the organization on a solid track toward a safer, more secure and prosperous world, and he had spent several years cultivating relations with the biggest and most powerful member, the United States. He went out of his way to make up with Israel and the American lobbies supporting it, understanding the role they played in Washington.

And then came the so-called “Oil-for-Food” (OFF) scandal. As we have pointed out before, any program that fed 90 percent of the Iraqi people, and helped maintain sanctions that prevented Saddam Hussain from acquiring weapons of mass destruction would ordinarily count as a major success. Indeed, the U.S. diplomats at the United Nations and elsewhere praised it fulsomely, and perhaps could give no greater praise than asking it to stay on working after the Iraqi invasion.

Then, however, Ahmed Chalabi realized that the U.N. envoy in Baghdad, Lakhdar Brahimi, had his number. After talking to Iraqi organizations, Brahimi realized that the carpetbagging inventor of spurious WMD schemes and consumer of CIA subventions had virtually no support in the country.

In a pre-emptive mode, Chalabi began to raise a storm about the now defunct Oil-for-Food program. Ironically, it is not impossible that he did so, at least in part, with money from the program itself. Under orders from the Security Council, the OFF program handed over $9 billion in surpluses to the U.S. occupation authorities for the Iraq Development Fund. Its spending was supposed to be monitored by an international monitoring board, but the U.S. would not allow it access. The money evaporated without much in the way of accounting trace. It would be surprising if some of it was not used to help friends of the U.S., such as Chalabi. Lots of other people seemed to get “walking round money.”

Chalabi’s campaign was aimed very personally at Kofi Annan, and soon was taken up by the neoconservative echo chamber, which rarely needs prompting to attack the U.N. Literally incredible claims were made, such as Washington Post columnist Charles Krauthammer’s that this was the biggest financial scandal “in the history of the World!”

Further inflamed by Annan’s reluctant admission that the U.S. invasion of Iraq was “illegal,” the neocon and right-wing pit bulls claimed that Annan had arranged contracts for a company that employed his son; that hosts of U.N. officials had benefited from bribes; that the U.N. was responsible for tens of billions of dollars in revenue from smuggled oil going to Saddam Hussain; and that it had condoned kickbacks. Weakly, instead of denouncing them as deranged witch-hunters, Annan asked former Federal Reserve chief Paul Volcker to conduct an inquiry—which lasted a year longer than it should have and burned up some $40 million that otherwise would have gone to help the Iraqis.

With incredibly inept timing, and as if Annan and the organization did not have enough on their plate,Volcker decided to time his fourth report Sept. 7, the week before the U.N.’s 2005 World Summit.

Although he had to admit that OFF actually had fulfilled its mandate by feeding the bulk of the Iraqi population and making possible the maintenance of sanctions, thus preventing Saddam Hussain from obtaining weapons of mass destruction, Volcker could not bring himself to say that Annan was exonerated—but used instead the strange formula “that the evidence is not reasonably sufficient” to show that he knew of his son’s employer’s bid for a contract. He thus allowed the neocons to infer that the accusation had some merit but was simply unproven.

His committee’s report then went on to, again, castigate Annan for following the advice of his legal officer and his American-nominated management head and not holding a Volcker Inquiry five years earlier. It also implied that Annan was responsible for the, admittedly parlous, caliber of the U.N. administration—despite decades of resistance by member states to the efforts of successive secretaries-general to reform it.

At his previous news conference, Volcker admitted that the inquiry was not even going to look into what happened to the $9 billion in OFF surpluses that were handed over to the American occupation authorities. The transfer of $9.2 billion is recorded in an annex, with no mention of its subsequent disappearance, with amazingly little comment from a body otherwise so censoriously opinionated.

The inquiry also identified $8 billion of revenue for Saddam in oil trades to U.S. allies—nothing to do with the OFF program—that the U.S. condoned and in many cases facilitated. It even shows high-level collusion to allow a tankerload of fuel being smuggled out with the consent of the U.S. Navy, just before the invasion.

In fact, the report shows that the U.S. only became agitated when Syria or Iran began to take part. Once again, it implies that this was in some measure the responsibility of the OFF program and its head, Benon Sevan, when, as Sevan correctly pointed out in a later rejoinder, the enforcement of sanctions was no part of the program’s mandate, let alone capabilities.

Volcker also estimated more than a billion in oil revenue that it believes Baghdad secured in kickbacks—which, he admits, the U.N. reported to the Security Council Sanctions Committee. Once again, this political decision of the member states has somehow been laid at the door of the U.N. and the OFF program.

In the face of all these tens of billions, the sole finding of direct corruption related to OFF was that Sevan, the head of the $100 billion program, reported to the U.N. $147,000 in gifts over four years, and the committee thought it came as commission on otherwise legitimate oil trades from a company run by friends of Sevan. If true, and the evidence the committee adduces is entirely circumstantial, this was clearly unethical—but, as it pointed out earlier, not necessarily illegal.

All in all, it was a very odd and ill-proportioned report, all the more so since it came out shortly after the disastrous debacle of the federal relief effort in New Orleans put into perspective the American claims of the U.N.’s unique inefficiency.

Adding to Annan’s woes in the run up to the Summit was President George W. Bush’s recess appointment of paleocon Ambassador John Bolton, whose first job was to savage the statement for the Sixtieth Anniversary Summit into which months of hard work had gone. It is interesting to speculate why, in the end, so many of the concepts Bolton tried to take out were reinstated. It seems likely that, with the U.S. trying to get European and general support for referring Iran to the Security Council and for setting up Syria, Washington told Bolton that sticking his fingers up potential allies’ nostrils is not necessarily the best way to win friends and influence countries.

Curious Exclusions

However, some of the things that were missing because of him were very odd. The exclusion of references to nuclear disarmament and testing, for example, curious given in the context of trying to control WMDs and terrorist access to them. Unless, that is, one remembers that the biggest hold out on the Non-Proliferation Treaty is Israel, about whose weaponry Bolton never spoke on his frequent visits as the State Department official in charge of disarmament.

In that context, even odder is the way that Bolton successfully toned down the obligation to act in cases of genocide and made it almost an optional choice, thus backtracking on the 1948 Convention on Genocide.

Despite that, the final statement includes what may be the biggest change in international law since the U.N. Charter itself. It overturns the hitherto sacred international law principle of absolute national sovereignty and introduces the doctrine of humanitarian intervention: the idea that the world community has the right to intervene, including taking military action, in the case of “national authorities manifestly failing to protect their populations from genocide, war crimes, ethnic cleansing, and crimes against humanity.”

Sadly, and ironically, this is Annan’s biggest triumph, an answer to the question he posed in  2000: “If humanitarian intervention is, indeed, an unacceptable assault on sovereignty, how should we respond to a Rwanda, to a Srebrenica—to gross and systematic violations of human rights that affect every precept of our common humanity?”

Nor could he shout about it once the draft had been agreed, because delegations may have verbally retracted the triumph.

Of course, in keeping with the rest of the document, the details of what has become known as the “Responsibility to Protect” will have to be worked out in the General Assembly, where we can be sure that there will be a bitter rearguard action from countries that for various reasons kept their peace in the tense moments before the final draft was adopted.

So what about the famous “Reforms”? There were in fact very few reforms to the U.N. structure, proposed or passed. We should remember that, apart from the right to bully the secretary-general into firing staff who resist U.S. pressure, when Washington calls for U.N. reforms the most consistent reform they want is the disbanding of the programs for the Palestinians, and the cessation of resolutions about Israel and Palestine. That was the original cause for the congressional campaign against the U.N., and still remains one of its more potent dynamics.

Of course, if they want to stop such resolutions, the best thing they could do would be stop their friends in Israel from breaking international law, as Palestinian Foreign Minister Nasser El-Qidwa pointed out when he returned to his old haunts. However, it is not really a message that the notoriously insensitive antennae in Washington are tuned to pick up.

Ian Williams is a free-lance journalist based at the United Nations.