"Saddam's U.N. Payroll
Oil for Food bribery means sanctions against Iraq were doomed to fail.

Thursday, October 28, 2004 12:01 a.m. EDT

Out on the campaign trail, John Kerry continues to diminish our allies in Iraq and decry President Bush for "rushing" to war without U.N. Security Council approval. But we hope his would-be Secretaries of State, Biden and Holbrooke, are paying attention in private to revelations about the crumbling sanctions regime they would have had us continue and the related corruption in the U.N.'s Oil for Food program.

These folks are in for a rude awakening if they really think Old Europe will be rushing to help a President Kerry in Iraq, or that the United Nations is competent and trustworthy enough to manage their foreign policy projects.

The latest pieces of news are last week's data dump from Paul Volcker's U.N.-blessed investigation of Oil for Food, and U.S. weapons inspector Charles Duelfer's report to Congress earlier this month. Everybody is still digesting these massive documents. But the most important conclusion is already clear: Saddam Hussein exploited the program to run the largest bribery scheme in the history of the world.

Yes, we mean that literally. Total turnover between 1996 and 2003 was about $97 billion, or $64.2 billion in oil sales and $32.9 billion worth of food and other "humanitarian" goods. Crucially, Saddam was able to manipulate the program largely because U.N. Secretary-General Kofi Annan--who was given more or less complete discretion to design Oil for Food by the Security Council resolution that created it--allowed him to pick and choose the buyers of his oil and the sellers of the humanitarian goods.

This meant the Iraq dictator could reward his friends and political allies with oil at below market prices and goods contracts at inflated ones. In the middle of the program, he also started demanding kickbacks on the contracts to add to the stream of unmonitored revenue he was already getting from oil smuggling.

It can't be stressed enough that both the Duelfer and Volcker investigations confirm that this global web of corruption is no mere allegation trumped up by Ahmed Chalabi and "neoconservatives," as U.N. officials tried to pretend in January when Iraq's al Mada newspaper published a list of the oil voucher recipients.

Mr. Duelfer's list of recipients--which more or less confirms al Mada's--was compiled based on information from current and former Iraqi officials and lists maintained by former Iraqi Vice President Taha Yasin Ramadan (now in U.S. custody) and the former Iraqi Oil Minister. Mr. Volcker's lists--which include the 248 companies that bought Iraqi oil under the program and the 3,545 companies supplying humanitarian goods--are compiled from the U.N.'s own records and cross-checked against Iraqi and other sources, including the French bank BNP Paribas that administered program revenues.

High-level officials of Saddam's regime have told investigators that oil and goods contracts were always awarded with an eye to helping Saddam politically, particularly to promote the lifting of the sanctions. The Volcker data bears this out. Iraq's top customer was Russia, whose firms bought $19.2 billion worth of Iraq oil and exported $3.3 billion in humanitarian goods. Fellow Security Council member France was a distant but significant second, at $4.4 billion and $2.9 billion respectively. China is also high on the list.

Oil voucher recipients are alleged to include the Russian presidential office, former French Interior Minister Charles Pasqua, and even former Oil for Food program director Benon Sevan of the U.N. Just this week our news side colleagues reported that French authorities have placed under formal investigation a top official of French oil giant Total, for possible misuse of funds including payment of the Iraqi kickbacks. Before the war Total was also openly courting Baghdad for the rights to develop two large Iraqi oil fields."

http://www.opinionjournal.com/editorial/feature.html?id=110005818

JJ