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Jewish World Review April 20, 2004 / 30 Nissan, 5764

Mort Zuckerman

Mort Zuckerman
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A tangled web, unraveled: How a critical aid program for Iraq was undermined by greed and cynical insider deals

http://www.NewsAndOpinion.com | The prospects of the United Nations taking over the transition in Iraq may now be fatally compromised. The world body is caught up in a welter of allegations and evidence suggesting strongly that a noble effort of humanitarian assistance was tainted by greed, bribery, and the most venal kind of power politics. The U.N. was supposed to oversee the oil-for-food program that allowed Saddam Hussein to sell oil and use the proceeds to buy essential food and medicine for the Iraqi people. At least $10 billion, evidently, went into the pockets of political operators.


It is a tribute to the new American-installed democracy in Iraq that an Iraqi newspaper has been in the forefront of exposing the racket and naming the 270 international power brokers who seem to have had their hands in the till. Here's how the scam allegedly worked: Saddam sold oil to his friends and allies around the world at deep discounts. The buyers resold the oil at huge profits. Saddam then got kickbacks of 10 percent from both the oil traders and the suppliers of humanitarian goods. Iraqi bean counters, fortunately, kept meticulous records.


Coincidence. If you wondered why the French were so hostile to America's approach to Iraq and even opposed to ending the sanctions after the 1991 Gulf War, here's one possible explanation: French oil traders got 165 million barrels of Iraqi crude at cut-rate prices. The CEO of one French company, SOCO International, got vouchers for 36 million barrels of Iraqi oil. Was it just a coincidence that the man is a close political and financial supporter of President Jacques Chirac? Or that a former minister of the interior, Charles Pasqua, allegedly received 12 million barrels from Baghdad? Or that a former French ambassador to the U.N., Jean-Bernard Merimee, received an allocation of 11 million barrels? Perhaps it was just happenstance, too, that a French bank with close ties to then French President François Mitterrand and one of the bank's big shareholders who is close to Saddam became the main conduit for the bulk of the $67 billion in proceeds from the oil-for-food program. All told, 42 French companies and individuals got a piece of this lucrative trade. No matter how cynical you may be, it's sometimes just plain hard to keep up with the French.


But they're not alone. Russians received more than 2.5 billion barrels of the cut-rate crude. Some 1.4 billion barrels went to the Russian state. Not to be left out of the feeding frenzy, even the U.N. got in on the action. It received administrative fees of about $2 billion for the program, which may be fair, but the senior U.N. official in charge of the program, Benon Sevan, is reported to have received 11.5 million barrels himself. Cotecna, a Swiss-based firm hired by the U.N. to monitor the import of the food and medicine to Iraq, hired Kojo Annan, the son of U.N. Secretary General Kofi Annan, as a consultant during the period when the company was assembling and submitting bids for the oil-for-food program. All of these coincidences were reported by Claudia Rosett in the National Review. None, surprisingly, were disclosed by the U.N., Cotecna, or the senior or junior Annan. The imposition of so-called smart sanctions on Iraq, several years after the end of the 1991 Gulf War, allowed Saddam to purchase items besides food and medicine. But some of the things approved by Kofi Annan seem pretty far afield. There was the $20 million he authorized for an Olympic sports city for Uday Hussein, Saddam's reprehensible (and now deceased) oldest son. And then there was the $50 million for TV and radio equipment for Saddam's ham-handed propaganda machine. This is food? Gives new meaning to Kofi Annan's statement, in 1998, that Saddam was a man "I can do business with." And how.

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All of this would seem to raise a few questions about the intense opposition to the American intervention in Iraq within the U.N. Security Council, and particularly from Paris and Moscow. In one way or another, the U.N. stonewalled, until now, a serious independent investigation of the oil-for-food program. To his credit, Kofi Annan is now supporting such an investigation, but the Security Council has not approved it, and France and Russia--surprise!--are actively blocking it. Former Federal Reserve Chairman Paul Volcker has agreed to head the inquiry, but only if it is blessed by a Security Council vote. Absent such a vote, there is still an awful lot of explaining to be done.


Will the investigation be whitewashed to preserve the U.N.'s reputation so that it can replace the CPA in Iraq, or will the investigation get to the bottom of this ugly mess? Fortunately, Congress is going to conduct its own hearings on the largest public financial scandal in history--and the disgraceful insiders' game played at the U.N.

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JWR contributor Mort Zuckerman is editor-in-chief and publisher of U.S. News and World Report. Send your comments to him by clicking here.

Up


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04/11/04: Getting real about gas prices
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02/10/04: Fixing what's broken
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11/25/03: Slowly but surely in Iraq
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10/29/03: Graffiti On History's Walls
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01/24/03: Midnight for Baghdad
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© 2001, Mortimer Zuckerman