Problems at the UN

Kofi Annan was "shocked" that there was "unethical behaviour" in the UN's Oil-For-Food scam. The naviety is laughable. Anyway, Paul Volcker's initial report is out, and it concludes the blatantly obvious:

The man in charge of the-oil-for food program for the United Nations made illicit oil deals with Iraq and "violated standards of integrity," according to an initial investigative report released Thursday.

According to investigating commission chairman Paul Volcker, the probe showed that between 1998 and 2001, Benon Sevan "repeatedly solicited," on behalf of a company called African Middle East Petroleum, several million barrels of oil worth about $1 million.

Sevan denied the allegations late Thursday afternoon.

A "definitive report" is due by mid-summer, and that report also will look at the role of U.N. Secretary-General Kofi Annan and his son, Kojo. The son worked in the 1990s for Cotecna, a Swiss firm that won a contract to authenticate U.N.-approved shipments entering Iraq.
So Sevan will be the fall guy, as Friends Of Saddam points out. Buried in the article was this:

U.S. investigators have said Iraq's government took in about $21 billion by circumventing the sanctions imposed on Iraq after its invasion of Kuwait in 1991. U.S. congressional committees also are investigating the issue.
The AP has more:

Volcker said the major source of illicit funds to Iraq was from smuggling, to Jordan, to Turkey, eventually to Syria, and then to Egypt. What isn't clear is how much those involved in the oil-for-food program pocketed, he said.

But he confirmed an estimate in an October report by top U.S. arms inspector Charles Duelfer that Saddam made $228 million in surcharges on oil. However, he questioned Duelfer's estimate that Saddam's kickbacks totaled $1.5 billion, saying they could have been as high as $2.5 billion.
Remember that this is just an initial report, and there's certain to be a lot more to come - or at least there should be.

It appears that there has been serious conflict of interests regarding Volcker's appointment - he's quite closely tied into pro-UN and Oil-For-Food organisations, as you can see for yourself with this Fox News report [.wmv video file, 4.73mb - via Pull On Superman's Cape].

So the person giving the report on corruption in the UN was a director (up until 2003-2004) of the UNA-USA Business Council (whose role is to portray the UN positively). UNA-USA is funded by BNP - with more than US$100,000 in donations alone in 2002 and 2003 - and BNP is the bank that handled all the Oil-For-Food transactions. UNA-USA have called the Oil-For-Food investigations "politically motivated attacks" and have defended the Oil-For-Food program and all involved in it. Next link?

Volcker is a paid advisor to the Power Corporation of Canada, owned by a friend of Volcker's that has close ties to BNP and is the leading shareholder in the Total group - a French oil giant that did US$1.75-2 billion worth of oil from Oil-For-Food - who were in direct discussions with Saddam Hussein and had contracts worth "tens of billions" through Oil-For-Food. Next link?

KPMG are an accounting firm that do the books for Total. KPMG did an audit into the Oil-For-Food program in the late 90's, and another one in 2004. KPMG merged with a company that hired Volcker during a public meltdown - a move which Volcker supported.

And he's able to get away with this because Kofi Annan, upon hiring Paul Volcker to do this investigation, didn't obey UN Staff Regulations which would require him to "file financial disclosure statements upon appointment". He also didn't obey the "basic rights and duties of staff members" which requires him to voluntarily disclose any potential conflicts of interest.

Volcker has not done any of this, and thus cannot - under UN regulations - be hired to complete the report into the biggest corruption in the UN's history. Not surprisingly, the UN's biography of Volcker doesn't mention this. Kofi Annan's technically illegal hiring of Volcker shows two problems with the UN:

1. They deliberately don't follow their own regulations and safeguards; (which almost certainly leads to...)
2. They don't want to expose the full extent of their own corruption.

Does this explain why US$9 billion in Oil-For-Food money is still unaccounted for? Or why an estimated US$17.3 billion was pilfered under Kofi's watch? Of course not. But maybe it explains why after two months, Volcker's investigation had barely gone anywhere. It's going to require a seriously strong investigation from someone whose conflicts of interest won't prevent the report from totally exposing the full extent of corruption at the UN. If the world body wants to regain credibility with the people its ineptitude, corruption and inactivity have affected, it's going to have to do better than hiring someone like Volcker.

(Cross-posted to The House Of Wheels.)

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