Thu, Sep 08, 2005 - Page 7 News List

Rebuke awaits UN head Annan over aid debacle

REPORT An inquiry into the UN's oil-for-food aid plan for Iraq will carpet the secretary-general and the UN Security Council for corruption and waste


The UN Security Council and UN Secretary-General Kofi Annan will both face sharp criticism for allowing corruption and waste to overwhelm the Iraq oil-for-food program, according to a probe of the US$64 billion operation.

The Independent Inquiry Committee's report, which was to be released yesterday, will fault UN management for allowing former Iraqi president Saddam Hussein to manipulate the program.

The committee, led by former US Federal Reserve chairman Paul Volcker, calls for widespread reform to take on such tasks in the future. It questions whether the UN is even capable of running such massive operations.

"Neither the Security Council nor the Secretariat leadership was clearly in command," the preface to the report said. "When things went awry -- and they surely did -- when troublesome conflicts arose between political objectives and administrative effectiveness, decisions were delayed, bungled or simply shunned."

The preface called for four central reforms, including the creation of a chief operating officer at the UN. The UN General Assembly should demand that the changes go into force no later than a year from now, the preface said.

Annan's failure to properly manage the US$64 billion program will be a central focus, but there is no new "smoking gun" linking him to an oil-for-food contract awarded to a Swiss company that employed his son Kojo, said one official with knowledge of the final report.

Meanwhile, the Italian business newspaper Il Sole 24 Ore and the London-based Financial Times were to report in their editions yesterday that Kojo Annan received more than US$750,000 from oil-trading companies being scrutinized by oil-for-food investigators.

The papers said the payments appeared to be linked to oil deals in West Africa. Kojo Annan's lawyer, Clarissa Amato, denied the payments were connected to oil-for-food, but said Annan was a director of a Nigerian company called Petroleum Projects International.

The Independent Inquiry Committee's report will say the oil-for-food program succeeded in providing minimal standards of nutrition and healthcare for millions of Iraqis trying to cope with tough UN sanctions imposed after Saddam's 1990 invasion of Kuwait.

The program let the Iraqi government sell limited -- and eventually unlimited -- amounts of oil, primarily to buy humanitarian goods. But Saddam chose the buyers of Iraqi oil and the sellers of humanitarian goods.

In a bid to curry favor and end sanctions, Saddam allegedly gave former officials, activists, journalists and UN officials vouchers for oil to be resold at a profit.

Volcker's team plans to release a last follow-up report next month that will focus on the companies that did work under oil-for-food. The preface said that "the wholesale corruption" in the program had less to do with the UN itself than these companies, which were manipulated by Saddam.

While the final report is expected to focus on UN problems, officials said it will assign blame more directly. Russia and France, whose companies had major oil-for-food contracts and were considered friendly to Iraq, will come under scrutiny, as will former UN secretary-general Boutros Boutros-Ghali.

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