Volcker versus Capitol Hill?

When former Federal Reserve Board Chairman Paul Volcker visited Capitol Hill last week to discuss his investigation of the U.N. Oil for Food program, he came with a message: Congress needs to tread softly in its probe of the scandal, lest it undercut the ability of his U.N.-backed investigation to achieve progress.

A bipartisan group of lawmakers — ranging from the conservative Nevada Republican Sen. John Ensign to liberal Michigan Democratic Sen. Carl Levin — politely but firmly responded that they intend to go forward with their investigation.

The senators are absolutely correct to stand firm. For one thing, it is highly unlikely that U.N. Secretary-General Kofi Annan ever would have agreed to appoint Mr. Volcker to conduct his investigation if it hadn’t been for the pressure from Capitol Hill. But Mr. Volcker still has his doubts. He is particularly concerned about the work of the Senate Permanent Subcommittee on Investigations, headed by Sen. Norm Coleman, Minnesota Republican, which has subpoenaed BNP Paribas, a French bank that has handled billions worth of Oil for Food revenues.

Last week, Mr. Volcker discussed the situation with Messrs. Ensign, Coleman and Levin, along with Republican Sens. Lindsey Graham of South Carolina and Mike Enzi of Wyoming and Democratic Sen Evan Bayh of Indiana. Mr. Volcker expressed concern that the Senate investigation could result in the release of information that could interfere with his own probe. He also indicated reluctance to give Congress access to documents related to the Oil for Food scandal and emphasized the importance of making clear to the rest of the world that the Oil for Food probe is not an American investigation, Mr. Ensign recounted.

Mr. Ensign replied that, given the lack of credibility that the United Nations has with the American public, it would be disastrous for the world body if Congress were prevented from going forward with comprehensive investigations of its own. “If we don’t investigate and hold people accountable, anything like the Oil for Food program … will have trouble going forward” in the event of future humanitarian crises, the Nevada Republican told Mr. Volcker. Mr. Ensign emphasizes that there was no difference between Mr. Levin and the conservative Republicans on these questions during the meeting with Mr. Volcker. Messrs. Ensign and Graham added that the Michigan Democrat was very forceful in emphasizing the need for Congress to conduct its investigation and to get to the bottom of the scandal.

For his part, Mr. Graham, a member of the Senate Armed Services Committee, told The Washington Times that the investigation Mr. Volcker has in mind is different from the kind envisioned by Senate Republicans. The Volcker investigation will focus on whether U.N. officials violated U.N. rules and stole funds from donor states and the Iraqi people. Mr. Graham correctly points out that congressional investigations should have a different emphasis from the Volcker probe — specifically, what can be done in the future to prevent enemies of this country like Saddam Hussein from manipulating programs like Oil for Food in order to subvert American foreign policy interests.

We admire Mr. Volcker and know that he will do everything possible to unearth corruption in the Oil for Food program. But he would be best served by working cooperatively with Capitol Hill — not by trying to freeze lawmakers out.