Monday, April 19, 2004

NEW YORK — Russia dropped its opposition yesterday to a U.N. resolution endorsing an investigation of the U.N. oil-for-food program for Iraq, clearing the way for former Federal Reserve Chairman Paul Volcker to take charge of the inquiry.

U.S. lawmakers have said the U.N.-run program allowed billions of dollars in illegal oil revenue to flow to Saddam Hussein. Critics have said Saddam for years manipulated the program through illegal surcharges, kickbacks and illegal oil shipments.

With the exception of Russia, Security Council members had been prepared to endorse an inquiry into accusations of corruption in the U.N. humanitarian program and to call for countries and companies to cooperate.

“There will be a resolution,” Russia’s deputy U.N. ambassador, Gennady Gatilov, said, dropping his objection and adding that Security Council experts were working on a text.

Russian companies will undoubtedly come under scrutiny in any investigation because they were major buyers of Iraqi oil and suppliers of humanitarian goods to the program, which allowed Saddam’s regime to sell oil and use the money to buy humanitarian goods and pay reparations to victims of the 1991 Gulf war.

The United Nations confirmed Friday that Mr. Volcker and two others were prepared to serve on the panel investigating the charges but indicated “that a Security Council resolution would be extremely helpful for the work of the inquiry.”

Diplomats said Mr. Volcker insisted on the resolution, apparently because the investigation will include the U.N. Secretariat, headed by Secretary-General Kofi Annan, as well as dealings with governments and companies. Mr. Volcker has refused to comment on the panel.

Mr. Gatilov said Friday that Russia believed a council statement on March 31 pledging cooperation with the inquiry was sufficient support for the panel. He said Russia didn’t want “to look backwards into the history, and to stir up the old issue of the humanitarian program, which is closed.”

But the Russians apparently changed their mind after Mr. Annan spoke to Russian Foreign Minister Sergey Lavrov on Saturday and after extensive consultations by Germany’s U.N. ambassador, Gunter Pleuger, the current council president.

“We are in a good way,” Mr. Pleuger told reporters yesterday, saying he hoped to have a draft resolution soon.

U.S. Deputy Ambassador James Cunningham was also optimistic.

“There’ll be a resolution,” he said. “I think there’s agreement in principle to go ahead with a statement of support by the council for the investigation, and for cooperation with the investigation.”

Under the oil-for-food program, which began in December 1996 and ended in November, the former Iraqi regime could sell unlimited quantities of oil, provided the money went primarily to buy humanitarian goods and pay reparations to victims of the 1991 Gulf war.

Saddam’s government decided on the goods it wanted, who should provide them and who could buy Iraqi oil — but a U.N. committee monitored the contracts.

The complaints of corruption surfaced last January in the Iraqi newspaper Al-Mada. It included a list of about 270 former government officials, activists and journalists from more than 46 countries suspected of profiting from Iraqi oil sales that were part of the U.N. program.

Mr. Annan opened an internal inquiry into the accusations in February but canceled it in March to allow a broader, independent examination that will also cover dealings with governments as well as companies and other entities that signed contracts with the United Nations or with Iraq.

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