NEW YORK — More than $1 billion collected by the United Nations as its commission on Iraq’s oil-for-food program has become a new focus for the inquiry into the biggest scandal ever to engulf the organization.
At least $1.1 billion was paid directly into U.N. coffers to cover the cost of administering the $67 billion plan to provide food and medicine to Iraqis.
Various investigations have until now focused on that part of the $67 billion that was diverted by since-ousted Iraqi dictator Saddam Hussein to build palaces and to bribe foreign governments and prominent overseas supporters.
But Claude Hankes-Drielsma, a management consultant and adviser to the Iraqi Governing Council who testified to the U.S. House Government Reform Committee last week, said that tracking what happened to the fees levied by the United Nations was a “key” to untangling the scandal.
Sources said U.N. officials are being asked to provide detailed accounts of how the organization’s slice of Saddam’s oil money was used and how much went to companies that were supposed to monitor the food and medicine imported by Iraq.
Although the U.N. Security Council approved the plan to levy a 2.2 percent commission on each oil-for-food transaction, the huge sums this reaped for the United Nations have never been fully accounted for.
A senior U.N. official who is closely involved in uncovering evidence of the scandal said: “The U.N. was not doing this work just for the good of Iraq. Cash from Saddam’s government was keeping the U.N. going for a few years.
“No one knows exactly what sums were involved because an audit has never been done. That is why they are wriggling and squirming now in New York.”
Mr. Hankes-Drielsma, a close associate of Iraqi Governing Council member Ahmed Chalabi, has played a pivotal role in bringing the scandal to light by challenging the United Nations with paperwork discovered in Baghdad files.
“What the U.N. did with these administration fees is a pointer to corruption on a scale never seen before,” Mr. Hankes-Drielsma said. “This program was meant to be helping the Iraqi people, but was used by the U.N. for its own ends. There are so many different facets to this greatest scam in U.N. history.”
The new line of inquiry comes after Paul Volcker, the former chairman of the U.S. Federal Reserve, agreed to head the U.N. investigation. He announced last week that he was hiring a team of accountants, money-laundering specialists and lawyers to check thousands of contracts authorized by the United Nations.
The head of the oil-for-food program, U.N. Deputy Secretary-General Benon Sevan, is among those whose names have appeared on a list of 270 individuals and companies who were granted vouchers for the purchase of Iraqi oil by Saddam. Mr Sevan has denied accusations of any wrongdoing.
Investigators are also looking into companies that supplied overvalued goods to Iraq under the oil-for-food program and then paid a kickback to Saddam’s regime, providing it with highly prized hard currency.
Thousands of tons of food delivered under the U.N. program were later revealed to have been rotten, and much of the medicine — particularly that imported from Russia — was found to be out of date.
Mr. Volcker’s inquiry has the Security Council’s backing, but has no power to compel witnesses to testify and will depend on cooperation from foreign governments, U.N. staff and former members of Saddam’s regime.
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