Thursday, October 21, 2004

U.N. Secretary-General Kofi Annan said yesterday the world body’s reputation had been damaged by a furor over its oil-for-food program in Iraq, as investigators released the fullest accounting to date of the scandal-plagued program.

Russian and French companies were the most active buyers and sellers under the program, according to figures released yesterday by an independent U.N. investigating panel headed by former Federal Reserve Chairman Paul Volcker.

“There is no doubt that the constant campaign and discussions [over the scandal] have hurt the U.N.,” said Mr. Annan, who was given a private briefing in New York by Mr. Volcker. “That’s why we want to get to the bottom of it and clear it as quickly as possible. It has done damage, yes.”

In the most comprehensive survey to date, Mr. Volcker’s panel released a list of some 248 companies that bought Iraqi oil and another 3,545 firms that sold food, medical supplies and other humanitarian goods to Saddam Hussein’s regime under the seven-year program that closed in 2003.

The U.N. program was set up to allow Saddam’s regime, laboring under heavy international sanctions, to use oil sales to buy a tightly restricted list of food and humanitarian supplies.

But a U.S. Government Accountability Office study this summer estimated that Saddam stole more than $10 billion through illegal oil sales and kickbacks under the program, with companies, government officials and even a senior U.N. official accused of accepting bribes and other favors.

Mr. Volcker, who met separately with reporters in New York, said yesterday’s 300-page listing of all known oil-for-food contractors was not meant to imply guilt or to identify abuses of the program.

“This was not a report on what went wrong and is not a report on what went right,” he said. “That is our mission but that is not what we are reporting today.”

The Volcker panel, in a statement released yesterday, said the new report does not address widespread charges of oil smuggling and deals cut by Saddam with foreign vendors outside the oil-for-food framework.

Investigators are “concerned with determining the extent to which smuggling was known to the members of the Security Council, other U.N. authorities and U.N. contractors,” it said.

In his report to Congress earlier this month, the CIA’s chief weapons inspector for Iraq, Charles A. Duelfer, said Saddam systematically undermined the purpose of the oil-for-food program to acquire banned goods and curry international favor to end sanctions.

Particularly targeted, Mr. Duelfer said, were companies and prominent officials in Russia, France and China, all with vetoes on the U.N. Security Council.

According to the new figures, Russian companies purchased $19.2 billion in Iraqi oil under the program, while Russian vendors received $3.3 billion in humanitarian contracts. French energy interests bought just under $4.4 billion in oil and French contractors received $2.9 billion in humanitarian aid sales.

The United States, bitterly hostile to Saddam’s regime throughout the period of the program, was a relatively minor player, according to Mr. Volcker’s figures.

Just four U.S. oil firms are listed in the U.N. data — Chevron, Texaco, Phoenix International and Mobil Export Corp. — and the United States ranked 26th out of the 64 countries who sold goods to Iraq under the program.

The merged ChevronTexaco and Exxon Mobil Corp., the successor company to Mobil Export, have been subpoenaed by the Manhattan U.S. Attorney’s office for a grand jury investigation into the oil-for-food scandal.

The 19 American firms listed as selling food, medical stock and other humanitarian aid ranged from grain giant Cargill to an Oakland, Calif., contractor specializing in ventilation systems for medical facilities.

At least four congressional committees and three U.S. federal probes are looking into aspects of the troubled program.

Mr. Volcker told reporters that BNP Paribas, the French bank used for oil-for-food transactions, had been cooperating only “up to a point” with his investigators, though he expected any obstacles to be resolved.

“We’re entitled to have the information, and I think we’re going to get it, but it hasn’t been volunteered quite as rapidly as we might have wished,” Mr. Volcker said. The French bank said it was cooperating with investigators.

Mr. Annan said he did not believe governments such as France and Russia had been influenced by suspected kickbacks from Saddam from the oil-for-food program.

Critics say Mr. Annan, whose son worked for a Swiss contractor that helped monitor the oil-for-food program, has yet to acknowledge the conflicts of interest in the oil-for-food probe.

Nile Gardiner, a policy analyst at the Heritage Foundation, said Mr. Annan’s blanket dismissal of the charges of influence-buying “undermines his credibility and impartiality.”

“Kofi Annan cannot be seen as an impartial figure with regard to this program,” Mr. Gardiner said. “It is in the interest of the U.N. as an institution that he step aside from his duties while this investigation is under way.”

The secretary-general yesterday said that France and Russia did not oppose the U.S.-led war in Iraq to protect their business interests.

“If governments were to sell their votes because some of their companies … were to do business with Iraq or elsewhere, I think it would be a very sad state for the Security Council and for the world. I do not believe it,” Mr. Annan said.

• This article is based in part on wire service reports.

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