- The Washington Times - Thursday, February 3, 2005

Congressional staffers investigating the U.N. oil-for-food scandal say they are worried that the interim Volcker report expected today will leave unanswered key questions, such as the role of the U.N. official who ran the program.

Parallel to the work of the panel headed by former Federal Reserve Chairman Paul Volcker, Congress last month created a subcommittee on investigations, in large part to keep an eye on the United Nations.

However, the Associated Press reported last night that a source close to the probe said Mr. Volcker will be sharply critical of U.N. management in key areas and will target Benon Sevan, the U.N. official who ran the program.

The source said the Volcker report will focus on the administration, financial transactions and internal auditing of the multibillion-dollar program, all of which were “tainted badly.”

In an advance copy of an op-ed article in today’s Wall Street Journal, Mr. Volcker said, “The findings do not make for pleasant reading,” according to AP.

Staffers said earlier this week that they have a growing list of questions regarding the seven-year, $64 billion humanitarian program for Iraq, and they hope that today’s interim report will answer some of them.

But some said they were not optimistic that the report would illuminate the role of Mr. Sevan, who is accused of accepting oil vouchers from the former regime, or the role of contractors responsible for inspecting imports and exports and providing letters of credit.

Expectations also are lowered, according to a Democratic staffer, by the fact that the Volcker panel has no subpoena power and no way to compel corporations or governments to cooperate.

“I hope it’s not going to be a situation where he tells us what we already know,” said one staffer. “The more troubling thing would be if he just doesn’t address certain issues that he doesn’t have answers for, because he couldn’t get U.N. people to answer his questions.”

There is concern that Mr. Volcker will put much of the blame for oil surcharges and contract kickbacks on the U.N. Security Council, where the United States actively vetted every transaction.

Side deals appear to have generated at least $6.5 billion for former Iraqi leader Saddam Hussein, and oil smuggling might have brought him twice that much.

“If [Mr. Volcker] points a finger at the U.S. and the Council, that’s something we’ll look into, we’ll deal with it,” said one Republican staffer. “But that is not where he should be concentrating.”

Mr. Volcker, who heads a 60-member Independent Inquiry Commission, downplayed expectations for today’s interim report in a Jan. 6 interview with the New York Times, saying there would be no “flaming red flags.” The remark was repeated across Capitol Hill this week, often with incredulity.

“How can he say that?” asked one House staffer, who spoke on the condition of anonymity. “If you read those [U.N. Office of Internal Oversight Services] reports, it’s just a forest of red flags out there.”

Last month, the Volcker panel released 58 internal audits undertaken by the U.N. Inspector General’s Office outlining count after count of mismanagement and petty theft, but no large-scale corruption.

The oil-for-food program is seen by many on Capitol Hill as a microcosm of the things they distrust about the United Nations.

“The U.N. is operating without any sense of accountability,” one Republican staffer said. “It’s almost a turkey shoot, the daily grind of malfeasance.

“It’s a target-rich environment,” he added, explaining why the House International Relations subcommittee on international oversight and investigations was created in January.

The subcommittee, headed by Rep. Dana Rohrabacher, California Republican, will have a budget of about $400,000 and a full-time staff of four or five, according to sources.

The senior members of the IIC are Mr. Volcker, Swiss money-laundering expert Mark Pieth and South African jurist Richard Goldstone, the first prosecutor for the U.N. war-crimes tribunals for Rwanda and the Balkans.

The panel keeps offices near the United Nations and in other countries and has a staff of 60. The $30 million enterprise was funded by the United Nations with money originally earmarked for the administration of the oil-for-food program.

Today’s report will be followed by at least one more, which is expected in the spring.

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