- The Washington Times - Thursday, March 3, 2005

Kofi Annan has committed himself and the United Nations to the principle that anyone who violated the law to make money off Iraqi sanctions should be punished. But to leave the United Nations Oil-for-Food scandal as an internal personnel issue is far too passive a response. The United Nations should take advantage of new tools to combat corruption and money laundering that it has championed and use them against everyone who has abused its institutions and injured its reputation.

The interim report on the scandal — released in February by the independent inquiry chaired by former Federal Reserve Chairman Paul Volcker — makes it clear enough that senior career U.N. officials took advantage of the program to line their own pockets. The former chief of the Oil-for-Food Program and another senior U.N. official have now been suspended and await the prospect of further punishment at the conclusion of a formal U.N. hearing process.

But the United Nations would be missing a huge opportunity if it merely lets the wheels of bureaucratic justice slowly grind against alleged internal wrongdoers. The United Nations hired private companies — including a bank, an oil inspector and a goods inspector — who each had contractual obligations to the United Nations to prevent corruption relating to funds, oil and humanitarian goods.

Mr. Annan could simultaneously protect his own reputation and restore that of the United Nations by using the world’s new laws against corruption and money laundering as a sword against anyone whether U.N. official or private-sector firm — who violated their obligations to the United Nations on the Iraqi program.

The United Nations could begin by announcing it will take legal action to recover assets from anyone who violated legal responsibilities related to the program. Those assets are ill-gotten gains, the proceeds of corruption or sanctions-busting. They are subject to national anti-corruption and money laundering laws on a nearly universal basis. Companies that violated U.N. contracts through illicit or corrupt activity relating to Iraq should be forced to pay damages. Companies hired by the United Nations to oversee the program that failed to detect wrongdoing should also be forced to compensate the United Nations for their negligence.

Mr. Annan should engage a top-notch international legal team with the mission of transforming the facts uncovered by the Volcker inquiry into evidence that allows the United Nations to head straight to the civil courts to file lawsuits against each of the wrongdoers, asking judges to freeze their assets.

Then the United Nations should approach the banks handling the funds of any such persons or businesses no matter where the funds are located. No financial institution is permitted to hold or process the proceeds of corruption or sanctions-busting. Standards against doing so are now globalized, the result of years of work by the United Nations among many others. Once the United Nations has alerted a bank that it may be holding the proceeds of criminal activity, that bank must carry out its own investigation to meet regulatory requirements, notify its national regulator and report the funds as suspicious. Such a report in turn could prompt official action on the part of the government involved to freeze them — whether they happen to be located in Amman, Beirut, Panama, Curacao, Jersey, New York, or Nicosia — each of which is financially linked to the scandal.

The United Nations can also directly leverage investigations by immediately providing information from the Volcker inquiry and its own files to investigators in relevant member states. The U.S. Department of Justice has an active investigation of some of the illegalities — and other countries should too. Such investigations will help the United Nations to clean house as well as ensure that it is not blamed alone for culpability that is spread far, far wider.

Finally, the United Nations should put information about the investigations online. Here, it should not limit itself to publishing finished reports. As investigations permit, it should make the raw data of interviews, depositions, and exhibits widely available. The Volcker inquiry interim report called for more oversight and transparency in the administration of U.N. funds and programs. There is no better way of increasing oversight and transparency than putting information online. And that should include the details of what went wrong here.

By using a mixture of contract law, and the international standards long endorsed by the United Nations that make it unlawful to retain the proceeds of corruption and sanctions violations, treating them as violations of money laundering laws, the United Nations can punish wrongdoers, restore funds improperly taken from the United Nations as an institution, deter bad behavior in the future, and put itself on the road to strengthening its own institutional reputation — even as it demonstrates once again the power of rule of law.

Jonathan M. Winer, a partner at Alston & Bird LLP in Washington, served as deputy assistant secretary of state for international law enforcement from 1994 through 1999.

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