A biting UN report on the manipulation of the oil-for-food programme may be a cover-up for a much bigger problem, reports Serene Assir Paul Volcker, head of the United Nations independent enquiry investigating problems of corruption surrounding the oil-for-food programme, issued his fifth and final report this week. In the report, he claims 2,200 international firms contributed to corrupting the UN programme, as well as supporting Saddam Hussein's regime, by paying unaccounted surcharges -- which allegedly went straight into the pockets of the leadership -- in order to do oil business with Iraq. In addition, he accuses a large number of firms and political figures of having received oil allocations, essentially as bribes, in order to work to restore the international community's trust in the Saddam regime and end sanctions. The report, which cost the UN $35 million to complete, details how Saddam received up to $1.8 billion in illicit payments from companies from across the globe, including the construction arm of the firm Volvo, vehicle manufacturers Daimler-Chrysler and Daewoo, US oil company Bayoil and German electronics manufacturer Siemens. It also charges various high-profile figures of benefiting directly from manipulation of the programme. Among those accused are former French Interior Minister and current Senator Charles Pasqua, British MP, anti-war activist and opposer of sanctions George Galloway, and former director of the oil-for-food programme Benon Sevan. Accused of taking $147,000 in illicit payments, Sevan has denied any misdemeanour. Similarly, Pasqua denied the allegation that he received 11 million barrels of oil allocation, adding that he believed the claim showed that the US is keen on implicating France, while Galloway told reporters there was "a witch hunt going on". Volcker's enquiry also implicated Russian officials, saying that former Kremlin chief of staff and current chairman of the state electricity service, Alexander Voloshin, received allocations of 4.3 million barrels of oil, according to Iraqi Oil Ministry documents. According to the Associated Press, Russian Foreign Ministry officials have succeeded in confirming that Voloshin's signature on the documents was forged. Other companies, including the Australian Wheat Board, said that if any illicit payments were made, its management was not aware of it at the time. Several implicated companies explained that they were simply informed by Iraqi business counterparts of having to pay a surcharge in order to carry out a particular transaction, and that they complied in the belief that this was due process. Under the UN programme, which was set up in 1996 in order to ease the severe crisis that had struck Iraq since the imposition of UN sanctions in 1991, Iraq was allowed to export oil via 4,500 firms registered with the programme, with the proceeds channelled towards humanitarian supplies. Shortly after the US-UK-led invasion of Iraq in 2003, the programme was abandoned, creating new severe problems for the 85 per cent of Iraqis who had become dependent on the programme, despite its shortcomings. As well as drawing much controversy -- in particular surrounding the various political figures in question -- the report also led to promises by various governments to prosecute implicated entities. Switzerland, for example, has pledged to investigate four officials and has fined an unnamed company $40,000 for the involvement in paying the Iraqi government surcharges in order to secure cut price deals on oil. Similarly, France is currently investigating 10 officials. But the most vehement accusations that Volcker made were reserved for the UN Secretariat and the management of the programme itself. The report blames the UN for mismanagement, internal division, corruption and for allowing for the politicisation of the oil-for-food programme. Such corruption by multinational companies, officials and the former Iraqi regime itself could have been avoided "if there had been more disciplined management by the UN and its agencies", Volcker said. The controversies raised by Volcker foreshadow suspicions held about the UN generally, and in particular its efficacy under the management of current Secretary-General Kofi Annan. Some feel that this, not the kickbacks to Hussein, constitutes the main target of the enquiry. Speaking to Al-Ahram Weekly, former UN assistant secretary-general and former director of the oil-for-food programme Denis Halliday said that Volcker's enquiry was definitely "politically motivated by Annan who knew that he had problems" regarding the oil-for-food programme. "Rather than give anyone else the possibility of accusing him of mismanagement, he pleaded mea culpa first." Halliday resigned from the UN over, in his words, "the appalling impact of the sanctions", for which he could not find any "legitimate justification". After he issued a statement to the Volcker enquiry which accuses the investigations of being "off-target", Halliday went on to say that "the permanent member states of the Security Council are the real culprits" of the disastrous situation that Iraqis found themselves in throughout the sanctions era. "They designed the programme, they imposed the constraints; they were the real killers of Iraqi children and adults." In his statement to Volcker, Halliday said the enquiry "has diverted attention away from genuine scandals of size and significance, and neglected breeches of international law by UN Security Council member states in connection with UN aggression on Iraq, UN sanctions on Iraq and the corruption and abuse of the oil-for-food programme." In other words, although the report succeeded in exposing corruption, it failed to expose the fact that all companies were, in one way or another, vetted by members of the Security Council to do business in Iraq. Further, "the $1.8 billion to which Volcker refers is outside of the programme and additional to the $65 billion that went through the UN. You could argue Baghdad did not diminish the programme per se by these means." Halliday also notes that exports and revenues directly approved by Washington and London do not receive mention in the enquiry's investigation. Hans Von-Sponeck, Halliday's successor, who also resigned over the sanctions regime and the oil-for-food programme, concurs. "I would blame the UN Security Council for having kept in place a sanctions structure which could not or did not want to prevent illegality on the part of the Iraqi regime," he told the Weekly. While describing the enquiry as necessary, Von-Sponeck added, "the report does not scrutinise the shortcomings of the Security Council as it does the shortcomings of the UN Secretariat. This is most unfortunate as it was the Security Council which had the oversight mandate." Von-Sponeck also explained that the scope of the report ends before the termination of the oil-for-food programme, conspicuously leaving out the entirety of the first few months of the US-UK-led occupation, during which the programme was still extant but suffering from its worst problems since its launch. The report fails, therefore, to mention the $8.8 billion funnelled to the Provisional Occupation Authority in Iraq from the UN under the oil-for-food programme, which to date remain unaccounted for. As to the timing of the report, some believe that a smokescreen is being established to shield not only the Security Council, which was allegedly complicit with the oil-for-food scandal, but the US government, mired in its own domestic and international problems. "I sense Annan was pushed by Washington to have Volcker do public, media-conspicuous, work in order to divert attention from the mess in the US capital with regard to the criminal invasion and occupation of Iraq. Meantime, several Congressional committees are working on studies of US scandals linked to the UN oil-for-food programme -- I have met two committees myself," Halliday told the Weekly. One million people died in Iraq during the 12-year long sanctions regime, many of them children. Most deaths were caused by acute malnutrition and diseases which could have been prevented or cured with the appropriate import of basic medicines, many of which were infamously banned because of "dual use" restrictions backed by claims that the Saddam regime could use ordinary commodities in the manufacture of weapons of mass destruction. "A sad story," Halliday told the Weekly. "A black time for the UN."
