The Wall Street Journal REVIEW & OUTLOOK Oil for Scandal Where's Jesse Helms when the U.N. really needs him? Thursday, March 18, 2004 12:01 a.m. EST
The $100 billion Iraqi Oil for Food program was by far the largest relief operation in the history of the United Nations. By extension, it's rapidly becoming the U.N.'s largest-ever scandal. After months of stonewalling, Secretary General Kofi Annan conceded Tuesday that the program was worthy of an internal investigation. It's a step forward, but it's not nearly enough for an organization that so far has shown it can't be trusted to police itself. That's why the April hearings by Henry Hyde's House Committee on International Relations will be so important. Oil for Food is a legitimate U.S. concern, for reasons that go well beyond the fact that U.S. taxpayers foot about a quarter of the U.N.'s bills. A mountain of evidence has now accumulated to suggest the Iraqi people suffered from shortages of quality food and medicine not because international sanctions were too strict, but because lax or corrupt oversight at U.N. headquarters in New York allowed Saddam Hussein to exploit the system for his own purposes. Those included rewarding friends and allies world-wide with oil allocations on very favorable terms, as well as extracting large kickbacks from oil traders and suppliers of humanitarian goods. Put more simply, Saddam was allowed to skim off revenue to which the relief program was entitled, while the program was forced to spend the remainder on suppliers chosen by Saddam for reasons that rarely had anything to do with the quality of their goods. There can be little doubt that U.N. mismanagement contributed greatly to the negative perception of the anti-Saddam containment policy. There is also little doubt that the reward and kickback scheme--as well the possibility of exposure--was a factor as some countries weighed whether to back U.S.-led regime change in Iraq. There is even reason to suspect that some of the Saddam friends and allies who benefited may have been members of the U.N. Secretariat. Among the names of alleged oil-voucher beneficiaries on the Iraqi Oil Ministry list released in late January is Oil for Food director Benon Sevan. As our Thérèse Raphael reported last week, the Journal has obtained Iraqi correspondence suggesting that at least one oil trade in favor of Mr. Sevan was in fact executed. (He has denied the charges.) Ms. Raphael also reported that the company in charge of inspecting goods destined for Iraq under the program was Cotecna, which employed Mr. Annan's son Kojo. The prima facie evidence of mismanagement alone is strong enough to call into question the remainder of Mr. Annan's tenure, the credibility of the U.N. to advise on the transition to democracy in Iraq, and whether the organization can ever again be trusted with a relief and arms control operation of this scale. Michael Soussan, a former program coordinator with Oil for Food, noted in The Wall Street Journal recently that U.N. officials have not been truthful in their response to the developing scandal, claiming for example that they were unaware of allegations of fraudulent practices until after the war. Oh, really? A January 2001 article in the Times of London was one of a number reporting the "total anarchy" and "flagrant disregard of U.N. Security Council resolutions" that then characterized the program. Another canard being advanced by the U.N. Secretariat is that there should be a new Security Council Resolution--which it would be conveniently difficult to get France and Russia to approve--to enable it to investigate activities beyond those of its own staff. The activities of the U.N.'s own staff are precisely what interests everyone here. Why did they choose to keep most details of the program secret? Why did they never release the results of internal audits? Didn't Mr. Annan take seriously his obligation to approve the details of every six-month phase of the program? Halliburton's oil contracts with Kuwait were the picture of transparency by comparison. It's also worth noting, finally, that there is no obligation for members of the U.N. Secretariat to wait for an investigation. Mr. Sevan has been on vacation pending his retirement next month. If he cares at all for his reputation or the U.N.'s, one would expect him to rush to clear things up. Ditto for Mr. Annan. Assuming the stonewalling continues, the Sevan and Annan issues will be important topics for Mr. Hyde's committee. Congress will also want to explore to what extent, if any, Oil for Food corruption penetrated America. One person to subpoena is Shakir al-Khafaji, an Iraqi-American businessman who appears on the list of alleged oil-voucher recipients and who traded goods extensively with Saddam under Oil for Food via his South African-based Falcon Trading Group. We regret to say that a notable absence from U.N. oversight has been the Senate Foreign Relations Committee, which was an effective advocate of U.N. transparency under Jesse Helms. We hope current Chairman Richard Lugar will hold his own hearings now, not least because we'd love to hear committee Member John Kerry's thoughts on the matter. The Oil for Food scandal has obvious implications for the policy he's been advocating of subjecting U.S. interests to a Security Council veto. GOP Senator Chuck Hagel is another U.N. booster. If they mean what they say about enhancing the power of the U.N., in Iraq and elsewhere, then they in particular have an obligation to ensure that the world body is both effective and free of corruption.
