by Gary D. Halbert
May 25, 2004
This week, we look into the United Nations’ (UN) “Oil-for-Food” program in Iraq, which was established after the Gulf War in 1991 and was designed to allow Iraq to sell enough oil to meet the humanitarian needs of the Iraqi people, such as food, medical supplies, essential services, etc. The program was never intended to line the pockets of Saddam or benefit his cronies around the world, which sadly is exactly what it did for many years.
As with many UN programs, Oil-For-Food was poorly structured, thus allowing for massive abuses. The nature and scope of these abuses were so grievous and so widespread that the Oil-For-Food program may well have been the greatest financial scandal of the last 100 years. This incredibly huge scam crosses borders, religions and political ideologies, uniting those involved in plain and simple greed.
What’s most stunning are recent revelations exposing those at the UN and elsewhere who were primarily responsible for the abuses, and who participated in this massive fraud. In short, many in the UN administrative infrastructure and many of its members have been blatantly corrupt, as have some of our so-called “allies” around the world.
This scandal also brings to light the UN’s outrageous hypocrisy and duplicity as they loudly criticized our efforts in the War on Terror as inhumane, yet at the same time they were skimming millions from the Oil-for-Food program and thereby depriving the Iraqi people of needed food and medicine.
Is it any wonder there was such opposition to the US invasion of Iraq?
No, it was simply bad for business!
Why do you need to know about this?
First, because there is a massive cover-up underway at the UN.
Second, the liberal media is cooperating as always. What have you heard from them about the Oil-For-Food scandal recently?
Third, it is also worth mentioning that John Kerry has featured the UN in many of his foreign policy proposals, including his desire to have the UN put in charge of the administration of Iraq.
As more and more evidence comes to light, that would be like allowing the fox to guard the hen house. Finally, if all the facts in this scandal actually see the light of day, the UN will emerge discredited, weakened, and very possibly, broken. Maybe that wouldn’t be such a bad thing.
The U.N. Exposed
A recent Rasmussen survey showed that only 38% of Americans have a favorable opinion of the UN, while 44% have an unfavorable opinion. Actually, these favorable/unfavorable numbers were quite surprising to the media, but probably not to most of you reading this. The unfavorable numbers are almost certain to rise in the near future as the scathing details of the Oil-For-Food scandal are exposed.
If you are surprised by the recent revelations about Oil-For-Food, you really shouldn’t be. After all, the UN is comprised in large part of representatives of small, poor Third World nations, many of which are inherently corrupt and anti-American. The fact that their ingrained dishonesty and corruption would spill over into the UN really shouldn’t surprise anyone. Nor should it surprise us that the UN has had a history of anti-American activity.
In 2001, for example, the United States was removed from the United Nations High Commission for Human Rights (UNHCHR) for the first time since 1947 in favor of Sudan, one of the world’s absolute worst human rights violators. By the way, Sudan was recently granted another term on that commission! This is only one of many such examples, so it’s not a stretch to see how a UN organization could be so corrupt.
When it was conceived in April of 1995, the Oil-For-Food program was intended to be a humanitarian mechanism. Prior to its full implementation in 1997, Iraq was subject to extremely stiff trade sanctions resulting from Saddam’s defiance of UN weapons inspectors. The Oil-For-Food program provided basic relief in the form of limited crude sales. In the beginning, the program was well intentioned, seeking to bring relief in the form of food and medical supplies to the Iraqi people. After all, it didn’t seem fair to punish the citizens of Iraq for the crimes of Saddam Hussein and the Iraqi regime.
Unfortunately, this program rapidly turned into a complicated kickback scam that allowed Saddam to bribe political figures and institutions around the world, as well as fuel his notoriously evil rule. From information discovered to-date, it appears that the tangled web of deceit extended beyond the UN and the governing body of the Oil-For-Food program itself, but also may include several of our so-called “allies,” as you will read below.
[b]How This Information Came to Light
The corruption in the Oil-For-Food program had long been suspected. A June 20, 2003 article by Marc Perelman on The Forward Internet website discussed doubts about the Oil-For-Food program and suggested that some of the money was being used to fund terrorism (more about this later). In part, Perelman said:
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“The now-defunct program allowed Iraq to buy food and medicine with its oil proceeds under U.N. supervision. Although the oil sales in question were legal and approved by the U.N., several observers say the system involved kickbacks and was used by Saddam to buy political support and to finance intelligence activities and even terrorist groups.”
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Concrete evidence came to light in December of 2003. While advising the Iraqi Governing Council, Claude Hankes-Drielsma, the UK Chairman of Roland Berger Strategy Consultants, sent an urgent fax to UN Secretary-General Kofi Annan.
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“As a result of my findings here, combined with earlier information I most strongly urge the UN to consider appointing an independent commission to review and investigate the Oil-For-Food Programme. Failure to do so might bring into question the UN’s credibility and the public’s perception of it…My belief is that serious transgressions have taken place and may still be taking place.”
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Mr. Hankes-Drielsma was shown various documents at the Iraqi Oil Ministry that strongly indicated major abuses in the Oil-For-Food program. These documents reflected both individuals and institutions that Saddam rewarded with allocations of Iraqi oil. The names were compiled into a spreadsheet at the request of the Iraqi Governing Council. Some of the names have been published in Al Mada, an Iraqi daily paper, and will likely appear soon in more mainstream sources.
How The Scam Worked
From its inception, the Oil-for-Food program was riddled with flaws and loopholes, opening the door for the grievous abuses that followed. One of the major flaws was that Saddam Hussein was given the right to 1) select the parties who would buy the Iraqi oil, and 2) select the suppliers of the humanitarian aid. Hussein was also allowed to set the price at which Iraqi oil would be sold.
All the seeds for a giant scandal were put into place. Hussein had the ability to determine with whom to deal and set the official price of Iraqi oil. Furthermore, the rules did not force Hussein to deal directly with the end-users; instead, he was allowed to sell oil through middlemen. For political purposes, Hussein would sell the oil at a discount to the middlemen and they, in turn, sold it to the end-users at market prices. Nice work if you can get it!
Another flaw in the program was that all deals were confidential between Hussein and the UN. Under this arrangement, the UN was not to examine the contracts for Iraqi oil except between the Iraqi Oil Ministry and the first purchaser. The story is that the UN had no idea the middlemen were adding surcharges to the contracts awarded them by Saddam, and therefore they went totally unnoticed by the UN. Yeah, right!
In one alleged example, UN Oil-For-Food administrator Benon Sevan was granted an allocation of 7.3 million barrels of Iraqi oil, on which he could expect to make a $3.5 million profit. Not a bad take for an international bureaucrat!
The US General Accounting Office estimates Hussein skimmed as much as $10 billion from a total of $67 billion that flowed through the program. It all went either directly to Hussein personally, or to supporters of the regime. By bribing UN officials and foreign dignitaries, Hussein also guaranteed their silence as he used money for purposes other than the humanitarian aid for which it was designed. The UN also looked the other way when Hussein sold oil to other countries in excess of the amounts allowed by the Oil-For-Food program.