Oil-for-food: The United Nations Exposed - Page 6 - Big Big Forums

Jolie Rouge · 03-17-2005, 11:39 PM

Whistle-blower: 'Gaping holes' in oil-for-food
Former monitor says U.N. fired him for reporting corruption
From Phil Hirschkorn -- CNN
Thursday, March 17, 2005

(CNN) -- A former United Nations monitor of the organization's oil-for-food program in Iraq told a congressional committee Thursday that the program had "gaping holes" and that large amounts of aid never reached the Iraqi people.

Rehan Mullick testified that by his estimate more than 20 percent of the shipments to Iraq, worth $1 billion a year, were not distributed properly, with many goods pilfered by the Iraqi military. "A fourth or fifth of the supplies were not distributed," he said.

Mullick, 39, an American sociologist of Pakistani origin, appeared before the House International Relations Subcommittee on Permanent Investigations in Washington. The subcommittee is one of a half-dozen congressional panels probing the program, which ran from 1996 to 2003, until the U.S.-backed invasion deposed the regime of Iraqi dictator Saddam Hussein.

Mullick worked for two years in Iraq as a data analyst for the program designed to permit Iraq, while under international economic sanctions stemming from its invasion of Kuwait in 1990, to export a limited amount of its crude oil reserves and import food, medicine and supplies screened by the United Nations. "Soon after I started my job, it became amply evident that there were gaping holes in U.N.'s efforts to meet [its] objectives," Mullick told the committee in his written statement, though he read aloud only parts of it.

Mullick said in his statement that a database to track the humanitarian shipments was "muddled beyond repair," that survey techniques "were at best amateurish," and that statistics quoted by the United Nations were "misleading."

Over seven years in the program, Iraq sold 3.4 billion barrels of oil for $64.2 billion, which was deposited by buyers in a U.N.-controlled bank account. More than two-thirds of the money was earmarked to buy goods, while the balance paid for program costs, weapons inspectors and reparations to Kuwait.

The United Nations would routinely send contract information for approved imports to Baghdad, and U.N. staff in Iraq were expected to ensure the goods reached their destination. But Mullick said "Saddam loyalists" with jobs at the U.N. mission corrupted the program's data. "A lot of items that were held back or redirected by the government of Iraq were never observed," Mullick's statement said.

Mullick said Saddam stole supplies from the program to rebuild his military. "The Iraqi military rebuilt its logistics by diverting thousands of trucks, pickups, 4-by-4s, et cetera that were delivered to Iraq under the oil-for-food program," he said. "It was common knowledge in Iraq that thousands of Toyota Camrys and Avalons imported under the program were promptly gifted to the functionaries of Iraqi intelligence and the Baath Party."

Whistle-blower says he was rebuffed

Mullick told the subcommittee that he repeatedly alerted U.N. officials of problems he observed but was rebuffed. "Each suggestion resulted in my supervisors reducing my job responsibilities," Mullick said. "This continued to occur until my only job was to run the slide projector at staff meetings."

Mullick said he eventually submitted a 10-page report to U.N. headquarters in 2002 reporting that 22 percent of supplies imported under the program never reached Iraq's 27 million people. "I heard nothing," Mullick said. "Finally I was contacted and told my contract was not being renewed."

Mullick received a doctorate from Iowa State University and is married to an American woman. He currently lives with his wife and daughter in Islamabad. Pakistan. "The U.N. did nothing to act on his warnings, and they essentially fired him for his honesty," said California Rep. Dana Rohrabacher, the subcommittee chairman. "Doctor Mullick did the right thing and was treated as an outcast."

Besides the congressional probes, oil-for-food participants are also being investigated by the Justice Department, the Securities and Exchange Commission and an independent panel led by former U.S. Federal Reserve Chairman Paul Volcker.

Investigators have estimated Saddam extorted approximately $2 billion to $4.5 billion by imposing surcharges on the oil sales and kickbacks on the goods Iraq bought. In addition, Iraq earned an estimated $4 billion to $6 billion in oil sales outside the program to neighboring Jordan, Turkey and Syria, according to the U.S. Government Accountability Office. (Full story)

The U.N. said in February that the longtime head of the program, Benon Sevan, had been suspended from any remaining duties. Still, the United Nations found the program to be a success, saying, for example, that food delivered reduced the malnutrition rate among Iraqi children by 50 percent. Mullick described the United Nations as having "old mafia-style management."
He added in his statement, "Had the U.N. chosen to listen to and offer protection to those who blow the whistle on bureaucratic injustice and corruption, a program like oil for food would have worked more in the interest of the impoverished Iraqi people rather than their detractors."

http://www.cnn.com/2005/ALLPOLITICS/...ood/index.html

Jolie Rouge · 03-28-2005, 05:02 PM

3/28/2005

Investigators critical of Annan in oil-for-food probe

NEW YORK (AP) — Investigators probing corruption in the U.N. oil-for-food program in Iraq will criticize U.N. Secretary-General Kofi Annan for not properly confronting his son's employment by a Swiss company that won a contract under the program, an official said Monday.
The report, set to be released Tuesday, will find that Annan didn't pay enough attention to the apparent conflict of interest involving his son, Kojo, who worked for Cotecna Inspection S.A. at a time the Swiss firm won a U.N. contract to certify the import of goods under the oil-for-food program, the official said.

The Independent Inquiry Committee headed by former U.S. Federal Reserve Chairman Paul Volcker will also criticize the secretary-general for failing to detect shortcomings in the U.N.'s internal bureaucracy that allowed problems in the oil-for-food program to continue until 2003, the official said, speaking on condition of anonymity.

Kojo Annan worked for Cotecna in West Africa from 1995 to December 1997 and then as a consultant until the end of 1998 — when the oil-for-food contract was awarded. He remained on the Cotecna payroll until 2004 on a contract to prevent him from working for a competitor in Nigeria or Ghana.

Oil-for-food investigators have been seeking to verify the Swiss firm's claims that it paid Kojo Annan about $365,000 over eight years.

The secretary-general, his son, and Cotecna all deny any link between Kojo Annan's employment and the awarding of the U.N. contract to the company.

U.N. spokesman Fred Eckhard has said there will be no U.N. comment until the report is released.

http://www.usatoday.com/news/world/2...M_Exclude=Juno

Jolie Rouge · 03-29-2005, 05:17 PM

Annan Refuses to Quit U.N. Over Report
By EDITH M. LEDERER

NEW YORK (AP) - Investigators of the U.N. oil-for-food program in Iraq said Tuesday there was not enough evidence to show that Secretary-General Kofi Annan knew of a contract bid by his son's Swiss employer. However, they criticized the U.N. chief for not properly investigating possible conflicts of interest in the matter.

Asked if he was planning to step down in a response to the program, Annan replied, ``Hell, no.''

The report released Tuesday also accused the company, Cotecna Inspection S.A., and Annan's son, Kojo, of trying to conceal their relationship after the contract was awarded. It also faulted Kofi Annan for conducting a one-day investigation into the matter, saying it should have been a more rigorous, independent probe.

The report's conclusion was not the clear vindication that the secretary-general had wanted, though the investigation led by former U.S. Federal Reserve Chairman Paul Volcker did not accuse the U.N. chief of corruption or any other wrongdoing.

While Kofi Annan said he accepted that criticism, he was happy with the report's findings he committed no wrongdoing. ``After so many distressing and untrue allegations have been made against me, this exoneration by the independent inquiry obviously comes as a great relief,'' he said.

At a press conference after the report was released, Volcker said the investigation found no evidence that Kofi Annan improperly influenced the process by which Cotecna was selected for an inspection contract under the oil-for-food program. ``Our investigation has disclosed several instances in which he might, or could have become aware, of Cotecna's participation in the bidding process,'' Volcker said. ``However, there is neither convincing testimony to that effect nor any documentary evidence. ``Taking all of this into account, the committee has not found the evidence is reasonably sufficient to show that the secretary-general knew that Cotecna had participated in the bidding process in 1998,'' Volcker said.

Kojo Annan worked for Cotecna in West Africa from 1995 to December 1997, and then was a consultant for the firm until the end of 1998 - when it won the oil-for-food contract. He remained on the Cotecna payroll until 2004 on a contract to prevent him from working for a competitor in West Africa.

Although Tuesday's report found no wrongdoing by Kofi Annan, it clearly faulted the secretary-general's management of the world body and his oversight of the oil-for-food program.

The $64 billion oil-for-food program was the largest U.N. humanitarian aid operation, running in 1996-2003. Saddam Hussein's government was allowed to sell oil in exchange for humanitarian goods as an exemption from U.N. sanctions imposed after Iraq's 1990 invasion of Kuwait.

In a bid to curry favor and end sanctions, Saddam allegedly gave former government officials, activists, journalists and U.N. officials vouchers for Iraqi oil that could then be resold at a profit. U.S. congressional investigators say Saddam's regime may have illegally made more than $21 billion by cheating the program and other sanctions-busting schemes.

The report is the second issued by Volcker's team. It coincides with allegations of sex abuse by U.N. peacekeepers and of sexual harassment and mismanagement by senior U.N. staff and comes a week after Kofi Annan called for the biggest overhaul of the United Nations in its 60-year history. ``I think we all share the hope and confidence that the results of our investigation ... may contribute to the larger objective of a reformed U.N., a U.N. capable of commanding and maintaining the support of its member states and the public at large,'' Volcker said.

Some critics, including several U.S. lawmakers, have been calling for Kofi Annan to resign. Even before the report was issued, Sen. Norm Coleman, R-Minn., reiterated his call for Kofi Annan to ``put the interests of the U.N. ahead of his personal interest'' and step down.

Senior U.N. officials insist the secretary-general has no intention of stepping down, and U.N. spokesman Fred Eckhard dismissed reports describing the secretary-general as weak and depressed.

Volcker's Independent Inquiry Committee found that Kojo Annan was not forthcoming with either his father or the committee and accused him of consistently trying to hide the nature of his relationship with Cotecna. It said an investigation was continuing into Kojo Annan's dealings with the program.

In a letter annexed to the report, Kojo Annan's lawyer, William R. Taylor, rejected any claim that Kojo Annan had not been wholly cooperative with the committee. But Taylor admitted he had not told his father the entire truth. ``He regrets the embarrassment that omission caused to his father and to the United Nations and accepts responsibility for it,'' Taylor wrote.

The Volcker report said that while Cotecna ``generally has cooperated'' with the investigation, the committee ``concludes that Cotecna has made false statements to the public, the United Nations, and the committee.''

After a British newspaper, The Sunday Telegraph, reported the link between Kojo Annan and Cotecna in January 1999, the report said, ``Cotecna disguised its continuing relationship with Kojo Annan by routing the payments that were made to him'' through three different companies, in response to instructions from the secretary-general's son.

The secretary-general initiated an inquiry through his staff, which concluded within a day that Kojo Annan's connection to Cotecna was not known to the officials handling contract bids.

Volcker's investigation, however, concluded, that Kofi Annan's inquiry ``was inadequate'' and that the issue should have been referred to the U.N. legal office or internal watchdog.

In an attached letter, Kofi Annan's lawyer defended the secretary-general's action, saying he acted on the advice of three advisers.

Associated Press reporters Desmond Butler and Nick Wadhams contributed to this report.

03/29/05 15:44

http://channels.netscape.com/ns/news...0050329NYK711D

Jolie Rouge · 04-06-2005, 03:49 PM

Senate Votes to Reduce U.S. Dues to U.N.
By KEN GUGGENHEIM

WASHINGTON (AP) - The Senate voted Wednesday to reduce the United States' share of the cost of U.N. peacekeeping missions by tens of millions of dollars.

The vote reflected congressional criticism of the United Nations following allegations of corruption and mismanagement in the oil-for-food program for Iraq, sexual abuses by peacekeepers and other scandals.

U.S. dues are now capped at 27.1 percent of the peacekeeping budget. Under a 1994 law, that cap is to be reduced to 25 percent.

The Bush administration - with the support of Democrats - asked that the cap be maintained at 27.1 percent. A Democratic proposal to keep the higher cap was defeated in a 57-40 vote, mostly along party lines.

The United States is expected to spend about $1 billion on peacekeeping operations this year, with much of the money for activities in Sudan and Haiti. The administration is seeking about the same amount for next year.

If the cap were reduced, that could result in roughly a $75 million peacekeeping cut.

The vote came as an amendment to a bill authorizing $34 billion in spending on foreign aid and State Department operations for 2006. The figure generally reflects Bush's spending request and is about 13 percent more than current spending.

Prospects for the overall bill becoming law are unclear. No foreign aid authorization bill has been passed since 1985, according to Senate staff, largely because of disputes related to abortion policies and other issues. The actual funding for foreign aid comes from separate spending bills.

In arguing to allow the 25 percent cap to become law, Republican senators said this would strengthen the hand of U.S. diplomats as they negotiate the U.S. share of peacekeeping expenses and push for reforms at the United Nations.

Senate Majority Leader Bill Frist warned that if the Democratic proposal were adopted, ``we will make that job more difficult by conceding our willingness to live with the status quo.''

But Sen. Joseph Biden, the top Democrat on the Foreign Relations Committee, said the 25 percent cap could lead to the United States falling behind in its U.N. dues, as it did in the 1990s. He said it would compound problems caused by Bush's nomination of John Bolton, a sharp critic of the United Nations, to become the new U.N. ambassador, he said.

``The double whammy of sending Bolton to the U.N. and cutting our commitment ... would be a very serious problem,'' he said.

The House has not yet taken up its version of the bill. It is expected to include provisions calling for greater openness and other changes at the United Nations.

04/06/05 14:44

http://cnn.netscape.cnn.com/ns/news/...56.htm&sc=1153

Jolie Rouge · 04-14-2005, 10:17 PM

Texas businessman indicted in U.N. oil-for-food probe
From Phil Hirschkorn -- CNN
Thursday, April 14, 2005

NEW YORK (CNN) -- Federal authorities indicted a Texas oil executive, a South Korean businessman and two others Thursday as part of a U.S. probe of the United Nations' Iraq oil-for-food program.

David Chalmers, owner of the Houston-based company Bayoil Inc., which participated in the U.N. program, was arrested in the Texas city Thursday and made an initial appearance in federal court. Chalmers and two associates are accused of paying millions to the regime of Saddam Hussein to secure oil deals, thereby diverting money from the U.N. humanitarian aid program.

Kelley also announced an indictment against Korean businessman Tongsun Park, who allegedly worked as a lobbyist who tried to influence U.N. officials and disguised his relationship with the Iraqi regime. Park is believed to be at large in South Korea.

Chalmers faces three felony charges in an indictment unveiled by Kelley, the U.S. attorney for the Southern District of New York, whose office is overseeing the federal criminal probe. Charged with the businessman were two of his oil traders -- John Irving of Britain, who lives in London, and Ludmil Dionissiev of Bulgaria, who lives in Houston as a permanent legal alien.

Irving and Dionissiev dealt with Baghdad and the foreign oil companies in pursuing deals with surcharges, according to the indictment.

An arrest warrant will be sought for Irving in the United Kingdom.

Chalmers and Dionissiev were each expected to post $500,000 bail -- including $150,000 in cash -- and appear in New York for their arraignment Monday.

The South Korean businessman, Tongsun Park, is accused of acting as an unregistered lobbyist for Iraq starting in the early 1990s and being paid $2 million by the Hussein regime.

Park is believed to be at large in South Korea. In the 1970s, Park was a lobbyist for the Korean government and a central figure in an influence-peddling scandal involving dozens of members of U.S. Congress.

Kelley said Chalmers and his associates "paid inflated commissions" to brokers "knowing and intending a portion of these commission payments were earmarked for the kickback to the Hussein regime."

"By doing this, the defendants were essentially diverting funds that otherwise would have been deposited to the oil-for-food escrow account from which humanitarian aid to the Iraqi people was to be paid," he said.

Bayoil, an oil refiner, distributes and trades petroleum-related products. It is one of a handful of U.S. oil companies that together accounted for less than 1 percent of the $64 billion in Iraqi oil sales during the seven-year humanitarian program.

Bayoil purchased nearly 6 million barrels of Iraqi oil in 1997, shortly after the program was launched, according to records from the Iraqi Oil Ministry.

Subsequently, according to the indictment, Bayoil paid "millions of dollars in secret illegal surcharges to the government of Iraq" for additional purchases of oil in 2000 and 2001.

Chalmers and Bayoil allegedly schemed to buy some 40 million barrels of oil allocated to other companies beginning in 2000, the same year Baghdad started imposing surcharges.

In addition to the price of oil, negotiations allegedly resulted in Bayoil wiring $1.3 million to a Swiss bank account controlled by the foreign oil company, which in turn wired the money through a Manhattan bank to an Iraqi-controlled front company in the United Arab Emirates.

In late 2001, the defendants allegedly paid another $839,000 surcharge for another 2 million barrels of Iraqi oil allocated to another company and then another $451,000 surcharge for another million barrels allocated to another company.

Kelley said the U.S. government intended to force Bayoil to forfeit at least $100 million in assets, which he called a "conservative estimate" of the total business the company conducted with Iraq.

The percentage of that sum paid in surcharges was not immediately disclosed.

However, a CIA-backed Iraq Survey Group report by former U.N. weapons inspector Charles Duelfer found that surcharges on the U.N.-approved oil exports averaged about 25 cents to 30 cents a barrel.

Prosecutors estimated that Bayoil made at least $1 million in profits from its alleged offenses and are seeking twice that -- a maximum fine of $2 million -- from the company.

Accused refute charges

Chalmers is accused of wire fraud, conducting financial transactions with a state sponsor of terrorism and breaking the economic embargo with Iraq.

Criminal charges have also been levied against Bayoil USA and a Bayoil subsidiary chartered in the Bahamas. "We will vigorously dispute the allegations of criminal conduct," said Catherine Recker, one of Chalmer's attorneys, in a written statement. Recker said Chalmers and Bayoil would "enter pleas of not guilty when called upon to do so."

David Howard, who is representing Dionissiev, said in a written statement that his client intends to plead not guilty "because he is not guilty, and he will be found not guilty at trial."

"The complete absence of specifics in the government's indictment concerning Ludmil Dionissiev demonstrate that the government has seriously over-reached by charging him," Howard said.

The Chalmers and Bayoil indictments are the second case brought by federal prosecutors investigating the oil-for-food program.

In January, an Iraqi-American who lives in Virginia, Samir Vincent, pleaded guilty for illegally lobbying for Iraq. Vincent was paid by Baghdad to lobby U.S. and U.N. officials to lift economic sanctions on Iraq imposed after its 1990 invasion of Kuwait.

Vincent is now a cooperating witness, and as a result of his information, an indictment against an alleged Vincent accomplice was also announced Thursday.

The oil-for-food program was launched in late 1996 to aid Iraqi citizens adversely impacted by the sanctions and appeared to achieve its goals of delivering more than $40 billion of humanitarian goods, as well as paying for weapons of mass destruction inspections and reparations to Kuwait.

But the program has long been a suspected source of an estimated $2 to $4.5 billion of illicit revenue for Saddam, who extorted the illegal surcharges on the oil sold and an estimated 10 percent kickback on the food, medicine, and supplies purchased.

By design, Baghdad controlled which vendors participated in the program, but not its revenues; those were deposited into a back account controlled by the U.N., which approved the contracts.

The surcharges and kickbacks were deposited in Iraqi-controlled bank accounts in other countries.

Saddam's deposed regime also pocketed an estimated $6 to $8 billion bypassing the U.N. program by selling oil to neighboring Jordan, Turkey, and Syria, all with U.S approval in an effort to bolster its Mideast allies.

U.N. Secretary General Kofi Annan strongly condemned the permitted smuggling activities Thursday. "It was on the American and British watch," Annan said. "They knew exactly what was going on. They decided to close their eyes."

http://www.cnn.com/2005/LAW/04/14/oi...ent/index.html

Jolie Rouge · 04-18-2005, 03:54 PM

Oilmen plead not guilty in oil-for-food case
Monday, April 18, 2005

NEW YORK (AP) -- Two Houston oilmen pleaded not guilty Monday to charges that they cheated the United Nations oil-for-food program out of humanitarian aid funds by paying millions of dollars in secret kickbacks to Saddam Hussein's Iraqi regime.

The pleas were entered by David B. Chalmers Jr., sole shareholder of Houston-based Bayoil (USA) Inc., and oil trader Ludmil Dionissiev, a Bulgarian citizen and permanent U.S. resident, during a brief proceeding in U.S. District Court in Manhattan.

Chalmers and Dionissiev were arrested Thursday at their Houston homes as federal authorities in Manhattan accused them of cheating the United Nations of at least $100 million that should have gone for humanitarian aid to Iraqis.

The men were charged along with a British citizen, John Irving. Prosecutors said they would seek Irving's extradition from England.

Chalmers and Dionissiev entered their pleas before U.S. District Judge Denny Chin, who continued to allow each of them to remain free on bail of $500,000, secured by $150,000 in cash.

The oil-for-food program, which ran from 1996 to 2003, was created to help Iraqis cope with U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait. It let the Iraqi government sell limited -- and eventually unlimited -- amounts of oil primarily to buy humanitarian goods.

Bart Dalton, a lawyer who said he has known Chalmers since the 1970s, spoke on behalf of the men outside court, saying they "entered pleas of not guilty for the best reasons possible. They are not guilty. We fully expect them to be exonerated of these charges."

Robert E. Welsh, entered a not guilty plea on behalf of Bayoil, said it was a "vibrant and active business."

If convicted of the charges, Chalmers, Irving and Dionissiev could face up to 62 years in prison and a fine of $1 million.

On January 18, Samir A. Vincent, 64, an Iraqi-born American businessman accused of skimming oil-for-food money, admitted to being an illegal agent of Saddam's government.

http://www.cnn.com/2005/LAW/04/18/oi....ap/index.html

Jolie Rouge · 04-20-2005, 10:12 PM

Oil-For-Food Investigators Resign
By DESMOND O. BUTLER and NICK WADHAMS, Associated Press Writers

UNITED NATIONS _ - Two senior investigators with the committee probing corruption in the U.N. oil-for-food program have resigned in protest, saying they believe a report that cleared Kofi Annan of meddling in the $64 billion operation was too soft on the secretary-general, a panel member confirmed Wednesday.

The investigators felt the Independent Inquiry Committee, led by former U.S. Federal Reserve chairman Paul Volcker, played down findings critical of Annan when it released an interim report in late March related to his son, said Mark Pieth, one of three leaders of the committee. "You follow a trail and you want to see people pick it up," Pieth told The Associated Press, referring to the two top investigators who left. The committee "told the story" that the investigators presented, "but we made different conclusions than they would have."

The investigators were identified as Robert Parton and Miranda Duncan.

Parton, as the senior investigative counsel for oil-for-food, had a wide purview. He was responsible for investigations into the procurement of companies under the oil-for-food program and he was the lead investigator on issues pertaining to allegations of impropriety relating to the secretary-general and his son Kojo Annan. Duncan worked on Parton's team.

Parton, a lawyer and former FBI agent who has worked on a hostage-rescue team abroad, confirmed to AP on Wednesday that he resigned a week ago, but he declined further comment.

Duncan did not respond to telephone and e-mail messages left at the Rockefeller Family Fund, where she is a member of the board. She is a granddaughter of billionaire David Rockefeller.

The committee's interim report last month faulted Annan's management of the oil-for-food program, which was set up to help ordinary Iraqis cope with crippling U.N. sanctions imposed on Saddam Hussein's regime after his 1990 invasion of Kuwait.

The report also said Annan didn't properly investigate possible conflicts of interest surrounding a U.N. contract awarded to the Swiss employer of Kojo Annan. The investigators criticized Kofi Annan for refusing to push his top advisers further after they conducted a hasty, 24-hour investigation relating to his son and found nothing wrong. But the interim report cleared the secretary-general of trying to influence the awarding of the $10 million-a-year Swiss contract and said he didn't violate U.N. rules.

Annan said the report exonerated him — something Pieth denied at the time — and the secretary-general said he had no plans to resign. The investigation into Kojo Annan continues. Volcker has promised to deliver a final oil-for-food investigation report in mid-summer.

The oil-for-food scandal has been among a series of problems that have plagued the United Nations in recent months. U.N. peacekeepers have also been accused of sexual misconduct in Congo and other missions, while the former U.N. refugee chief was accused of sexual harassment.

Annan's spokesman Fred Eckhard said the resignations were an internal committee matter and refused to comment. U.N. officials have repeatedly said the report speaks for itself.

A spokeswoman at Volcker's committee, who would speak only on condition of anonymity, said the resignations came after the investigators had completed the work they signed on to do.

Pieth acknowledged disagreements within the committee about how to interpret the evidence on Annan, but he denied investigators were censored. He also praised the work of Duncan and Parton. "I have high esteem for both Robert and Miranda," Pieth said. "It's not a bad parting. I think they are very capable people."

Pieth added, however, that he believed the two investigators got "personally very involved" in the probe and so grew upset. "Again, this is the nature of things," he said.

The inquiry committee has more than 70 investigators probing all aspects of oil-for-food, and Duncan and Parton were two of its most senior investigators.

The investigators report their findings to the three committee members — Volcker, Pieth and former Yugoslav war crimes prosecutor Richard Goldstone — who then make conclusions.

Pieth said the committee had deliberately created an atmosphere where investigators felt comfortable dissenting with others. "I am also quite happy that there are people who dare to speak their mind because that is one of the problems with the U.N. — that you have these guys nodding their heads," Pieth said. "We reproached the secretary-general that he was satisfied with his top guys, who told him after 24 hours that everything was fine," he added, referring to the internal probe of Kofi Annan. "It's not a good thing to have these guys who only say what you want to hear."

The oil-for-food program, which ran from 1996 to 2003, let the Iraqi government sell limited — and eventually unlimited — amounts of oil primarily to buy humanitarian goods. But Saddam's government had authority to decide who would have the right to purchase oil and it is believed to have extracted kickbacks ranging from an estimated $9 billion to $21 billion.

http://news.yahoo.com/news?tmpl=stor..._investigation

Jolie Rouge · 04-21-2005, 08:27 PM

U.S. says oil-for-food report doesn't clear Annan

UNITED NATIONS (AP) — A U.S. State Department official said Thursday that an interim report on bribery and other wrongdoing in the U.N. oil-for-food program didn't exonerate Kofi Annan as the secretary-general had proclaimed.

U.N. Secretary-General Kofi Annan is attending the Asia Africa Summit in Jakarta, Indonesia.
By Suzanne Plunkett, AP

The statement from Mark Lagon, the Deputy Assistant Secretary of State for International Organization Affairs, was the first time the United States had rebutted Annan's claim, made shortly after the release of the report on March 29, that he had been cleared by the committee.

Annan came under fresh scrutiny a day after The Associated Press reported that two senior investigators with the Independent Inquiry Committee resigned because they believed the report that cleared the secretary-general of meddling in the $64 billion program was too soft on him.

Lagon said the resignations were further reason to suggest Annan wasn't cleared.

"It appears that two people who had a hand in forming that report think that even what the report said was perhaps a little too charitable about the secretary general and his leadership," Lagon said.

The committee led by former U.S. Federal Reserve Chairman Paul Volcker faulted Annan's management of the oil-for-food program, which was set up to help ordinary Iraqis cope with crippling U.N. sanctions imposed on Saddam Hussein's regime after his 1990 invasion of Kuwait.

The report did clear Annan of interfering in the awarding of a $10 million-a-year U.N. contract to the Swiss employer of his son, Kojo Annan. But it also said Kofi Annan didn't sufficiently investigate possible conflicts of interest surrounding the contract.

"We aren't calling for the resignation of the secretary-general, however it is probably an exaggeration to suggest that the Volcker report exonerated the secretary-general," Lagon said.

Volcker's committee is investigating allegations of widespread fraud in the program, which ran from 1996-2003 and was meant to help ordinary Iraqis suffering under U.N. sanctions.

But Saddam's government had authority to decide who would have the right to purchase oil and it is believed to have extracted kickbacks ranging from an estimated $9 billion to $21 billion.

Scandal surrounding the oil-for-food program has become a problem that won't go away for Annan. Last week, U.S. Attorney David Kelley filed charges against three people allegedly connected to oil-for-food, including a South Korean businessman with ties to current and past U.N. officials such as former Secretary-General Boutros Boutros-Ghali, according to staff.

The Kelley complaint against the South Korean, Tongsun Park, cited two high-ranking U.N. officials — identified only as "official 1" and "official 2." It said Park met them in an apparent bid to influence the ultimate design of the oil-for-food program, and doesn't rule out the possibility that they may have been bribed.

According to the complaint, Park invested $1 million in a company run by the son of one of the officials. The company later folded

And on Wednesday, Annan's special envoy for North Korea, Maurice Strong, stepped aside after he acknowledged business ties with Park. The Volcker committee is investigating Strong's possible role in oil-for-food, while Strong denies he had anything to do with the program.

The Toronto Globe and Mail reported Thursday that Strong conceded it was his son, Frederick Strong, who ran the company in which Park invested money. That would make Maurice Strong "official 2."

The newspaper identified the company as Cordex Petroleums Inc.

On Thursday, U.S. Rep. Henry Hyde, an Illinois Republican, sent Volcker a letter demanding that he investigate the actions of the two unidentified U.N. officials.

Volcker and the leaders of his inquiry say their final report — expected in midsummer — will likely lead to dozens of criminal prosecutions by legal authorities in various countries for bribery, sanctions busting, money laundering and fraud.

Volcker recently underwent surgery to repair swelling in his abdominal aorta, his office said Thursday. He's in good health after the April 1 operation, according to a statement from his chief spokesman, Michael Holtzman. The committee's work wasn't delayed, his office said.

The operation is called an endovascular repair of an aneurism in the abdominal aorta. In layman's terms, Volcker's aorta had begun to swell where it passed through his abdomen. Doctors performed a minimally invasive procedure, inserting a stent to help blood flow.

If not addressed, such aneurisms can burst and cause massive internal bleeding.

http://www.usatoday.com/news/washing...M_Exclude=Juno

Jolie Rouge · 05-16-2005, 02:07 PM

US court rules for UN on papers in oil, food probe
1 hour, 3 minutes ago

UNITED NATIONS (Reuters) - A federal court ordered Tuesday that a U.N.-commissioned independent inquiry into corruption in the oil-for-food program be allowed to inspect papers one of its investigators gave to a congressional panel.

The investigator, Robert Parton, a former FBI agent, resigned his post from the Independent Inquiry Committee headed by former Federal Reserve Chairman Paul Volcker. Parton said the panel's last report was not tough enough on Secretary-General Kofi Annan, and he took materials from the independent inquiry with him.

The United Nations went to court last week after Parton turned over documents from the Volcker committee to the U.S. House of Representatives International Relations Committee, led by Illinois Republican Rep. Henry Hyde. The U.N. suit seeks to force Parton to return the documents and not comply with subpoenas from two other congressional committees.

Judge Ricardo Urbina in U.S. District Court in Washington ruled that Parton had to provide to the Volcker committee "the opportunity to inspect and copy all materials that the defendant allegedly copied, removed or otherwise ... obtained from the IIC," the Independent Inquiry Committee.

Urbana on May 9 issued a 10-day restraining order against Parton from responding to subpoenas from two committees as the Volcker panel had requested.

The U.N. complaint puts the inquiry committee on a collision course with the U.S. Congress where Republican legislators accuse the panel of undue secrecy. Volcker says he has to protect the credibility of his investigation.

Susan Ringler, counsel for the inquiry, said in a brief that the documents could "pose a grave risk to the safety of Iraqi witnesses, who if their names are disclosed, fear for their lives and the lives of their families."

But Parton, in a reply filed this weekend, said no lives were in danger and the names of sensitive witnesses had been "redacted" or crossed out.

He said that the committee had given Annan information that violated the confidentiality of a witness. The committee has denied this.

http://story.news.yahoo.com/s/nm/un_usa_oil_food_dc

Jolie Rouge · 05-17-2005, 11:19 AM

5/17/2005
U.S. role in oil-for-food probe eyed

UNITED NATIONS (AP) — A U.S. Senate subcommittee sought to tie together the complex threads of Saddam Hussein's manipulations under the U.N. oil-for-food program in a hearing Tuesday, detailing how illicit Iraqi oil was sold to peddle influence and made its way to market — sometimes in the United States.

The daylong hearing in Washington was reviewing three major reports from the subcommittee of the U.S. Committee on Homeland Security and Government Affairs, which studied in great detail how Saddam made billions of dollars in illegal oil sales despite U.N. sanctions imposed in 1991 after Iraq's invasion of Kuwait.

Committee investigators argue that politicians from France, Britain and Russia were involved, as was a Texas-based oil company, Bayoil. And often, the United States and other members of the U.N. Security Council looked the other way. "On the one hand, the United States was at the U.N. trying to stop Iraq from imposing illegal surcharges on oil-for-food contacts," Sen. Carl Levin, D-Mich., said. "On the other hand, the U.S. ignored red flags that some U.S. companies might be paying those same illegal surcharges."

Those scheduled to testify Tuesday included George Galloway, the outspoken British lawmaker accused by the subcommittee of taking vouchers under oil-for-food.

In his opening statement at the meeting, subcommittee chairman Sen. Norm Coleman, R-Minn., said more than $300,000 in surcharges were paid to Saddam's regime in allocations involving Galloway. "Senior Hussein regime officials informed the subcommittee that the allocation holders — in this case, Galloway — were ultimately responsible for the surcharge payment and, therefore, would have known of the illegal, under-the-table payment," he said.

Speaking to reporters before the hearing began, Galloway said the subcommittee's investigation was intended to take attention away from failed U.S. efforts in Iraq. "It's the mother of all smokescreens," he said.

The oil-for-food program, which ran in 1996-2003, was designed to let Saddam's government sell oil in exchange for humanitarian goods to help the Iraqi people cope with crippling U.N. sanctions. But Saddam peddled influence by awarding favored politicians, journalists and others vouchers for oil that could then be resold at a profit. He also smuggled oil to Turkey, Jordan and Syria outside the program, often with the explicit approval of the United States and the rest of the Security Council.

Many of the allegations made by Coleman's subcommittee are not new. In April, Bayoil USA owner David Chalmers was indicted in U.S. District Court for allegedly funneling kickbacks to Saddam. Chalmers has denied any wrongdoing.

But rarely had the allegations been spelled out with so much detail or scope. Coleman's investigators have interviewed former top Iraqi officials and businessmen, who provided a behind-the-scenes look at how Saddam's grand scheme worked.

Documents released Monday by the minority Democrats on Coleman's subcommittee studied two issues: Bayoil's involvement and a single instance that saw Saddam's regime smuggle more than 7 million barrels of oil out of the Iraqi port of Khor al-Amaya, apparently with U.S. knowledge, in the weeks before the U.S.-led invasion in 2003.

The report found that Bayoil imported some 200 million barrels over two years starting in September 2000 and sold it to U.S. oil companies. At that time, Saddam was trying to tinker with the price of oil so that when he sold it, companies could be compelled to pay him kickbacks.

The report claimed that Bayoil paid "directly or indirectly" some $37 million in kickbacks to Saddam even as the United States and other council members realized what the dictator was doing and began ordering price hikes to quash the kickbacks scheme.

Bayoil then sold the crude to U.S. companies, though there is no evidence the companies knew about the kickbacks, the report said.

The committee singled out the U.S. Office of Foreign Assets Control, which the United Nations repeatedly warned about Bayoil's scheme. It cited an apparent misunderstanding in which U.S. authorities assumed the United Nations would monitor individual companies, while U.N. officials believed that was the responsibility of national governments.

The report's focus on the single instance of oil smuggling, through Khor al-Amaya, was meant to illustrate how Saddam sold oil outside oil-for-food.

The committee cited an October report by U.S. arms inspector Charles Duelfer saying that while Saddam pocketed more than $225 million illegally under oil-for-food, he made some $8 billion in illegal oil sales outside the program.

http://www.usatoday.com/news/world/2...M_Exclude=Juno

Jolie Rouge · 06-14-2005, 11:46 PM

Memo raises questions on Annan role in UN contract
By Irwin Arieff
June 14, 2005

UNITED NATIONS (Reuters) - A newly disclosed memo appeared to cast doubt on U.N. Secretary-General Kofi Annan's insistence he was unaware of a bid by a Swiss firm that employed his son for a lucrative contract under the scandal-tainted U.N. oil-for-food program.

U.N.-appointed investigators were "urgently reviewing" the memo, Michael Holtzman, a spokesman for the Independent Inquiry Committee led by former U.S. Federal Reserve Chairman Paul Volcker, said on Tuesday.

The memo described a late-November 1998 Paris meeting of Annan with officials of Cotecna Inspection Services, just weeks before the Geneva-based company won the contract. The contract has become a focus of Annan's critics, including several U.S. Republican lawmakers who have accused him of mismanagement and called for his resignation.

Chief U.N. spokesman Fred Eckhard said Annan had no recollection of any such meeting during the trip to Paris, for a summit of French-speaking world leaders.

Annan's son, Kojo Annan, was a Cotecna consultant at the time of the encounter described in the memo, but it was unclear whether Kojo was present at the encounter. The document was written by Michael Wilson, a family friend of the Annans who was at the time a senior Cotecna executive.

The one-page Dec. 4, 1998, e-mail, a copy of which was obtained by Reuters, was addressed to top Cotecna executives and devoted just two sentences to the U.N. contract matter.

It stated: "We had brief discussions with the SG and his entourage. Their collective advise (sic) was that we should respond as best as we could to the Q&A session of the (sic) 1-12-98 and that we could count on their support."

The memo was first disclosed by the New York Times.

ANNAN HAS 'NO RECOLLECTION'

Annan, in Paris on Tuesday, "has no recollection of any such exchange," Eckhard told reporters.

A view that the United Nations would support Cotecna's bid "could not have come from the secretary-general because he had no knowledge that Cotecna was a contender for that contract," the spokesman said.

Cotecna officials later attended a question-and-answer session on the U.N. bidding in New York on Dec. 1, 1998 -- the meeting the memo was apparently referring to. Wilson, in a second memo obtained by Reuters, said the session went well.

"Our chances of getting the contract are very good. We presented a sound technical tender competitively priced. With the active backing of the Swiss Mission in New York and effective but quite (sic) lobbying within the diplomatic circles in New York, we can expect a positive outcome to our efforts," Wilson wrote.

The first memo, commenting on an unrelated matter, referred to the presence at the Paris summit of a Cotecna official identified as "KA," but it was unclear whether this was a reference to Kojo Annan.

Cotecna, U.N. officials and Kojo Annan's lawyers could not immediately say whether he had attended the Paris meeting or been in contact with his father at the time.

Cotecna won a multimillion-dollar U.N. contract on Dec. 31, 1998, to certify goods coming into Iraq under the $67-billion oil-for-food program, which ran from late 1996 until 2003.

The program is under investigation by several U.S. congressional committees as well as the Volcker panel.

The program allowed Iraq, then under U.N. sanctions, to export oil and use the proceeds to import humanitarian goods.

A report released by the Volcker committee in late March concluded Annan did not influence the contract award.

Cotecna, which said it uncovered the memo only recently, reiterated in a statement its view that it had won the contract "fairly and on the basis of price."

http://news.yahoo.com/news?tmpl=stor...iraq_un_oil_dc

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I guess that Annan is using a page out of the Clinton handbook ...