Incite -- (v) 1: give an incentive; 2: provoke or stir up; "incite a riot"; 3: urge on; cause to act
Monday, January 17, 2005

What's in a (sub) headline
Written by: Beck

For those not keeping up, here's a 4 page article from on the history & current standing of the UN oil-for-food scandal. I love the subheadline: How the United Nations' oil-for-food program was transformed into a piggy bank for Saddam Hussein and the biggest financial scandal in the world body's 60-year history.

A few choice excerpts for your reading pleasure:
The Treasury Department, the Department of Justice, the Manhattan district attorney's office, five legislative committees, at least three foreign governments, and, oh yes, the United Nations itself are asking who's responsible for the more than $4 billion in illegal kickbacks on Iraqi oil sales and goods from suppliers exporting food, medicine, and other materials to Baghdad.


The U.N. sanctions committee, which included representatives from the United States and other Security Council members, had final authority over the oil-for-food program. Volcker wants to know why they didn't plug the holes and if any were influenced by the ongoing trade their countries had developed through the oil-for-food program. Senate investigators have obtained minutes of the sanctions committee meetings, but Volcker so far has been denied access to the massive bound volumes. Asked about the disparate treatment, a Volcker confidant said: "The U.S. has not been terribly helpful. They are very reluctant to demonstrate the degree to which they either overlooked or approved the contracts, the monitoring of them, and the smuggling." [ed: I've long suspected something like this might be at work. It's time to come clean folks. It will all come out in the end, best to make a clean break now. Emphasis mine.]


A Pentagon audit that examined just 10 percent of the oil-for-food contracts pending at the time of the U.S.-led invasion in 2003 found that the costs of nearly half the contracts appeared to be inflated. On just the food contracts alone, Pentagon auditors found evidence of overpricing in 87 percent of them. The audit, reviewed by U.S. News , also found five contracts that included "after sales service charges" of between 10 and 20 percent. It is now believed that Saddam and his agents tacked on such surcharges to the aid contracts in order to siphon money out of the program and divert it to the regime's purposes, using millions meant to buy food to instead shore up his army and construct lavish presidential palaces. In order to pay the surcharge fees, it appears, some companies either inflated the cost of goods sold or delivered fewer goods than called for in their contracts. Former Iraqi ministries, the Pentagon report related, said surcharges and kickbacks were "standard practice."


In creating the oil-for-food program in 1996, the United Nations sanctions committee intended to accomplish two things: Lighten the burden of the U.N.-imposed sanctions on ordinary Iraqis and make sure that Saddam and his henchmen didn't use the money from the permitted oil sales to buy or build banned military weapons. Simple enough. But the problem was that Saddam was allowed by the Security Council to both sell the oil and negotiate with foreign suppliers. It is clear now that the inspection companies hired by Sevan's office to keep track of the flow of oil and goods operated really at the pleasure of Saddam. After the U.N. replaced Lloyd's, Cotecna was assigned to monitor the shipments of humanitarian aid. A company called Saybolt was contracted to monitor the oil sales. Neither, it turns out, had sufficient leverage to force the Iraqis to abide by the U.N. rules. Representatives from Cotecna, which U.S. News learned recently hired a Washington firm to lobby on the oil-for-food issue, have testified that they were often threatened by Iraqi officials. Seth Goldschlager, a spokesman for Cotecna, adds that his company was authorized only to "check paperwork." "The first contract called for verification inspections," Goldschlager said, "but the Iraqis refused that." Congressional investigators tend to agree that the inspection companies faced an impossible task. "They were paper tigers with no authority at all," says Tom Costa, a staff member of the House Government Reform subcommittee. "If someone wanted to just drive by a checkpoint, they just drove by."

Summaries of U.N. sanctions committee meetings make it clear that member countries, including the United States, were aware that Saddam was attempting to game the system. More than once, committee members were shown evidence that kickbacks were being paid by aid suppliers, that Saddam was diverting aid to his military, and that Iraqi oil was being smuggled illegally. The question now for everyone examining the sieve like oil-for-food program is why so little was done to stop such abuses and what responsibility Washington may have. A Senate investigator who has reviewed some of the sanctions committee minutes told U.S. News that, overall, U.S. performance looks to have been pretty good. "When the U.S. or the Brits or the Dutch bring up a concern with the program," the investigator explained, "the Russians and the French and the Chinese stop the proper oversight."
I'm really looking forward to the release of the findings of the various investigations into oil-for-food, but I'm beginning to wonder if they'll even be out while Annan is still in office (his term is set to expire in 2006).

(Hat tip: Instapundit)

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