Oil for Food Becomes Isolationist Fodder

By Joy Gordon, The Nation. Posted December 1, 2004.

The CIA's Duelfer report may have confirmed the gross falsity of the WMD claims invoked by the Bush administration to justify its war against Iraq, but it has also triggered a feeding frenzy in the growing attacks against the United Nations. In January the Iraqi newspaper Al Mada published a list of people and organizations, including UN personnel, who supposedly received vouchers from the Iraqi government to purchase oil. In April the General Accounting Office (since renamed the Government Accountability Office) published a report claiming that the Oil for Food (OFF) program had been rife with corruption and that through smuggling and kickbacks, Saddam Hussein had managed to acquire more than $10 billion in illicit funds. A series of congressional investigations followed, featuring conservative witnesses who pilloried the UN for incompetence, corruption and general unfitness. In the latest hearings chaired by Republican Norm Coleman, the committee staff claimed that Saddam's access to illicit funds totalled over $21 billion – twice the sum claimed by the CIA – and that the money went to terrorists around the world, not to mention (rather astonishingly) the post-Saddam insurgency.

If it is true that Benon Sevan, former head of the OFF program, accepted illicit oil vouchers, then that may well constitute fraud (although the evidence cited against him so far has been tenuous). But it would also have been in direct violation of clear UN policies – hardly an indicator of institutional corruption.

Rarely mentioned, either at the hearings or in the press coverage, was the fundamental distinction between the policies established by the Secretariat and the UN agencies and those that result from decisions of particular member states within the highly politicized Security Council. For example, the CIA report says that the bulk of the illicit transactions were "government to government agreements" between Iraq and a few other countries, for trade outside the OFF program. According to the report, they resulted in income to Iraq of $7.5 billion.

The largest of these arrangements was with Jordan – revenue from which totaled about $4.5 billion. This trade arrangement was the single largest source of Iraqi income outside the OFF program. From 1990 until the OFF program began in late 1996, "Jordan was the key to Iraq's financial survival," according to the report. Why didn't "the UN" do something about it? Because the Security Council – where the United States was by far the single most influential member – decided in May 1991 that no action would be taken to interfere in Iraq's trade with Jordan, America's closest ally in the Arab world.

Likewise, the maritime smuggling that took place under the nose of "the UN" in fact took place under the nose of something called the Multinational Interception Force, a group of member nations that responded to the general invitation of the Security Council for nations to interdict Iraqi smuggling. The "UN" Multinational Interception Force turns out to have consisted almost entirely of the US Navy. The commander of the MIF was at every point, from 1991 to 2003, a rear admiral or vice admiral from the U.S. Fifth Fleet. The United States contributed the overwhelming majority of ships – hundreds in fact. Britain provided the deputy commander and some naval forces and other countries contributed a few ships. The UN itself provided no forces or commanders. "The UN" failure to interdict Saddam's tankers of illicit oil turns out, in nearly every regard, to have been a U.S. naval operation.

The much-vaunted kickbacks on import contracts also turn out to be not quite as advertised. Saddam, the claim goes, inflated the price of import contracts by five to 10 percent, then received the difference in cash from the contractors. Thousands of contracts, stretching over years, were involved; how could the UN have been so incompetent as not to notice? In fact, prices inflated by only five or 10 percent were difficult to detect precisely because the amounts were so small and often within the normal range of market prices. But when pricing irregularities were large enough that they might have indicated kickbacks, the UN staff did notice. On more than seventy occasions, the staff brought these to the attention of the 661 Committee, the Security Council body charged with implementing the sanctions. On no occasion did the United States block or delay the contracts to prevent the kickbacks from occurring. Although the United States, citing security concerns, blocked billions of dollars of humanitarian contracts – $5 billion were on hold as of July 2002 – it never took action to stop kickbacks, even when they were obvious and well documented.

Far from giving Saddam a free hand, the OFF program involved extensive monitoring and oversight. The government of Iraq first had to submit a list of every single item it hoped to purchase in the coming six months, and the UN staff had to approve the list. Once Iraq had signed a contract with a vendor, the contract was circulated to UNSCOM (later UNMOVIC), to see if there was anything that could be used for military purposes. Every member of the Security Council had the opportunity to review every contract, and each member could block or delay any contract for imports. Every member of the Security Council also had to approve every contract for the sale of oil. If there was cash paid under the table, it did not happen for lack of oversight. It happened despite the most elaborate monitoring system imaginable. And if the members of the Security Council – including the United States – failed to do their job, that is not the fault of Kofi Annan.

The Duelfer report, along with eight sets of Congressional hearings, vitriolic press coverage and considerable ranting by the right, suggest an antipathy toward the UN that goes well beyond election-season maneuvering. The consequences of this scandal will be considerable. We witnessed the ill-fated decision to invade Iraq without Security Council authorization; we might recall that the Security Council would not grant the American demand to authorize an invasion, precisely because the United States was unable to provide any compelling evidence that Iraq had weapons of mass destruction. If the world's most respected institution of international governance is rendered impotent by accusations as distorted and exaggerated as these, we should all fear the consequences.

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