Thursday, March 11, 2004
Oh this brings me such joy.
"Kojo & Kofi
Unbelievable U.N. stories.
By Claudia Rosett
In the growing scandal over the United Nations Oil-for-Food program, which from 1996-2003 supervised relief to Saddam Hussein's Iraq, U.N. Secretary General Kofi Annan and his staff have excused themselves from any responsibility for the massive corruption involving billions in bribes and kickbacks that went on via more than $100 billion in U.N.-approved contracts for Saddam to sell oil and buy humanitarian supplies. U.N. officials have denied that this tidal wave of graft in any way seeped into their own shop, or that they even had time to notice it was out there. They were too busy making the world a better place.
That's fascinating, not least given the ties of Annan's own son, Kojo Annan, to the Switzerland-based firm, Cotecna, which from 1999 onward worked on contract for the U.N. monitoring the shipments of Oil-for-food supplies into Iraq. These were the same supplies sent in under terms of those tens of billions of dollars worth of U.N.-approved contracts in which the U.N. says it failed to notice Saddam Hussein's widespread arrangements to overpay contractors who then shipped overpriced goods to the impoverished people of Iraq and kicked back part of their profits to Saddam's regime.
Cotecna was hired by the U.N. on December 31, 1998. Shortly afterward, press reports surfaced that Kojo was a partner in a private consulting firm doing work for Cotecna, and that just 13 months previously he had occupied a senior slot on Cotecna's own staff. Asked about this in 1999 by the London Telegraph, a U.N. spokesman, John Mills, replied that the U.N. had not been aware of the connection, and that "The tender by Cotecna was the lowest by a significant margin."
It seems there's a lot the U.N. managed not to be aware of. But the information that Cotecna — while employing Kofi's son in any capacity — put in the lowest bid by far for the job of authenticating Saddam's Oil-for-Food imports, is not necessarily reassuring. Cotecna, which got paid roughly $6 million for its services during that first year (the U.N. will not release figures on Cotecna's fees over the following years) was bidding on work that empowered its staff to inspect tens of billions worth of supplies inbound to a regime much interested in smuggling, and evidently accustomed to dealing in bribes and kickbacks as a routine part of business. The issue was never solely whether the monitors were cheap, but whether they were trustworthy.
The whole setup raises disturbing questions. But this is a subject on which neither the U.N. nor Cotecna has been willing to offer illumination. Asked for details, both have stonewalled. The U.N. spokesman Mills, who fielded the question in 1999, is now deceased. A query to the U.N. Oil-for-Food elicits from a spokesman only the information that the five-year-old response by the late Mills "stands, as provided by the U.N." A recent query to Cotecna, asking for at least some detail on ties to Kojo Annan, elicits nothing beyond the reply that: "There is nothing else to add."
It is possible of course, that Kojo Annan had nothing to do with the Iraq program per se, as he told the Telegraph back in 1999: "I would never play any role in anything that involves the United Nations for obvious reasons." Though at the same time, in a comment that suggested at least nodding acquaintance with the Oil-for-Food program, Kojo added: "The decision is made by the contracts committee, not by Kofi Annan."
Then why the reluctance from the U.N., or Cotecna, for that matter, to provide any further details whatsoever? Beyond that, it is disingenuous to suggest Annan had no responsibility for the contracts. Oil-for-Food was run out of the U.N. Secretariat, reporting directly to Annan, who regularly signed off on the six-month phases of the program. Without his approval, the contracts would not have gone forward.
Even if we assume that everyone on the U.N.'s Oil-for-Food staff, as well as Kofi Annan himself, was indeed ignorant of Kojo Annan's involvement with Cotecna, it is hard to buy the argument that Kofi, while signing off regularly on the program's workings, was simply oblivious to the details. Not only was Kofi Annan the boss, but he was directly involved from the beginning. Kofi Annan's official U.N. biography notes that shortly before his promotion to Secretary-General "he led the first United Nations team negotiating with Iraq on the sale of oil to fund purchases of humanitarian aid."
It was Annan, who in October 1997 brought in as Oil-for-Food's executive director Benon Sevan, reporting directly to the Secretary-General, to consolidate Oil-for-Food's operations into the Office of Iraq Program. And it was shortly after Sevan took charge that Oil-for-Food, set up by Kofi Annan's predecessor, Boutros Boutros-Ghali, with at least some transparency on individual deals, began treating as confidential such vital information as the names of specific contractors, quantities of goods, and prices paid.
U.N. staff, such as Under-Secretary General Shashi Tharoor in a letter last month to the Wall Street Journal, have argued that the U.N. was not responsible for Saddam's misdeeds, and that U.N. staff were not concerned with such kickback-relevant matters as business terms of Saddam's contracts. The disturbing implication is that the U.N. — while collecting a commission of more than $1 billion on Saddam's oil sales to cover its own overhead in administering Oil-for-Food — was indifferent to Saddam's short-changing the Iraqi people, whose relief was supposed to be the entire point of the program.
Beyond that, the U.N., during the final months of Oil-for-Food, gave every indication of knowing just where the problems lay. Last May, shortly after the fall of Saddam's regime, the U.N. Security Council voted to end the Oil-for-Food program and gave the U.N. Secretariat six months to tie-up loose ends before handing over any outstanding import contracts to the U.S. Coalition Provisional Authority. With Saddam's regime gone as a contracting party, the U.N. began a frenzied process of "renegotiating" billions in contracts, basically winnowing out the graft component that Oil-for-Food had previously approved.
By the end of this sudden housecleaning, the U.N. had scrapped more than 25 percent of the contracts for which, under Saddam, it had already agreed to release funding from the U.N.-controlled Oil-for-Food bank accounts. Uncharacteristically, the U.N. on its website has posted explanatory notes next to some of the dropped contracts. These do not suggest a U.N. that was living in ignorance of Saddam's 10-percent-overpricing-and-kickback scheme.
For instance, in the U.N.'s own footnotes, there is reference to the welding-machine contractor from Lebanon, "unwilling to accept the 10% deduction"; likewise the Belgian and Jordanian suppliers of medicine, both refusing a "10% reduction." In other cases there is a vaguer note, such as the Russian backhoe supplier, who "refused to accept extra fee deduction." Or the supplier of "fork lift and spares" from Belarus who "stated that the supply of remaining parts cannot be cost effective under the current circumstances." Asked to further explain these notations, an Oil-for-Food spokesman offers no comment except that all available information is already posted on the U.N. website.
Altogether, according to U.N. records, 728 previously approved and funded deals were "removed from the list of amendable contracts," a few because the supplies had already been delivered, but many because the contractors appear to have run for the hills. For instance, there's the Jordanian supplier of school furniture, whose contract was dropped during the U.N.'s post-Saddam frenzy of "prioritization" because the "Company does not exist and the person in charge moved to Egypt." Or the Russian supplier of "vehicle spare parts," who "could not be contacted despite all efforts." Or the Algerian seller of "adult milk" who "has no interest in renegotiation"; the Egyptian seller of "generator" for educational purposes, who "is not enthusiastic about proceeding with the amendment"; the Syrian seller of "laboratory equipment" who is "not possible to contact."
Another 762 contracts set aside indefinitely by the U.N., post-Saddam because of their "questionable utility" were deals for goods that sound handy and humanitarian enough on the generic U.N. face of it. These include medicine from China; sugar and ambulances from Egypt; laboratory materials and medical equipment from France; educational materials from Pakistan; wheat, medical equipment, and ambulances from Russia; and yet more wheat, from Saudi Arabia. One has to wonder if the revised assessment of utility lay in the nature of the goods described, or in the actual terms of the contracts previously blessed by the U.N.
It's commendable that the U.N., facing imminent handover of the program, tried to clean up the remaining contracts. It is plausible, perhaps, that no one at the U.N. knew of the links between Kofi Annan's son, Kojo, and the firm monitoring Iraq's U.N.-approved imports, Cotecna, and that these ties had no bearing on a massively corrupt program. It is possible that only after Saddam fell did anyone among the 1,000 or so U.N. international staff administering Oil-for-Food, or Sevan, or Kofi Annan, notice that they'd been approving Saddam's deals with suppliers that were, in various combinations, paying kickbacks, hard to contact, or even, as in the case of the Jordanian school-furniture contractor, nonexistent.
But what has to be clear by now is that the U.N. itself was either corrupt, or so stunningly incompetent as to require total overhaul. There are by now enough questions, there has been enough secrecy, stonewalling, and rising evidence of graft all around the U.N. program in Iraq, so that it is surely worth an independent investigation into the U.N. itself — and Annan's role in supervising this program. If Kofi Annan will not exercise his authority to set a truly independent inquiry in motion, it is way past time for the U.S., whose taxpayers supply about a quarter of the U.N. budget, to call the U.N. itself to account for Oil-for-Food — in dollar terms the biggest relief operation it has ever run, and by many signs, one of the dirtiest."
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More on the Oil for Penthouses program:
"March 11, 2004
AFTER THE WAR
The Oil-for-Food Scandal
The program was corrupt. The U.N. owes the Iraqis--and Congress--an explanation.
BY THERESE RAPHAEL
Thursday, March 11, 2004 12:01 a.m. EST
"If there is evidence, we would investigate it very seriously," Kofi Annan insisted last month when presented with allegations that U.N. officials knew about and may have benefited from Saddam Hussein's corruption of the U.N.'s Oil-for-Food Program. Fortunately, Saddam appears to have been a stickler for record-keeping.
A letter has come to The Wall Street Journal supporting allegations that among those favored by Saddam with gifts of oil was Benon Sevan, director of the U.N.'s Oil-for-Food Program. As detailed on this page on Feb. 9, Mr. Sevan's name appears on a list of individuals, companies and organizations that allegedly received oil allocations or vouchers from Saddam that could then be sold via middlemen for a significant markup. The list, compiled in Arabic from documents uncovered in Iraq's oil ministry, included many of Saddam's nearest and dearest from some 50 countries, including the PLO, pro-Saddam British MP George Galloway, and French politician Charles Pasqua. (Messrs. Galloway and Pasqua have denied receiving anything from Saddam.) According to the list, first published by the Iraqi daily Al Mada in January, Mr. Sevan was another beneficiary, via a company in Panama known as Africa Middle East Petroleum, Co. Ltd. (AMEP), about which we have learned quite a bit.
Mr. Sevan, through a U.N. spokesperson, has also denied the allegation. But the letter, which two separate sources familiar with its origins say was recovered from Iraqi Oil Ministry files, raises new questions about Mr. Sevan's relationship with Iraqi authorities.
The letter is dated Aug. 10, 1998, and addressed to Iraq's oil minister. It states: "Mr. Muwafaq Ayoub of the Iraqi mission in New York informed us by telephone that the above-mentioned company has been recommended by his excellency Mr. Sevan, director of the Iraqi program at the U.N., during his recent trip to Baghdad." The matter is then recommended "for your consideration and proportioning" and the letter is signed Saddam Zain Hassan, executive manager of the State Oil Marketing Organization (SOMO), the Iraqi state-owned company responsible for negotiating oil sales with foreign buyers. A handwritten note below the signature confirms the request was granted "by his excellency the Vice President of the Republic [presumably Taha Yassin Ramadan, now in U.S. custody] in a meeting of the Command Council on the morning of Aug. 15, 1998." Scrawled below that to one side is another note stating that 1.8 million barrels were allocated to the company two days later, on Aug. 17.
A second document shown to the Journal is a chart in Arabic with the heading "Quantity of Oil Allocated and Given to Mr. Benon Sevan." The Oil-for-Food program was divided into 13 phases in all, representing roughly six-month periods from December 1996 through June 2003. Under phase four (during which the letter was written), the chart shows 1.8 million barrels as having been allocated to Mr. Sevan and 1,826 million barrels "executed." In some phases the chart indicates that an oil allocation was approved but no contract was executed for some reason, so that the total allocation awarded to Mr. Sevan in phases four through 13 is 14.2 million barrels, of which 7.291 million were actually disbursed, according to the document.
Mr. Sevan could not be reached for comment on the letter, but did issue a denial in response to our Feb. 9 article. "There is absolutely no substance to the allegations . . . that I had received oil or oil monies from the former Iraqi regime," he said through a spokesman. "Those making the allegations should come forward and provide the necessary documentary evidence." The denial notwithstanding, the documents raise enough questions to warrant an investigation by the U.N., as well as by outside investigators, including the U.S. Congress. (A U.N. spokesman said yesterday that Mr. Sevan is on extended vacation until late April, after which he retires at the month's end.)
There is no doubt that the U.N. relief effort in Iraq has been a global scandal. A monstrous dictator was able to turn the Oil-for-Food program into a cash cow for himself and his inner circle, leaving Iraqis further deprived as he bought influence abroad and acquired the arms and munitions that coalition forces discovered when they invaded Iraq last spring.
A U.N. culture of unaccountability is certainly also to blame. And Security Council members share responsibility for lax oversight, no doubt one reason there is so little appetite for an investigation.
But Saddam's ability to reap billions for himself, his cronies and those who proved useful to him abroad depended on individuals who were his counterparties. These deserve a full investigation if the U.N.'s credibility is to be restored and its role in Iraq and elsewhere trusted. Especially now, with the U.N. taking a more active role in Iraq, it's time we knew more about how the oil-for-food scandal was allowed to happen."
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More on Kerry and his problematic mouth.
"As Roger Simon notes, the democratic resistance to the Iranian mullarchy is also trying hard. It would be nice if, in between the death threats and the unsubstantiated charges of corruption, Senator Kerry could find the time to offer some support for these brave democratic movements. Isn't he the candidate of the Democratic Party?"
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