An Inquiry on the U.N. Iraq Oil-for-Food Programme

September 6, 2006

The Institute for International Law and Justice invited f our members of the Oil-for-Food independent inquiry committee talk about their investigation and whether the United Nations is simply too corrupt and chaotic to handle humanitarian crises.

As Secretary General Kofi Annan’s tenure is nearing its end, the Oil-for-Food scandal that took place under his watch remains a large and throbbing black eye on the United Nations. But seeing the scandal as an opportunity to improve the member organization’s oversight, discipline and accountability, four members of the independent review committee formed to investigate the program came to the Law School to share their recommendations and express cautious optimism that the U.N. will in the future be able to carry out large humanitarian efforts with greater transparency and trust.

Back in 1995, the U.N. created the Oil-for-Food Program to alleviate the Iraqi people’s profound misery and famine caused by the tough economic sanctions imposed on the nation after Saddam Hussein’s 1990 invasion of Kuwait. The deal allowed Iraq to sell its oil in the global marketplace but prevented it from using the revenue for military purposes. Over the next eight years, $110 billion in oil sales was used to pay for food, medicine and other humanitarian aid for the Iraqi people.

But by 2003, the program was scuttled after allegations of deep and widespread corruption that rose to the highest levels of U.N. administration, even Annan’s own son. Charges included $1.8 billion in kickbacks to the Iraqi government, unchecked smuggling that amounted in $8.4 billion in profits to Hussein and lucrative insider contracts for companies in favor with the Iraqi dictator’s regime.

“Oil for Food was the biggest humanitarian program since the Marshall Plan,” said Paul Volcker, the former chairman of the U.S. Federal Reserve who became the chairman of the $30 million, 75-member Independent Inquiry Committee that Annan created to investigate the corruption. Adding that it was also the largest program ever undertaken by the U.N., he wondered aloud, “Is it up to the task?” The bottom line, according to Volcker, was to determine whether the U.N. was simply too chaotic and corrupt to claim authority when it came time to handle crises. Judge Richard Goldstone, formerly of South Africa’s Constitutional Court and another committee member, noted, “Crucially important in any organization of this size is a culture of discipline and accountability.”

Both elements were revealed to be sorely missing at the U.N. Attorneys Mark Califano and Jeffrey Meyer, members of the committee who have just published a book, Good Intentions Corrupted: The Oil for Food Scandal and the Threat to the U.N., based on the 18-month inquiry, said no external oversight had existed at the U.N. Loose globalized markets and no mechanism for the U.N. to control to whom Iraq sold oil and bought food from led to rampant insider deals and corruption. Despite the fact that surely the U.N. recognized Saddam Hussein to be a despot and dictator, said Meyer, “there was no anticipation of problems.”

The investigation shined a harsh light on the inadequacies of the United Nations’ administrative infrastructure—specifically in regard to the Security Council. For instance, two of the council’s most powerful members, China and the U.S., could not agree on the nationalities of the oil contracts supervisors. The 15-member council issued loose warnings upon learning of the kickbacks, and never sent a letter of inquiry to Syria when its pipeline was reopened in order to smuggle oil with Iraq.

The two most critical recommendations made by the committee were for an Independent Oversight Board with the full power to audit staff, budget, account practices and inspection services, and for a Chief Operating Officer, appointed by the General Assembly, to be in charge of administrative programs and procedural issues. Since the official report’s release, Annan has spearheaded the establishment of an ethics division, called for greater protection for whistleblowers and encouraged more transparent financial disclosure. External audits and ongoing investigations were also put into place.

Simon Chesterman, outgoing executive director of the Institute for International Law and Justice, which organized the event, said, “I might be one of the only people who thinks the Oil-for-Food scandal is one of the best things that’s ever happened to the U.N.” Only the next secretary-general can prove Chesterman correct.

By Graham Reed