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Oil-for-Food Inquiry: Major Flaws in UN Management

Oil-for-Food Inquiry Cites Major Flaws in U.N. Management

U.S. Ambassador John Bolton says inquiry must be catalyst for reform

By Judy Aita
Washington File United Nations Correspondent

United Nations -- Responsibility for the failures and corruption in the Oil-for-Food Program must be shared broadly among the United Nations secretariat, the Security Council and U.N. member states, the chairman of the Independent Inquiry Committee investigating the program said September 7.

Paul Volcker, chairman of the inquiry, said that in setting up the program "too much initiative was left with Iraq. It was ... a compact with the devil and the devil had means of manipulating the program to his ends."

Volcker appeared before an open meeting of the Security Council as the inquiry released its fourth and most comprehensive report to date in its 18-month investigation. (See

The report detailed -- in 1,035 pages spread over five volumes -- the managerial weaknesses of the secretariat, politicization of decision-making within the Security Council, and ethical lapses of individual employees, as well as the effect of the program on the Iraqi people.

"Our assignment has been to look for mis- or mal-administration in the Oil-for-Food Program and for evidence of corruption within the U.N. organization and by contractors. Unhappily we found both," he said.

"In essence, the responsibilities for the failures must be broadly shared starting, we believe, with member states and the Security Council itself. In the first place, the program left too much initiative with Iraq," Volcker said.

Secretary-General Kofi Annan said that "the report is critical of me personally, and I accept the criticism" for both the implementation of the program and the general functioning of the secretariat.

The findings "must be deeply embarrassing to all of us," Annan said. "The Inquiry Committee has ripped away the curtain and shone a harsh light into the most unsightly corners of the organization. None of us -- member states, secretariat, agencies, funds or programs -- can be proud of what it has found."

But, the secretary-general also used the occasion to press member states to make some tough decisions on reform. He pointed out that the findings underscore "the vital importance of proposed management reforms, many of which are at this very minute being negotiated by members in the General Assembly" as part of the final document for the upcoming 60th Anniversary Summit.

Reform is imperative if the United Nations is to regain and retain the measure of respect among the international community that its work requires, he said, adding that the summit will give world leaders "a golden opportunity to enact such reform."


U.S. Ambassador John Bolton said that the United States will review the report with one principal purpose in mind: to see how the findings and recommendations can be used to reform and improve the United Nations.

"Identifying those who failed to execute their responsibilities is a necessary part of the process; prosecuting wrongdoers is equally necessary," Bolton said. "But what is most important is to consider the shortcomings of the Oil-for-Food Program as a catalyst for change at the United Nations."

Although the United States may or may not agree with all the findings, the U.S. ambassador said, "what we can all agree upon is that Saddam Hussein exploited the good will of the international community toward the people of Iraq ... in order to obtain billion of dollars for his personal use and for the use of his regime to strengthen his authoritarian grip on his own people."

Bolton said that the United States has been pressing for greater auditing and management controls but has been meeting resistance from "dozens of countries who are in a state of denial, which contend that 'business as usual' at the U.N. is fine."

"We need to reform the U.N. in a manner that will prevent another Oil-for-Food scandal. The credibility of the U.N. depends on it," Bolton said.

Reform is expected to be a key topic in the next session of the General Assembly. For additional information, see The United Nations at 60.


The report cited "the politicization of decision-making, the managerial weaknesses, the ethical lapses" as symptomatic of "systemic problems in United Nations administration."

The basic difficulty was compounded by a failure to clearly define the complex administrative responsibilities shared between the Security Council's Sanctions Committee, also known as the 661 Committee, and the secretariat and by continuing political differences, Volcker said.

"The result was no one seemed clearly in command. Delays in or evasion of decision-making was chronic," he said. The United Nations "was not up to the extraordinary challenge" presented by the huge and complex program.

"Sadly those weaknesses were aggravated by unethical and corrupt behavior at key points," he said, such as the head of the Iraq Program, Benon Sevan, who has been accused of taking bribes from Iraq, and the purchasing department, where one official already has been indicted for soliciting bribes.

Volcker described a litany of problems within the United Nations. He said that the organization lacked effective auditing and administrative controls and had weak planning processes, inadequate funding and too few professional staff members.

"The absence of a truly independent status for the auditing and control functions was a critical deficiency," he said.

Other committee members in addition to Volcker, who is a former chairman of the U.S. Federal Reserve System, are Justice Richard Goldstone of South Africa, who was the first chief prosecutor of the U.N. international criminal tribunals for the former Yugoslavia and Rwanda, and Mark Pieth of Switzerland, a University of Basel professor of criminal law and criminology with expertise in international bribery and money laundering. They are assisted by a staff of experts from 28 nations.

The Oil-for-Food Program, which started in 1996 and ended in November 2003 when it was handed over to the Coalition Provisional Authority, was intended to allow Iraq to sell oil under U.N. supervision with the proceeds to be used primarily for humanitarian supplies for Iraq civilians and reparations to victims of Iraq's invasion of Kuwait.

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