Recent columns by Barbara Crossette:

Reducing Poverty Takes More Than Just Money (May 3, 2004)
"Poverty has so many other facets beyond what it takes to live from day to day.... Unless all countries and international financial institutions look at the big picture, people in developing countries don't stand a chance of significant gains."

Losing Faith In Democracy: A Warning From Latin America (April 26, 2004)
"The publication last week of an alarming report ... from Latin America will only confirm for many that the euphoria of the early 1990s over the spread of democracy is now history."

Oil-For-Food: Where Was the Security Council? (April 19, 2004)
"Some U.N. officials may have been complicit in Saddam Hussein's illegal profiteering from the 'oil-for-food' program that sustained Iraqi civilians from 1997 until last November."

Corruption's Threat to Democracy (April 12, 2004)
"In March Transparency International released a list of ten top corrupt leaders of the last quarter century. Except for Ukraine and Yugoslavia, all were in Africa, Asia and Latin America."

The UN's Real Blunder in Iraq (April 7, 2004)
"It has been demonstrated that irresponsibility, a lack of integrity, and a careless inattention to duty can, tragically, carry a deadly price."

Sri Lanka on the Edge Again (March 29, 2004)
"This relatively small island nation will hold an election Friday that many Sri Lankans believe will decide whether ethnic conflict is really over or has only paused before plunging into a disastrous new phase."

More from U.N. Notebook.


U.N. Notebook | May 10, 2004
 
from U. N. Wire No Simple Place to Pin Blame for Iraq Oil-For-Food Problems

by Barbara Crossette
 
....

UNITED NATIONS—The U.S. General Accounting Office, the investigative branch of Congress whose reports about alleged Iraqi corruption in the oil-for-food program are widely quoted by critics of the United Nations, has been tempering its observations lately. In the process, the GAO is also documenting what a shambles the U.S. made of the program after it took over the program in November, and warning that the new Iraq must be watched closely or history will repeat itself.

In April 28 testimony to the House of Representatives Committee on International Relations, the GAO's director of international affairs and trade, Joseph A. Christoff, produced a more detailed and nuanced account than before of how the oil-for-food program was conceived and run. It makes clear that responsibility for policing it was shared by the Security Council and the U.N. Secretariat's Office of the Iraq Program, which managed the operation allowing Iraq to sell oil to buy civilian goods.

The guiding voice in the Security Council on Iraq in those critical years was the United States.

While the latest GAO testimony covers much of the same ground as its earlier reports in 2002 and early April 2004 and sticks with the estimate that $10.1 billion was illegally acquired by the Iraqis—$5.7 billion in oil smuggling outside U.N. control and $4.4 billion in surcharges and illicit commissions on Iraqi contracts for civilian imports—the congressional watchdog acknowledged that the United Nations' own auditors and investigators were often aware of these activities and that officials of the program were "responsive" to warnings.

The Security Council, however, chose to do nothing.

There is corroborating evidence. A former chairman of the Iraq sanctions committee, Peter van Walsum of the Netherlands, said recently that Benon Sevan, the director of the Iraq program, raised the question of illegal payments in the council at least twice before giving up in the face of big-power indifference. Sevan is now being pilloried by U.S. conservatives who accuse him of being part of the corruption and, apparently, by Ahmed Chalabi, the increasingly discredited Iraq exile leader who stands to lose even more ground with the return of the United Nations to Iraq.

In the Security Council sanctions committee, the United States focused only on making sure that the Iraqis were not buying anything that could be funneled into arms manufacturing. Oddly inflated prices on goods, with the obvious built-in possibilities for corruption, were allowed to pass.

Here is what the GAO testimony reiterated on April 28: "A primary function of the sanctions committee was to review and approve contracts for items that could not be used for military purposes. The United States conducted the most thorough review; about 60 U.S. government technical experts assessed each item in a contract to determine its potential military application. According to U.N. Secretariat data in 2002, the United States was responsible for about 90 percent of the holds placed to goods to be exported to Iraq. As of April 2002, about $5.1 billion worth of goods were being held for shipment to Iraq. According to OIP [Office of the Iraq Program] no contracts were held solely on the basis of price."

Contrary to accusations that the United Nations missed abuses, the GAO says now that 59 audits of the program were ordered by the Office of Internal Oversight Services (the organization's inspector general) between 1996 and 2003, with four still ongoing. Summaries of seven reports "identify a variety of operational concerns involving procurement, inflated pricing and inventory controls," the GAO said. The inspectors were also critical of too little coordination and review of projects in Iraq. There was, in other words, no official cover-up.

Now we come to the current mess.

By the time the United Nations turned over the oil-for-food program to the Coalition Provisional Authority in November 2003, U.N. officials had renegotiated contracts where illicit charges had been added by the regime of Saddam Hussein, the GAO says. At the turnover, 3,059 contracts were still in effect, worth $6.2 billion. The program had helped 24 million Iraqis—60 percent of whom depended on it as their main source of food—increase their nutritional intake from an average of about 1,275 calories a day to about 2,229 by the end of 2001. Malnutrition rates for children under age 5 were cut in half.

When the Americans took over the running of the program in November 2003, a coordination center was set up n Baghdad with the promise of a staff of 48, plus Iraqis brought in from various ministries. By mid-December, the GAO says, there were only 19 CPA officials there, and 18 of them were due to leave in January. In March, the number of CPA officials in the center rose to 37, but that dropped to 16 in April. A Baghdad coordination center official told the GAO that "inadequate staffing continued to hamper the CPA's ability to ensure that oil-for-food deliveries continue without disruption," the GAO said. The GAO was told that the coalition's "failed plans to privatize the food distribution system" and delays in reaching agreement with the World Food Program over its role in administration led to shortages of food.

In December last year, in what can now be seen as part of a pattern of reversals, Paul Bremer, the U.S. administrator in Iraq, abandoned an earlier plan to provide cash payments instead of food. That turnabout, coming during increased violence and after virtually all U.N. officials were withdrawn from Iraq, dealt food procurement and distribution a serious blow.

By then, coalition officials and the United Nations were trading charges about documentation. The coalition said that the U.N. contract data was incomplete and laced with errors in mathematics and currency conversions. The United Nations says that the coalition lost or misplaced some relevant compact data disks. A senior official at the world body told the GAO that only one junior coalition staff member was sent to the United Nations to be trained (and for only three or fours days) on the complex data base stretching over years of contract history.

The Iraqi Trade Ministry took over food procurement on April 1, but its relations with the World Food Program have not been good, the GAO said, though the State Department says they are improving. The WFP staff in Baghdad and Jordan reported "large, sudden and unexplained stock adjustments" in the ministry's data. So what is new?

The GAO, which has been fair and nonpartisan in its reports involving the United Nations in recent years, is wisely keeping its eye on the ball again this time. It welcomed more investigations, the most prominent one by a U.N.-appointed commission to be led by Paul Volcker, the former Federal Reserve chairman. The GAO's message: Learn from the past but keep watching Iraq.

"The history of inadequate oversight and alleged corruption in the oil-for-food program," it says, "raises questions about the Iraqi government's ability to manage the import and distribution of oil-for-food commodities and the billions in international assistance expected to flow into the country." Business as usual cannot be allowed to return to Iraq.


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More on foreign affairs in Atlantic Unbound and The Atlantic Monthly.

Barbara Crossette, a writer on foreign affairs and columnist for U.N. Wire, was The New York Times bureau chief at the United Nations from 1994 to 2001. U.N. Wire is a free daily online news service covering news about and related to the United Nations. It is sponsored by the U.N. Foundation and appears on the foundation site, but is produced independently by The National Journal Group. For information on National Journal Group publications, see NationalJournal.com.

Copyright © 2003 by The Atlantic Monthly Group. All rights reserved.