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Oil, Food and a Whole Lot of Questions
New York Times ^ | April 18, 2003 | CLAUDIA ROSETT

Posted on 04/18/2003 3:58:00 AM PDT by wretchard

Oil, Food and a Whole Lot of Questions

By CLAUDIA ROSETT

President Bush's call to lift economic sanctions against Iraq could mean the end of the United Nations oil-for-food program, which has overseen the country's oil sales since 1996. Not only are France and Russia likely to object, but they may well support efforts by Secretary General Kofi Annan to modify the oil-for-food system, which is due to expire on May 12, and give it a large role in rebuilding the country. Whatever Mr. Annan's reasons for wanting to reincarnate the operation, before he makes his case there's something he needs to do: open the books.

The oil-for-food program is no ordinary relief effort. Not only does it involve astronomical amounts of money, it also operates with alarming secrecy. Intended to ease the human cost of economic sanctions by letting Iraq sell oil and use the profits for staples like milk and medicine, the program has morphed into big business. Since its inception, the program has overseen more than $100 billion in contracts for oil exports and relief imports combined.

It also collects a 2.2 percent commission on every barrel — more than $1 billion to date — that is supposed to cover its administrative costs. According to staff members, the program's bank accounts over the past year have held balances upward of $12 billion. With all that money pouring straight from Iraq's oil taps — thus obviating the need to wring donations from member countries — the oil-for-food program has evolved into a bonanza of jobs and commercial clout. Before the war it employed some 1,000 international workers and 3,000 Iraqis. (The Iraqi employees — charged with monitoring Saddam Hussein's imports and distribution of relief goods — of course all had to be approved by the Baath Party.)

Initially, all contracts were to be approved by the Security Council. Nonetheless, the program facilitated a string of business deals tilted heavily toward Saddam Hussein's preferred trading partners, like Russia, France and, to a lesser extent, Syria. About a year ago, in the name of expediency, Mr. Annan was given direct authority to sign off on all goods not itemized on a special watch list. Yet shipments with Mr. Annan's go-ahead have included so-called relief items such as "boats" and boat "accessories" from France and "sport supplies" from Lebanon (sports in Iraq having been the domain of Saddam's Hussein's sadistic elder son, Uday).

On Feb. 7, with war all but inevitable, Mr. Annan approved a request by the regime for TV broadcasting equipment from Russia. Was this material intended to shore up the propaganda machine Saddam Hussein had built in recent years? After all, the United Nations in 2000 and 2001 approved more than a dozen contracts with Jordan and France for Iraq to import equipment for "educational TV."

It is impossible to find out for certain. The quantities of goods involved in shipments are confidential, and almost all descriptions on the contract lists made public by the United Nations are so generic as to be meaningless. For example, a deal with Russia approved last Nov. 19 was described on the contract papers with the enigmatic notation: "goods for resumption of project." Who are the Russian suppliers? The United Nations won't say. What were they promised in payment? That's secret.

I was at least able to confirm that the shipment of Russian TV equipment approved in February was not delivered before the war started. A press officer told me that batch didn't actually get to Iraq because United Nations processing is so slow that "it usually takes three to four months" before the purchases start to arrive.

Bureaucratic lags notwithstanding, putting a veil of secrecy over tens of billions of dollars in contracts is an invitation to kickbacks, political back-scratching and smuggling done under cover of relief operations. Of course, with so little paperwork made public, it is impossible to say whether there has been any malfeasance so far — but I found nothing that would seem to contradict Gen. Tommy Franks's comment that the system should have been named the "oil-for-palace program." Why, for example, are companies in Russia and Syria — hardly powerhouses in the automotive industry — listed as suppliers of Japanese vehicles? Why are desert countries like Libya, Syria and Saudi Arabia delivering powdered milk?

And then there is this menacing list of countries that supplied "detergent": Syria, Lebanon, Libya, Algeria, Yemen and Sudan. Maybe all that multisourced soap was just a terrific bargain for doing the laundry. But there is no way for any independent parties — including the citizens of Iraq, whose money was actually spent on the goods — to know.

Mr. Annan's office does share more detailed records with the Security Council members, but none of those countries makes them public. There is no independent, external audit of the program; financial oversight goes to officials from a revolving trio of member states — currently South Africa, the Philippines and, yes, France.

As for the program's vast bank accounts, the public is told only that letters of credit are issued by a French bank, BNP Paribas . Kurdish leaders in northern Iraq, entitled to goods funded by 13 percent of the program's revenues, have been trying for some time to find out how much interest they are going to receive on $4 billion in relief they are still owed. The United Nations treasurer told me that that no outside party, not even the Kurds, gets access to those figures.

Then there is the program's compensation commission, which is supposed to dole out 25 percent of all oil-for-food proceeds to people and companies harmed by Saddam Hussein's invasion of Kuwait in 1990. It has so far dispensed $17.5 billion and approved a further $26.2 billion. Who decides on compensation claims? Commission members are picked from a "register of experts" supplied by Mr. Annan. One staff member told me that that this register cannot be released because it is "not public." The identities of the individual claimants are, of course, "confidential."

Lifting the sanctions would take away the United Nations' remaining leverage in Iraq. If the oil-for-food operation is extended, however, it will have a tremendous influence on shaping the new Iraq. Before that is allowed to happen, let's see the books.

Claudia Rosett, a former foreign correspondent for The Wall Street Journal, is writing a book on dictatorships and democracy.


TOPICS: Foreign Affairs
KEYWORDS: iraq; iraqifreedom; moneytrail; oilforfood; postwariraq; sanctions; un
This opens a can of worms. Kofi Annan and France had a vested interest in continuing the sanctions. The unspoken question is: will the new Iraqi government have the right to demand an accounting from Kofi Annan? Or is the UN morally above having to answer any questions.
1 posted on 04/18/2003 3:58:00 AM PDT by wretchard
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To: wretchard
The arrogant Axis Of Weasels are above everything. The UN is their toy and Kofi Annan is their puppet.
2 posted on 04/18/2003 3:59:38 AM PDT by goldstategop ( In Memory Of A Dearly Beloved Friend Who Lives On In My Heart Forever)
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To: wretchard
Dang good piece!
3 posted on 04/18/2003 4:07:07 AM PDT by aBootes
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To: wretchard
It also collects a 2.2 percent commission on every barrel — more than $1 billion to date — that is supposed to cover its administrative costs. According to staff members, the program's bank accounts over the past year have held balances upward of $12 billion. With all that money pouring straight from Iraq's oil taps — thus obviating the need to wring donations from member countries — the oil-for-food program has evolved into a bonanza of jobs and commercial clout. Before the war it employed some 1,000 international workers and 3,000 Iraqis. (The Iraqi employees — charged with monitoring Saddam Hussein's imports and distribution of relief goods — of course all had to be approved by the Baath Party.)

Ah ha. Now the truth comes out. You gotta love the Baath Party members overseeing Saddam's imports and distribution of relief goods.

4 posted on 04/18/2003 4:18:05 AM PDT by fightinJAG (A liberal mind already is terribly wasted.)
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To: aBootes
Took them long enough, didn't it? Wonder what's about to break that the Times is desperately trying to get ahead of...
5 posted on 04/18/2003 4:23:38 AM PDT by mewzilla
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To: wretchard
Annan is truly Earth's Terrorist-in-Chief, who also supports slavery, antiSemitism, and murderers of Americans.

Who cares what the terrorist thinks -- or his old Europe enablers.

6 posted on 04/18/2003 4:25:37 AM PDT by Diogenesis (If you mess with one of us, you mess with all of us.)
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To: mewzilla
Note to the NYT: Other papers, click here for just one example have been following this for a while now.
7 posted on 04/18/2003 4:26:13 AM PDT by mewzilla
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To: wretchard
On Feb. 7, with war all but inevitable, Mr. Annan approved a request by the regime for TV broadcasting equipment from Russia. Was this material intended to shore up the propaganda machine Saddam Hussein had built in recent years? After all, the United Nations in 2000 and 2001 approved more than a dozen contracts with Jordan and France for Iraq to import equipment for "educational TV."

Was Baghdad Bob supplied by the UN?....Hmmm....questions remain unanswered.

8 posted on 04/18/2003 4:30:09 AM PDT by wayoverontheright (Bwahahahahahahaha!!!!!!!!!!!!!!!)
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To: wretchard
... which is due to expire on May 12 ...
How convenient. Problem solved. We simply allow the program to expire, and veto any attempt to renew it.
9 posted on 04/18/2003 4:33:12 AM PDT by Asclepius (to the barricades)
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To: wretchard
*DUMP* a BUMP ! on the UN !
10 posted on 04/18/2003 4:34:45 AM PDT by ex-Texan (primates capitulards toujours en quete de fromage!)
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To: wretchard
Not mentioned was the issue of "smuggled oil". US and other countries provided Navy warships in the gulf to search for oil being smuggled out of Iraq outside the oil for food program.

What oil they found was confiscated, sold on the open market, with the proceeds going to the UN. To the best of my knowledge, the US and other countries just "donated" the warships and manpower.

11 posted on 04/18/2003 4:36:20 AM PDT by snopercod
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To: wayoverontheright
modify the oil-for-food system, which is due to expire on May 12,

NO WONDER THE USELSESS NATIONS & AXIS OF WEASELS ARE SO HOT TO TROT!

12 posted on 04/18/2003 4:42:03 AM PDT by GailA (Millington Rally for America after action http://www.freerepublic.com/focus/f-news/872519/posts)
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To: mewzilla
Despite some people's problems with what they see as the left-wing bias of the paper, the Times remains the best daily newspaper in America for in depth reporting.

Here in NY we're lucky enough to also have the Wall Street Journal (the best conservative newspaper), and the Village Voice (the best investigative newspaper that I know of in America). They are the ones that break almost all of the scandals here in NY and no one is spared because they're so left of the left that they go after left and right with equal glee if there's a scandal.

13 posted on 04/18/2003 4:46:50 AM PDT by sakic
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To: mewzilla
"Wonder what's about to break that the Times is desperately trying to get ahead of..."
----

May 12th for starters. The US is in the drivers's seat on this on because all we have to do is wait for the sun to set.

The interesting question is when did CNN, ooops, I mean the NYT know this and why did they wait till now to report it?
14 posted on 04/18/2003 4:50:57 AM PDT by konaice
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To: wretchard
The whole objection of the UN for us going in a ousting Saddam Hussein physically was about the UN getting caught skimming the food for oil, oil for cash, cash for Kofi skim program
and of course the weapons for cash programs that France Germany and Russia cashed in on..
15 posted on 04/18/2003 6:11:00 AM PDT by joesnuffy (Moderate Islam Is For Dilettantes)
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To: wretchard
What may be very interesting are future lawsuits by the new Iraq Government to recover any left over and miss spent funds against the UN, the French and Russians. Similar to the suits against the Swiss for the Jewish bank accounts. A full and compete accounting could be trouble for the UN.
16 posted on 04/18/2003 6:45:20 AM PDT by Lockbox
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To: sakic
What they see as left-wing bias?! Laddie, would ye care to rephrase that?
17 posted on 04/18/2003 6:47:39 AM PDT by mewzilla
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To: wretchard
Bump.
18 posted on 04/18/2003 10:51:18 AM PDT by Shermy
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To: wretchard
The Iraqi government, with its new representative in the UN, should demand that the books be opened.
19 posted on 04/18/2003 10:58:24 AM PDT by Shermy
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To: FilmCutter
Multi-episode Frontline expose on the Food for OIl program? Sounds good to me.
20 posted on 04/18/2003 10:59:03 AM PDT by Shermy
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To: wretchard; Asclepius
Same writer:

The Oil-for-U.N.-Jobs Program

21 posted on 04/18/2003 11:16:19 AM PDT by Shermy
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To: wretchard
follow the money trail,UN too???? hhmmmm.
22 posted on 04/18/2003 11:23:01 AM PDT by green team 1999
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To: mewzilla
Great link Mewz, you got more???
23 posted on 04/18/2003 11:58:52 AM PDT by Shermy
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To: Asclepius
... which is due to expire on May 12 ...

Watch out when that comes up...The French will fashion some other scheme, demand debt repayment from the UN holdings...Iraqi govt. should demand its money...and a full accounting and opening of the books.

24 posted on 04/18/2003 12:00:07 PM PDT by Shermy
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To: wretchard
UN Food for Oil stats THREAD
25 posted on 04/18/2003 12:36:10 PM PDT by GailA (Millington Rally for America after action http://www.freerepublic.com/focus/f-news/872519/posts)
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To: wretchard
That Claudia Rosett got this much of her research into the NYTimes is the story of the day (now yesterday) as far as I'm concerned.
26 posted on 04/18/2003 10:40:48 PM PDT by Poincare ((not a good time for a Frenchish screen name))
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To: mewzilla
Same author in that WSJ piece wrote the NYTimes editorial - Claudia Rosett.
27 posted on 04/25/2003 5:25:26 PM PDT by optik_b
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UN loot the cafeteria integrity bump
28 posted on 05/03/2003 3:32:03 PM PDT by Diddle E. Squat
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