Arab News
October 23, 2004

UN Secretary General Kofi Annan said the scandal around UN-supervised Iraqi oil sales under Saddam Hussein was hurting the image of the United Nations, as an independent body probing the program named 4,734 participating companies.

Under the program, which ran from December 1996 to November, 248 companies in several nations bought Iraqi oil in $64.2 billion worth of contracts, said the committee. And 3,545 companies exported goods worth $32.9 billion to southern and central Iraq, and 941 other companies exported $6.1 billion worth to northern Iraq, it said.

But the committee stressed that “participation in the oil-for-food program on either the import or export side does not in itself carry an implication of illicit, unethical or corrupt behavior.”

Paul Volcker, appointed by Annan to head the body, said the committee expected “to have a report toward the middle of next year,” and, “we will not make allegations along the way until we have completely determined the facts.” He added that “accusations of corruption within the UN is a priority,” and, “in general I think cooperation is pretty good.”

The oil-for-food scheme allowed Saddam’s regime to ease the burden of international sanctions by selling oil to buy humanitarian supplies. But it mushroomed into the largest aid scheme in UN history, and critics say Saddam abused the program by evading sanctions and offering vouchers for oil as bribes to hundreds of officials from different countries.

Among those under suspicion of having accepted payments from Saddam in return for support against the US-led war are businessmen and politicians in France and Russia, both permanent members of the UN Security Council.

But Annan has said he does not believe either country “sold their votes” on the council in order to thwart the war on Iraq.

“I find that very difficult to believe. If governments were to sell their votes because some of their companies . . . were to do business with Iraq or elsewhere, I think it would be a very sad state for the Security Council and for the world,” he said. “I do not believe it.”

Annan appointed Volcker, the former head of the US Federal Reserve banking system, to investigate the allegations published by a Baghdad newspaper in January.

Former oil-for-food chief Benon Sevan, whose name has emerged as a possible beneficiary of Saddam’s largesse, has denied any wrongdoing. UN officials privately have lashed out at conservative media in the United States for its coverage of the scandal, and Annan mentioned a “campaign” against the United Nations without giving further details.

“There is no doubt that the constant campaign and the discussions have hurt the UN,” Annan said. “It has done damage.”

Earlier, Annan defended discussing the progress of the investigation with Volcker.

“I set up that committee and I think it is appropriate that he talks to me about the release of his report,” Annan said.

“I don’t see anything wrong with that,” the UN chief said. “If you don’t talk to the person whom you set up, whom do you talk to?”

A New York newspaper meanwhile was reporting that Annan’s son, Kojo, is under investigation by a US prosecutor in connection with the oil program.

“I have read the same sort of things but I have no other information and I think it’s speculation,” Annan said of the report.