New York Post
January 19, 2005
So much for former Federal Reserve Board Chairman Paul Volcker’s sug gestion that there is no truly sub stantive corruption to be found in the United Nations’ corruption-plagued Oil-for-Food program.
Volcker, hired months ago by Secretary-General Kofi Annan to look into the scandal, had this to say last week: “There’s no flaming red flags in this stuff.”
Alas, federal prosecutors yesterday made public their first conviction in the Oil-for-Food program – further shredding Volcker’s once-estimable reputation and making it crystal clear that the clock is ticking on Kofi Annan as well.
Samir Vincent, an Iraqi-American, pled guilty to charges he took between $3 million and $5 million in oil vouchers from Saddam Hussein while working as the dictator’s agent in New York.
Vincent now faces up to 28 years in prison – a potentially harsh sentence certain to be mitigated if he continues to cooperate with the feds.
Doubtless he has much to say; his ties to Saddam go back to 1992, and he helped draft the Oil-for-Food program – which guaranteed himself and others millions in under-the-table compensation in return for working to end sanctions.
In a series of recently released audits, Volcker and the investigating committee he heads found widespread waste and mismanagement – but no signs of overt corruption.
But outgoing U.S. Attorney General John Ashcroft disclosed that Iraq skimmed “at least several hundred million dollars” by handing out oil vouchers to politically connected individuals – many of whom had no connection or experience in the oil business.
Many of those people – including Samir Vincent – were able to resell the vouchers to oil companies for a tidy sum, with the understanding that a hefty percentage was kicked back to Saddam Hussein’s treasury. Vincent’s Phoenix Group, for example, handled sales totaling $162 million.
“Many millions of barrels and millions of dollars were involved,” said Ashcroft.
That’s putting it mildly: U.S. weapons inspector Charles Duelfer has estimated that Saddam pocketed fully $8 billion skimmed from the program; congressional investigators say the figure may run as high as $13 billion.
And that money, as Duelfer noted, was “a key turning point” for Saddam – allowing him to undermine sanctions and purchase weapons materials.
And it was working: By the time the U.S. invaded Iraq in 2003, Duelfer reported, the sanctions regime “was in a shambles.”
As for names high up in the United Nations bureaucracy, the Justice Department remains mum. But the investigation is continuing – and, most important, Vincent is cooperating.
The program, of course, was meant to provide emergency humanitarian relief for starving Iraqis.
Instead, it turned into a global money-laundering scheme
Which is one reason why skepticism is in order regarding a new report – generated by a U.N. team – which calls for a doubling of international aid over the next 10 years to alleviate global poverty.
To be sure, there are other problems with the recommendation: Many poorer nations simply wouldn’t be able to handle a massive influx of funds; a more modest program might work but even that isn’t clear.
What is clear beyond doubt it that any scheme by which the United Nations gets an additional dime is insane on its face.
Exhibit A is the Oil-for-Food rip-off.
Beyond that, bitter experience has demonstrated that aid programs under U.N. auspices are a prescription for monumental waste and corruption – the most recent example being the conduct of U.N. peacekeepers in Congo.
Secretary-General Annan has tried to send a signal of change by promising to remake the world body’s secretariat.
But the secretary-general retains no credibility whatsoever.
He’s going to be gone anyway after the federal prosecutors finish their work. He needs to pull the plug on his own – now.