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September 8, 2005

Despite Growing Scandal, UN Chief Refuses to Yield

by Jim Lobe

UNITED NATIONS - A beleaguered UN Secretary-General Kofi Annan Thursday stood his ground despite charges of corruption, inefficiency, and mismanagement of the $34 billion now-defunct Iraqi oil-for-food program run by the UN secretariat, which he administers.

Asked if there would be any resignations from within the organization over the strictures, Annan told reporters: "I don't anticipate anyone to resign. We are carrying on with our work."

The charges were spelled out in a voluminous report by the Independent Inquiry Committee (IIC), chaired by former U.S. Federal Reserve Chairman Paul Volcker, which criticized the UN secretariat, and faulted the 15-member Security Council mandated to oversee the politically-flawed program.

"Our assignment has been to look for mis- or maladministration in the oil-for-food program and for evidence of corruption within the UN organization and by contractors. Unhappily, we found both," Volcker told the Security Council Thursday.

The Volcker committee, which also included Richard Goldstone and Mark Pieth, was appointed in April last year at the initiative of Annan and with the support of the Security Council.

The committee was asked to probe the inner workings of the program, which was originally meant to provide humanitarian assistance and alleviate the suffering of more than 25 million sanctions-hit Iraqis.

"Clearly, there is another side to the story," Volcker said, "one of positive success" because the program averted "the clear and present danger of malnutrition and a further collapse of [Iraq's] medical services."

"That is no small achievement, especially when combined with the support the program provided for maintaining the basic sanctions against Iraq and its inability to obtain weapons of mass destruction," Volcker added.

Still, the main conclusions are unambiguous, he argued, pointing out that the United Nations "requires strong executive leadership, thoroughgoing administrative reform, and more reliable controls and auditing."

Annan said he was glad the committee had also reaffirmed an earlier conclusion that the secretary-general did not influence or attempt to influence the procurement process in the multi-billion program.

But Annan admitted he was "not diligent or effective enough" in pursuing an investigation after the fact, when he learned the Swiss company that employed his son Kojo Annan had won an inspection contract under the oil-for-food program. "I deeply regret that," he told reporters.

Still, Annan refused to be drawn into a debate over criticisms of his son who, according one published report, had purchased a luxury vehicle using his father's name to enjoy the tax-free privileges of a diplomat, and transferred it to a third country duty-free.

Asked if there is legal recourse the United Nations can seek against someone who falsely claims diplomatic immunity – as is alleged against his son – the secretary-general said: "I think that is something for the law enforcement people to look into it." However, Annan said that the evidence of actual corruption among a small number of UN staff is "profoundly disappointing for all of us who work for this organization."

Volcker said there was "a pervasive absence of effective auditing and administrative controls." Weak planning, sorely inadequate funding, and too few professional staff were all characteristic of the process.

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

As chief administrative officer of the United Nations, Annan said he has to take responsibility "for the failing revealed, both in the implementation of the program, and more generally, in the functioning of the secretariat."

Phyllis Bennis, a senior fellow at the Washington-based Institute for Policy Studies, said the secretary-general must not be viewed as the chief executive officer (CEO) of a worldwide corporation.

"The United Nations is based on principles, embodied in the UN Charter, that require its leadership, especially the secretary-general, to stand and defend its principles against those trying to force the United Nations to become part of illegal wars, to endorse illegal occupations, or to ignore looming genocides," Bennis told IPS.

"The recent attacks on the secretary-general, easier to attack than the institution as a whole, have little to do with the actual (and quite limited) instances of corrupt activities in the secretariat, and everything to do with Annan's statement that the U.S. war in Iraq was illegal and the organization's refusal to endorse the U.S.-UK invasion," said Bennis, author of Calling the Shots: How Washington Dominates Today's UN.

In criticizing the Security Council, Volcker said that the program left too much initiative with Iraq. As one former member of the Council put it, "It was a compact with the devil, and the devil had the means for manipulating the program to his ends."

"That basic difficulty was compounded by a failure to clearly define the complex administrative responsibilities," shared between the 661 Committee (of the Security Council which was entrusted with the task of monitoring the oil-for-food program) and the secretariat, "and by continuing political differences."

The result was "no one seemed clearly in command. Delays in, or evasion of, decision-making was chronic," Volcker said.

The loopholes in the program also permitted former Iraqi President Saddam Hussein to engage in a highly profitable smuggling of oil, which the Security Council chose to ignore.

Volcker also said there were "serious questions about the UN's ability to live up to its ideals."

"Certainly there are questions about the UN's ability to live up to its ideals. But those ideals have everything to do with the UN's independence and willingness to defy U.S. bullying, and defend its own Charter," said Bennis of the Institute for Policy Studies.

The United Nations showed its ability in the run-up to the Iraq war, when the international organization refused to join Washington's war train.

At that moment, she said, even the Security Council was part of the UN's defiance, itself part of the broader global defiance of people and governments around the world – but too often the Security Council stands as the main obstacle to the UN's fulfillment of its ideals.

When it said "no" to the U.S. war in Iraq, the United Nations did not become irrelevant, quite the contrary. But the moment of defiance, relevance and global significance was brief, and soon collapsed under U.S. pressure, Bennis said.

Indeed the Security Council has failed to define its own parameters and responsibilities. But the Council is also inherently flawed because of its structural lack of democracy – with the United States and four other permanent members (Britain, France, Russia, and China) able to veto anything they don't like, the Council's operations are a recipe for paralysis and failure.

Bennis said "the effect of the right-wing campaign in the United States has been to focus public and media attention on the alleged responsibility of the UN secretariat, especially Kofi Annan personally, in overseeing the oil-for-food program, rather than keeping the focus where it belongs, on the role of the United States and other Security Council member states."

U.S. Deputy Ambassador James Cunningham was the U.S. official who most often participated in the work of the 661 Committee, she pointed out. The United States and Britain routinely and publicly used their power on that committee to delay or cancel contracts based on their often-cited (though rarely substantiated) claim of "dual use" equipment, meaning potential military as well as civilian use.

But there are no publicized reports of a U.S. or British representative (or any other Council member) putting "holds" on a contract because of the widely-known practice (typical of the global oil industry) of kickbacks and surcharges.

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