Rather long:
heritage.org
Excerpted:
The Volcker Report’s findings into Benon Sevan’s conduct while head of the OIP are damning. The Committee concluded that Sevan “solicited and received on behalf of AMEP (African Middle East Petroleum Co Ltd Inc) several million barrels of allocations of oil from 1998 to 2001. As a result of Mr. Sevan’s conduct, AMEP’s revenue – net bank fees and surcharge payment – totaled approximately $1.5 million.” The IIC declared that Sevan’s actions “presented a grave and continuing conflict of interest, were ethically improper, and seriously undermined the integrity of the United Nations.”[8]
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The UN’s decision to appoint the French company Banque Nationale de Paris (BNP) to administer the Oil-for-Food escrow account is the subject of intense scrutiny in the IIC Interim Report. Vast sums of money were handled through the escrow account. The Saddam Hussein regime sold more than $64.2 billion of oil under the Oil for Food Program between 1996 and 2003.[9] BNP was selected by then U.N. Secretary General Boutros Boutros-Ghali, even though the decision did not conform to the requirement under U.N. financial rules to accept the “lowest acceptable bidder”.[10]
The IIC Report demonstrates that several banks were better placed to manage the Iraq escrow account on the basis of their higher credit quality (based on IBCA ratings): Union Bank of Switzerland, Deutsche Bank, Credit Suisse, Citibank and Chase Manhattan.[11] The U.N. Treasury eventually opted for Credit Suisse as first choice to run the escrow account, but BNP was awarded the contract
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Key Omissions from the Volcker Interim Report
The Role of Kofi Annan
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The Lack of U.N. Oversight of the Office of the Iraq Program
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Attempts by Saddam Hussein to influence Security Council members
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Conclusions Regarding the Volcker Interim Report
The Independent Inquiry Committee Interim Report does a reasonably efficient job with regard to its narrow areas of focus. The IIC investigation into the activities of Benon Sevan have been detailed, and should rightly pave the way for a criminal prosecution. It has shed important light on the workings of the secretive Iraq Steering Committee, and has revealed political interference by a senior U.N. official in the procurement of U.N. contractors Saybolt and Lloyd’s Register.
Perhaps the most significant revelation in the Report is its conclusion that U.N. Secretary-General Boutros Boutros-Ghali personally selected the French Banque Nationale de Paris to handle the hugely important Iraq escrow account, which administered tens of billions of dollars. This despite the fact that BNP was not the best qualified bank to handle the task. Boutros Ghali is likely to be the subject of major investigation by Congress in the months to come.
While acknowledging that this is an interim report, published mid-way through the IIC’s investigation, it has to be said, however, that it goes to considerable lengths to avoid making broad-based hard hitting criticisms of the U.N. as an institution and the organization’s senior management. To say that the Volcker Interim Report has been soft on the United Nations as a world body as well as its leadership is an understatement. It is little surprise that the U.N.’s well oiled spin machine has begun already to downplay the wider significance of the report’s findings, and to laugh off suggestions that senior U.N. managers (with the exception of Sevan and another official Joseph Stephanides[25]) might actually be held accountable for the U.N.’s failings and be forced to step aside.
The complete lack of any criticism, or even mention, of U.N. Secretary General Kofi Annan, is a glaring omission that does not engender confidence in the Volcker Committee’s goal of producing “the definitive report” into the U.N.’s handling of the Oil-for-Food Program. Indeed, history has shown that few organizations are truly capable of investigating themselves in a thoroughly objective manner, and the United Nations is no exception. The willingness to give the U.N. the benefit of the doubt, and permit its head to pick his own ‘independent’ committee of investigation with a complete monopoly over documents and witnesses, may in future years be regarded as a huge error of judgment.
Part 2. The Independent Inquiry Committee into the United Nations Oil-for-Food Program
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