UNITED NATIONS: Magnifying oil-for-food scam to monstrous levels
Youssef M. Ibrahim

The oil-for-food scandal is proving to be less of an embarrassment to the United Nations than to those who built it up as the mother of all fiscal scandals and reason enough to brand the UN.

Following the first pronouncement a week ago on an ongoing investigation into the program, the Bush administration and fellow travelers now find themselves holding a pretty thin sheet of evidence.

A so-called interim report by Paul Volcker, former head of America`s Central Bank known as the Fed, was notable for its failure in finding a smoking gun anywhere near UN Secretary-General Kofi Annan or even the principal of the case, former director of the oil-for-food program, the Armenian Cypriot Benon Sevan.

Sevan denied all suggestions that he manipulated the program in favor of the previous regime in Iraq. Volcker was left with innuendoes and a promise of more investigations. The hard case so rumored by neoconservative vampires appears to have evaporated.

This is particularly embarrassing as the inquisition, which was placed in the hands of Volcker by none other than Annan himself, has employed the work of 60 investigators who spent about $35 million of the UN`s money for a year.

It came up pretty limp, not even rising to the level of wide currency among an American press corps that, as during the Gulf War itself, failed to do its homework.

They were content to exist happily on leaks from an American administration known for its animus toward all things multinational.

Sevan was supposed to have connived with former Iraqi president Saddam Hussein, select groups of oil dealers and well-placed politicians in world governments to create billions in slush funds and receive Saddam`s gifts of discounted oil contracts.

The nature and scope of this much-ballyhooed scandal were phenomenal. Money was siphoned away from the mouths of Iraqi children and Iraqi oil revenues.

It was re-routed to private slush funds by secretive banks. The numbers only began at $2 billion but went up from there, depending on the leak-of-the-day and how gullible reporters can be.

As it turned out Volcker`s snoops found little beyond their suspicion. Sevan used his influence with Iraq `improperly`.

As for the larger conspiracy, they can only point at one, rather small oil-trading company, as having gained access to only two modest-size contracts of Iraqi crude oil shipments.

Sevan was said to have prompted the UN to provide greater help in rebuilding Iraq`s oil equipment.

That`s an odd charge for it was the man`s job to revive Iraq`s revenues from oil so as to import more food - Saddam or no Saddam.

When it came to corruption these brave souls speculated that Sevan`s aunt could have been a conduit for bribes. Why? She left him an inheritance of $160,000. For a major heist it does not exactly rank right up there with the Thomas Crown Affair.

This interim report leaves one wondering: does not the mother of all scandals deserve more? Even the poorly informed could have done more in a year with $35 million and 60 specialist investigators.

Never fans of the United Nations, George W. Bush and his neoconservative minions have been using investigations of the UN oil-for-food program, corruption and inefficiency as a means to blackmail, paralyze and marginalize a multinational organization that has been a thorn in their side.

To be sure, Annan, as has been suggested in this column, should have accepted blame for improprieties that happened under his watch, spared the UN a witch-hunt and quit.

He did not. But that is certainly not a reason to brand the UN a broken institution and hint that its present leader, as well as his predecessor, Boutros Boutros Ghali (whose name was dropped from the interim report without a valid reason) are corrupt,

Finally, the lone oil-trader, who supposedly was the linchpin in the huge scandal, only picked up two small contracts of Iraqi oil sales according to the interim report before dropping out as the deal looked unprofitable.

Graver than the exaggerations are omissions. It is a matter of record that Saddam`s slush funds were enriched not by cheating on the oil-for-food program, but by the daily smuggling of some 500,000 barrels of oil outside UN supervision.

This daily oil export went out via the borders of two of America`s major allies, Turkey and Jordan, as well as through those of Iran and Syria, all of which have had commercial ties with Iraq and pipelines over the ground or under.

This occurred with the full knowledge of the world intelligence community. Reporters who covered OPEC meetings openly discussed Iraqi oil smuggling with oil ministers in Vienna and with Sevan himself.

As a recent New York Times editorial pointed out, Volcker`s incomplete mid-term report has yet to tackle how members of the UN Security Council looked the other way.

Transgressions were committed by world-class oil companies with American, British, Chinese, Russian and French pedigree. Instead the Volcker interim report stopped at picking on a United Nations official and a lone oil trader in Geneva.

There is more. Quantities of oil cited in the interim report as the subject of the UN`s dubious dealings amount to 0.1825 percent of Iraqi oil exports, estimated at 4 billion barrels over the period of the accusation, a statistical irrelevance in the world of oil.

Could it be that the animus that has developed toward Annan by the Bush administration is behind the spin?

After all, the secretary-general had the nerve to declare the invasion of Iraq an `illegal war` and denounce the scandalous torture practices against Iraqis at Abu Ghraib prison.

The president of the United States is an oil businessman-millionaire, who knows that this is, oil-wise, a charade. So does the former head of America`s central bank, Volcker. Gents, give us a break.

Youssef M. Ibrahim, a former Middle East correspondent for The New York Times and energy editor of the Wall Street Journal, is managing director of the Dubai-based Strategic Energy Investment Group.