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January 10, 2005
UN Report Shows Indifference To Auditors

The New York Times reports on the release of the preliminary Volcker Report on the morass of the UN's Oil-For-Food program. While the Times laughingly describes the Volcker Commission as "independent" when they reported and answered to Kofi Annan, the report makes clear the arrogance of UN management on following accepted standards of management and accounting. Out of 179 key recommendations made by auditors during the life of OFF, only 22 ever got implemented:

The release of the confidential documents shows with new depth the loose financial controls over the sprawling program, which has become a major scandal at the United Nations.

While neither the audits nor the accompanying briefing paper from the commission contain allegations of bribery or corruption by United Nations officials, the audits make clear that many of the deficiencies were known in the late 1990's, at a time when indications of corruption of the program by Saddam Hussein and others were also reaching the United Nations.

So the widespread incompetency and corruption that plagued the program didn't surprise anyone once it came out, including Kofi Annan, presumably. Annan is in a tough position; either he claims he knew nothing about these audits -- in which case, his own competency comes into serious question -- or he ignored them, which makes him complicit in the scheme. Quite simply, Annan has no other choices before him.

Even though Volcker found no massive corruption in his limited scope (remember he had no subpoena powers and only received cooperation voluntarily), what he found demonstrates the hopelessness of Turtle Bay. One of the most prominent failures uncovered by Volcker was a collapse of oversight over the OFF program's New York office, which spent 40 percent of the administration fees paid by the Iraqis. This office is in the same city as the UN's headquarters and Annan let them run wild.

Nor does the Volcker Commission do much more than give a laundry list of audit violations. The 9/11 Commission faulted American intelligence services for failing to "connect the dots," and it looks like Volcker failed to do much in that regard as well. For instance, the Swiss group Cotecna managed the contracts for the UN's OFF office, especially for goods shipped into Iraq for relief efforts; in fact, it did the lion's share of the work. If the mismanagement was that bad, then what does it tell us that Kojo Annan worked for Cotecna and continued to get paid off for it for years after he left? Volcker claims not to have found widespread corruption, but paying off the Secretary-General's son while the UN failed to heed its own auditors in managing Cotecna indicates a whole lot of . Funny that doesn't get much mention by Volcker.

Small wonder that Jan Egeland yesterday announced that the tsunami-relief efforts being directed by the UN would release financial disclosures on a regular and ongoing basis during its run. The revelations from OFF show that UN management cannot be trusted to run aid programs competently under normal circumstances. For myself, I plan on waiting for the Senate investigation headed by Norm Coleman, which I think will give a much more complete picture.

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Posted by Ed Morrissey at January 10, 2005 5:39 AM

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» Critics Question Trust in the United Nations Tsunami Relief Effort from bLogicus
The oil-for-food Iraqi relief effort, with U.N. Secretary-General Kofi Annan at the helm, ended in a complete debacle as members of the security council took bribes and engaged in widespread corruption. The most recent report reveals: Internal audits c... [Read More]

Tracked on January 10, 2005 7:55 AM

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