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February 12, 2005
Benon Sevan Blocked UN Audits: Volcker

In an interview with the Associated Press, UNSCAM investigator Paul Volcker took aim squarely at OFF program chief Benon Sevan, claiming that Sevan used his office to severely restrict auditors who could have caught the corruption in the $64 billion program:

The U.N. oil-for-food program chief under scrutiny for alleged corruption and mismanagement blocked a proposed audit of his office around the same time he's accused of soliciting lucrative oil deals from Iraq, according to investigators.

A U.N. auditing team, which was severely understaffed, said running the $64 billion oil-for-food program was "a high risk activity" and a priority for review. But Benon Sevan denied the internal auditors' request to hire a consultant to examine his office in May 2001 an act top investigators of the program are now calling into question.

"I think the auditors thought they were steered away from some areas," Paul Volcker, who's leading the independent probe, told The Associated Press. "Our judgment is that the main office should have been audited. And that leaves the inference that perhaps the auditors were not encouraged to do the work. I think we draw the inference that it was at least suspicious."

What appears most suspicious is the level of oversight given to the OFF free-for-all. The UN's internal regulations require that programs have one full-time auditor for every $100 million of funding, a level which would have required 640 auditors at the current estimates of cash flow through Sevan's office. In 2001 alone, Sevan's main office in New York should have had 160 auditors. Only five auditors worked at Sevan's HQ that year.

Those five auditors didn't suffer from overwork, either; Sevan made sure they were well rested. Money for audits had to come from the programs which they audited. Therefore, the same managers who would have had awkward questions to answer about the results had to approve the audit expense first. Unsurprisingly, Sevan and his managers approved few audits, and towards the end none at all. He put them off once by telling Arthur Anderson -- another non-surprise -- that the OFF program would likely end soon and Sevan could not justify the $70,000 expense of the required audit. Instead, Sevan directed them to check on the Baghdad end of the program, which they eventually did.

This response came from the program's brand-new, $3 million offices.

Once again, we see the lack of accountability inherent in the structure of Turtle Bay. The UN has no real checks and balances; the Secretary-General should enforce the regulations, but Kofi Annan appeared too disinterested to supervise his good friend or to rock the boat of the program which gave his son Kojo a steady stream of income. When the Secretary-General doesn't manage the organization effectively, either through indifference, incompetence, or more malicious intent, no real mechanism for correcting the problem exists at the UN. And since the majority of the General Assembly represents tinpot dictators and kleptocrats who operate on graft and corruption (and depend on it), they resist the idea of kicking out someone who allows them to conduct their business the way they like.

The more that comes out of the Oil-For-Food fiasco, the clearer it demonstrates that the UN has become so dysfunctional that fixing it almost appears impossible. An old saying has it that people get the government they deserve, and the UN's rotten and incompetent management provides an apt example. The UN will never improve until the constituent governments actually represent their populations instead of the ruling crime families in their countries. And as long as the existing membership remains, the leadership we get will continue to produce Kofi Annans instead of true leaders that can be trusted to manage our money.

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Posted by Ed Morrissey at February 12, 2005 7:31 PM

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