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September 7, 2005
Volcker Report: UN Needs Better Oversight After Massive Fraud

The Volcker Commission's report on the Oil-for-Food Program (OFF) will castigate the UN for allowing billions of dollars to flow into Saddam's pockets through its incompetence and corruption, sources throughout the media report today. It lets Kofi Annan off the hook, at least for now, but specifically points out the sweetheart deals that his son got for the little amount of work he performed, calling into question the connection between that and the Secretary-General's performance. The Washington Post tells its readers that Annan says Saddam made him do it:

Volcker's new report will sharply criticize Annan's oversight of the oil program as lax, citing "serious instances of illicit, unethical, and corrupt behavior" by U.N. officials under his watch. The report will draw attention to administrative shortcomings by the nine U.N. humanitarian agencies, including the U.N. Development Program and Habitat, the main housing agency. It also will accuse the 15-nation Security Council of providing "uncertain, wavering direction" to U.N. officials running the program. "Neither the Security Council nor the Secretariat leadership was clearly in command," the preface states.

Annan conceded in an interview with the BBC on Monday that "mistakes were made" in managing the program, but he insisted that there were "concessions that had to be made to get Saddam Hussein to agree."

"I accept responsibility for inadequacies and failures," he told the BBC. But "when it comes to Iraq, on this issue, no one is entirely covered in glory. . . . Honestly, I wish we had never been given that program, and I wish the U.N. will never be asked to undertake that kind of program again."

That would be a switch. At the time, and all the way through the Iraq war, Annan and the rest of the UN-ophiles have claimed that only Turtle Bay had the moral authority for this kind of program and for the "containment" of Saddam Hussein. We have heard nothing but endless assertions that the "unilateral" actions of the US/UK coalition to enforce the terms of the cease-fire and sanctions defy international law and that the entire effort should return to the UN. Now Annan wants to wash his hands of enforcing any kind of santions regime? Does he want to explicitly make the UN into a League of Nations debating society?

Perhaps he just wants to make it into a social club for diplomats. After all, his family certainly enjoys the perks:

The Volcker panel singled out Annan's son, Kojo, for abusing diplomatic privileges extended to his father. The report claims that Kojo Annan received a $3,000 loan in 1998 to buy a $39,00 Mercedes-Benz from an executive of a Swiss company, Cotecna, that was trying to do business with the United Nations through the oil-for-food program, according to a member of Volcker's staff.

The report will also assert that Kojo Annan obtained thousands of dollars in diplomatic benefits -- including breaks on taxes and customs fees -- from the transaction by falsely claiming that he was purchasing the car for his father, according to the staff member.

Volcker's report also dismisses the Annan contention, oft repeated by himself as well as his allies, that the entire scandal has no basis in fact, and that it only represents an attack from conservative politcians on the UN itself. The London Telegraph has the specific language of the report that rejects the vast right-wing conspiracy defense:

and his senior staff that they were the victims of a politically motivated campaign by Right-wing politicians and journalists.

The report states: "As the years passed, reports spread of waste, inefficiency, and corruption even within the UN itself. Some was rumour and exaggeration, but much, too much, of it has turned out to be true."

The UN will be described as ill-equipped to handle the huge oil-for-food programme and "even programmes of a lesser scope".

It notes that Mr Annan is well respected at the UN but said the organisation urgently required stronger leadership, administrative reform and better auditing.

The report will present the strongest repudiation yet of Annan's leadership at Turtle Bay. It won't result in Annan's resignation, nor will it create a groundswell of demand for it among the General Assembly, which might give the best argument for its dissolution. If the organization cannot provide some kind of method for holding its management accountable for such widespread corruption and incompetence, then it really should fold its tent and disband altogether in favor of a replacement that has true checks and balances on power.

Remember too that Volcker served at Annan's pleasure. The US probes have done better -- they've actually caught and convicted two of the perpetrators of the fraud Volcker describes in his report. More arrests will occur as the former diplomats start talking about where all the money went. The Volcker report gives us a point of reference, but will be far from the last word on the subject.

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Posted by Ed Morrissey at September 7, 2005 6:39 AM

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