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The Oil-For-Food Scandal

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From here:

Throughout the ’90s, France and Russia badgered the United States and Britain to increase Iraqi oil production. President Bill Clinton and Prime Minister Tony Blair fought them at each step, but then reluctantly gave way. First Iraq was allowed to sell 500,000 barrels daily. Then, on Franco-Russian insistence, it was raised to 1 million, then to 2 million and, finally, to 3 million barrels a day.

Each time, America and Britain — the nations now accused of coveting Iraqi oil — resisted the increases in Iraqi production and urged tighter controls over the program. Each time, the French and the Russians prattled on about the rights of Iraqi sovereignty and the need to feed the children.

Now we know why the French and Russians were so insistent. Iraqi government documents (leaked to the Baghdad newspaper Al Mada) list at least 270 individuals and entities who got vouchers allowing them to sell Iraqi oil — and to keep much of the money. These vouchers, and the promise of instant great wealth they carried with them, bought vital support in the United Nations to let Saddam stay in power.

The list of those receiving these bribes includes France’s former French Interior Minister Charles Pasqua (who’s a leader of Chirac’s party) and Patrick Maugein, the head of the French Oil firm Soco International. France’s former UN ambassador, Jean-Bernard Merimee, got vouchers to sell 11 million barrels.

From here:

One of the next big chapters in the United Nations oil-for-food scandal will involve the family of the secretary-general, Kofi Annan, whose son turns out to have been receiving payments as recently as early this year from a key contractor in the oil-for-food program.

The secretary-general’s son, Kojo Annan, was previously reported to have worked for a Swiss-based company called Cotecna Inspection Services SA, which from 1998-2003 held a lucrative contract with the U.N. to monitor goods arriving in Saddam Hussein’s Iraq under the oil-for-food program. But investigators are now looking into new information suggesting that the younger Annan received far more money over a much longer period, even after his compensation from Cotecna had reportedly ended.

The importance of this story involves not only undisclosed conflicts of interest, but the question of the role of the secretary-general himself, at a time when talk is starting to be heard around the U.N. that it is time for him to resign, and the staff labor union is in open rebellion against “senior management.”


The younger Annan stopped working for Cotecna in late 1998, but it now turns out that he continued to receive money from Cotecna not only through 1999, as recently reported, but right up until February of this year. The timing coincides with the entire duration of Cotecna’s work for the U.N. oil-for-food program. It now appears the payments to the younger Annan ended three months after the U.N., in November, 2003, closed out its role in oil-for-food and handed over the remains of the program to the Coalition Provisional Authority in Baghdad.


Labeled as compensation for Kojo Annan’s agreeing not to compete with Cotecna’s business in West Africa, the post-employment payments were in the amount of $2,500 per month, according to another source with access to the documents. If the payments were continuous over the slightly more than five-year period involved, that would have totaled more than $150,000.


The pattern in this scandal has been that Secretary-General Annan, until confronted by the press, has either failed to spot or failed to disclose timely information about Cotecna’s paychecks for his son. The first bout came back in early 1999, two years into Kofi Annan’s watch as secretary-general. Cotecna had just won the U.N. oil-for-food contract, replacing a British firm, Lloyd’s Register. News broke January 24, 1999, in the Sunday Telegraph, that Kojo Annan had worked for Cotecna. The U.N. produced an internal report, shown this year to the New York Times, but never publicly released, which found no wrongdoing, but evidently failed to note that Kojo Annan was still receiving payments from Cotecna.

About that same time, in February 1999, a U.N. spokesman, John Mills, told the press that Secretary-General Annan had had no knowledge of Cotecna being hired by the U.N., that Cotecna’s bid for the job was the lowest “by a significant margin,” and that, “This contract was treated at every stage as a routine commercial matter and in line with the rules and regulations of the United Nations” – a statement later contradicted by one of the U.N.’s own secret internal audits, which leaked this past spring.

In March of this year, with the U.N. oil-for-food scandal by then on the boil, the U.N. was questioned again by the press about Kojo Annan’s relations with Cotecna. The answer at that stage from the secretary-general’s office was that the younger Annan had worked on Cotecna’s staff from December 1995 through February 1998, and a few weeks later became a consultant for Cotecna, resigning in early December of 1998, about three weeks before Cotecna won the U.N. contract. This was offered by Secretary-General Annan’s office as evidence that the younger Annan had severed his ties with Cotecna before the company got the U.N. job. A source familiar with the documents now says that Kojo’s consultancy with Cotecna expired the same day the company got the U.N. contract, December 31, 1998.

Outside investigations in recent months have added to the timeline, raising yet more questions. In September of this year, The Wall Street Journal reported that even after Kojo Annan’s Cotecna consultancy ended in 1998,he continued to receive payments from Cotecna through the end of 1999, as well as having use over that same period of a company credit card. This report is confirmed by a letter, seen by this reporter, written January 11, 1999, by Cotecna CEO Robert Massey, beginning “Dear Mr. Annan” and outlining the terms of a $2,500 per month “compensatory indemnity” in return for Kojo Annan’s agreement to “refrain from any similar consultancy or employment.”

Now comes this latest information that Kojo Annan continued to receive payments until February 26 of this year – more than five years longer than the U.N. initially implied, four years longer than the U.N. confirmed to the press this September, and for the entire duration of Cotecna’s U.N. oil-for-food contracts.

So far, the secretary-general has refused requests from Congress for inter views with U.N. staff, or access to the U.N.’s 55 internal audits of the oil-for food program. One of those internal audits, which leaked this past May, noted serious irregularities with the U.N.’s handling of the Cotecna contract, including an “inappropriate” upward revision of Cotecna’s lowball $4.87 million bid, just four days after Cotecna and the U.N. signed the deal.

At every turn, the saga of the secretary-general’s family ties to Cotecna raises questions about Kofi Annan’s handling of potential conflicts of interest. Even if Mr. Annan cannot be held responsible for the decisions of his son, his job does entail responsibility for the actions of the U.N. Secretariat. As the oil-for-food scandal has unfolded, it has become clear that U.N. secrecy and lack of accountability evolved, in effect, into complicity with Saddam’s scams and influence-buying. By now, between congressional and other investigations, there are allegations that Saddam, on Mr. Annan’s watch, under U.N. sanctions and oil-for-food supervision, scammed and smuggled some $17.3 billion in oil money meant for relief, using some of that money to fund terrorism, import weapons, and buy influence with Security Council members France, Russia, and China.

From here:

Russia is refusing to provide witnesses or information to the independent investigation into alleged corruption in the multibillion-dollar U.N. oil-for-food program in Iraq, an official close to the investigation said Wednesday.
The official, speaking on condition of anonymity, said Russian diplomats “dug in their heels” during a meeting in Moscow this week with members of the independent inquiry.


Under the program, Russian companies were major recipients of contracts from Saddam Hussein’s government for the sale of Iraqi oil and the supply of humanitarian goods to Iraq.

Launched in December 1996 to help Iraqis cope with U.N. sanctions imposed after Saddam’s 1990 invasion of Kuwait, the program allowed the former Iraqi regime to sell unlimited quantities of oil provided the money went primarily to buy humanitarian goods and pay reparations to victims of the 1991 Gulf War. Saddam’s government decided on the goods it wanted, who should provide them, and who could buy Iraqi oil – but the U.N. committee overseeing sanctions monitored the contracts.


A report by top U.S. arms inspector Charles Duelfer, released last month, alleged that Saddam issued secret vouchers for purchase of oil to an array of officials and political figures from various countries, dominated by Russia, France and China. That oil could then be resold at a profit.

Saddam allegedly issued the vouchers with the aim of currying favor among U.N. Security Council members.

U.S. Congressional investigators on Monday estimated that Saddam had raised more than $21.3 billion in illegal revenue, using the oil-for-food program and other schemes, like the illegal smuggling of oil.

In Russia, the recipients allegedly included the presidential administration’s office, top oil companies Yukos and Lukoil, and ultranationalist lawmaker Vladimir Zhirinovsky, the report said.

At a news conference last month, Volcker said his investigators had received good cooperation from the U.S. and Iraqi governments, and a promise of cooperation from France.

But he said there had been “a little resistance here and there,” citing the French bank BNP Paribas, where the oil-for-food program had its account, and the American accounting firm Ernst & Young which was hired by the Iraqi Board of Supreme Audit to review more than 20,000 files from Saddam’s regime related to the oil-for-food program.

From here:

China illegally supplied Saddam Hussein’s regime with missile technology and other weaponry and was a major beneficiary of the U.N. oil-for-food program, according to a CIA report.

The report by the Iraq Survey Group also stated that China, along with France and Russia, was bribed by Saddam with oil sales and weapons deals into working to end U.N. sanctions.

One sale took place in 2001 and involved an intelligence officer in Beijing, Abd al-Wahab, who bought 10 to 20 gyroscopes and 20 accelerometers from a Chinese firm that was not identified by name. The equipment was to be used in Iraq’s Al-Samud missile program, said a former high-ranking official of Iraq’s Military Industrialization Commission, which was in charge of arms procurement.

China was the third-largest recipient of oil vouchers from Saddam’s regime, the report said. Russia and France were the two largest.

The Iraqi government used the voucher system to siphon off $11 billion through contracting kickbacks and other corruption in the $64 billion humanitarian program, which operated from 1996 to 2003. The program was designed to get food and medicine to the Iraqi people, despite international sanctions.

China also supplied rocket guidance software to the Iraqi Atomic Energy Commission in 2002 that was labeled “children’s software” to mask its military nature, the report said.


Iraq also was in the process of buying chemicals and materials for liquid-fuel missiles from Chinese and Indian companies. The sale may have been stopped by the U.S. military action that began in March 2003, the report said.

In light of all the disgusting details of corruption now coming out about the UN, as well as UNSC veto-holding nations like France, Russia, and Red China, does anyone seriously have any faith in this international institution anymore?

The American taxpayer provides something like 30% of the funding for the United Nations. This is, by far, the largest single “fee” any country is charged for membership in the UN.

And what do we get out of our investment of untold billions of dollars? We get bribery, corruption, and rampant anti-Americanism.

It would probably too provocative a move to simply “unilaterally” leave the UN. But this option should not be left off the table.

Even the threat of leaving might get these arrogant, sneering diplomats to clean up their act. Maybe.

And if nothing else does the trick, it could be worth the try…

Desperate times call for desperate measures. The US played a vital role in creating the UN. And we can play a major role in destroying it as well, if need be…

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About RJ

  • From here.

    Wow, if Agent 86 wasn’t able to prevent KAOS from eliminating those two words, “blogging” wouldn’t exist.

    Would you believe, lazy, stupid blogging?

    How about lazy, stupid blogging about fantasies about spanking somebody’s monkey and third world boy scouts?

  • Paul S

    Bravo RJ… It s funny how history is destined to repeat itself. In 1945 the UN was formed out of the former League of Nations. This action was taken for the same reasons (ineffective in preventing WWII) We are now left to ponder..that if we don’t act to radically change the UN, will this world survive after WWIII to re-think the UN’s current status (again inneffective)