While reading This article, I realized that I don't know a thing about the oil-for-food scandal, except that somehow the UN, Saddam Hussein, the French and the Russian governments are implicated in something illicit involving something to do with the oil-for-food program in Iraq in the years before the war. I understand so little about the scandal that I couldn't really follow the article, beyond understanding that Kofi Annan and his son may be somehow involved - and honestly, I don't really know how or for what exactly.
Can any give me a dummies guide to the UN Oil for Food scandal - or at least a good internet link to one?
Thanks!
Posts: 2241 | Location: In between | Registered: 06-03-02
I also came across an article recently which argued that the country most responsible for (poorly) setting up the 'oil for food' program, and for policing it, was the US.
Basically, the idea was that Iraqi oil could be sold for food, as the sanctions were clearly hurting ordinary Iraqis to an unacceptable extent - but the system was open to abuse, and made a lot of the wrong people (middle men, Hussein himself and his cronies) very rich illegally.
Current, US, investigatons tend to (surprise, surpise) downplay the role of any US bodies in the scandal.
www.zmag.org More background. Again, it's from the viewpoint of someone trying to correct the bias of many US reports which try to use the scandal only as a way to discredit the UN.
From the article;
'Yet it is somewhat misleading to portray smuggling as a failure on the part of the UN. In 1990, Security Council Resolution 665 invited member states to interdict the suspected smuggling with their own military forces, leading to the establishment of the Multinational Interception Force patrolling the Persian Gulf. The US Navy provides most of the ships for the force, which has operated under the command of a series of American rear admirals and vice admirals from the Fifth Fleet based in Bahrain. None of the members of the Security Council ever intervened to block the well-known smuggling route passing through parts of northern Iraq controlled by US-allied Kurdish militias into Turkey. The US also filed no objection to the oil trade between Iraq and Jordan that took place throughout the history of the sanctions.'
And:
'On more than 70 occasions when there were obvious price discrepancies [in oil-for-food contracts, which would have allowed illegal profits to be skimmed off], the Office of the Iraq Program did bring them to the attention of the so-called 661 Committee -- composed of all 15 Security Council members -- which reviewed all proposed Oil for Food contracts. In testimony submitted to Congress on April 28, John Ruggie, the assistant secretary-general charged with relations with the US mission, recalled that the committee "approved roughly 36,000 contracts over the life span of the program. Every member had the right to hold up contracts if they detected irregularities, and the US and Britain were by far the most vigilant among them. Yet, as best as I can determine, of those 36,000 contracts not one -- not a single solitary one -- was ever held up by any member on the grounds of pricing."
The US delegation alone had 60 people examining contracts, and, over the course of the program, this delegation blocked thousands of contracts worth billions of dollars. In July 2002, for instance, over $5 billion of contracts were on hold, virtually all of them red-flagged by the US and its ally Britain. Yet, in placing the holds, the US and Britain were almost exclusively concerned with preventing potential "dual-use" goods -- items that theoretically could have military uses -- from entering Iraq. From time to time, according to sources who served on the 661 Committee staff, Americans on the staff did claim to have espied kickbacks, but offered no evidence.'
Newnick, I don't see how the article you cite supports the assertion that the US is most to blame for the failure of the program. It clearly mentions Britain and the other 13 members of the committee as having direct responsibilities for oversight. I think that there's plenty of blame to go round on this one. And since there was really no way to enforce the agreements at the final delivery point, there was no practical way to stop Saddam from diverting goods and cash.
I know it's popular these days especially to point to the US as the source of all the world's evils, and in many cases, rightfully so. But it's patently unfair to look first at the US, point a finger, and just stop there. We are not as evil as the rest of the world thinks we are nor as good as we think we are.
Teeceeum, NNN wasn't saying that the US was most to blame, only that it bears some of the blame for not having caught the corruption sooner and is underreporting its bad policing, if I understand her correctly. Even in that case, I agree with teeceeum that it doesn't look like the US was the only "policeman" who might have caught something. Also, the article says "'Yet it is somewhat misleading to portray smuggling as a failure on the part of the UN." However, if I'm understanding the Saffire article I posted correctly, the question isn't whether or not the UN failed. The question is whether or not leaders in the UN broke their own laws for personal benefit. Quite a difference.
Anyway, my question wasn't whether the program was well administered. That's certainly important, but it doens't relate to my question, and debate about who is to blame is sort of useless to me at this point, since I don't even understand who is being accused and for what, exactly. How much money did people "skim" off this program? How did they do it? How much did it benefit Saddam Hussein and his party members? Did it benefit states or just individuals? Who exactly did it? Governments? Individuals? Companies? From which countries? Would this affect their opinions about the war?
Posts: 2241 | Location: In between | Registered: 06-03-02
I just read the article you posted the link to, NNN. Thanks for posting it - it does help me understand the situation a bit better (although I'm still not exactly sure who is accused and exactly for what, in terms of dollars, nor exactly sure who benefitted).
However, the author of the article puts the debate back in the form of whether or not sanctions were the right thing to do. That leads me back to an old question that would be better debated in that thread, so that this one can be left open to answer the basic questions.
I'd really like answers before debate, if that's possible. But I know that's a tall order here on answerpool!
Posts: 2241 | Location: In between | Registered: 06-03-02
It's difficult to find a website that explains this story clearly, without launching into criticism of the UN, the US or whoever...
Here's a description of how it was done:
"First, there is evidence that Saddam deliberately underpriced his oil, so that, instead of the full price going into the UN escrow account, a secret premium could be demanded from purchasers, which was not declared to the UN but either paid into secret accounts or pocketed by middlemen to whom Saddam gave negotiable vouchers as political favours. The U.N.'s oil overseers got wind of this practice in 2000 and alerted the Security Council — which agreed, some months later, that henceforth Iraq should be required to fix its prices retroactively, reducing the scope for illicit premiums.
Secondly, Saddam encouraged companies from which he was buying food and other items authorised under the programme to overprice their goods, and required them to pay back the difference — not into the U.N. escrow account but into secret accounts of his own. This abuse was much harder for U.N. officials to detect. In some cases they did query the prices and, if no satisfactory answer was given, reported their concerns to the Security Council's sanctions committee, which gave final approval to the contracts. The whole programme was designed and supervised by the Council, all of whose 15 members served on this committee. Any one of them could put a contract on hold for further investigation. The U.S. and the United Kingdom put thousands of contracts on hold, citing fears that the goods involved might have military uses. In no such case since 1998 did they cite concerns about the price or quality of the goods. Only after Saddam Hussein's fall was the full extent of these "kickbacks" revealed.
Finally, whatever illicit gains Saddam may or may not have been able to skim off, the programme did provide a basic food ration for all 27 million residents of Iraq."www.hindu.com
The last sentence describes what was supposed to be the whole point of the arrangement. The U.N. escrow account was supposed to get all the funds from the sale of oil, and to use it to buy humanitarian supplies.
Notice that the idea of fixing the oil price 'retroactively' to prevent underpricing never worked. As one of the previous links pointed out, it meant buyers agreeing to buy oil without knowing the price, the scheme administrators attempting to work out what would have been a fair market price for Iraqi oil after they had looked at other oil prices for that month.
The big question is which UN officials knew how much about the shenannigans, and who benefitted.
(Sarai, you're right; I'm not saying the US was to blame. A lot of the reporting of this story in the US, however, has put it in terms only of the corrupt UN, French and Russians. It's annoying that many US critics of the UN don't seem to realise what power the US has in that body. In this case the US and the UK had a veto on every aspect of the program, set it up and policed it. If the program failed to cope with Hussein's scheming and the inevitable temptations to skim million-dollar deals, it was as much their failure as the UN's.)
The US Government intiated 'Oil for food'. It was not some 'UN invention', though the US cleverly handed administration to the UN so that the UN could take the blame when 'trading with the enemy' accusations started to fly. Perhaps we'll hear similar indignant outcries from the US when the scale of the contract 'anomalies' regarding US companies now operating in Iraq come to light... oops, they already did...
Posts: 509 | Location: Australia | Registered: 02-19-03
'The Duelfer report, along with eight sets of Congressional hearings, vitriolic press coverage and considerable ranting by the right, suggest an antipathy toward the UN that goes well beyond election-season maneuvering. The consequences of this scandal will be considerable. We witnessed the ill-fated decision to invade Iraq without Security Council authorization; we might recall that the Security Council would not grant the American demand to authorize an invasion, precisely because the United States was unable to provide any compelling evidence that Iraq had weapons of mass destruction. If the world's most respected institution of international governance is rendered impotent by accusations as distorted and exaggerated as these, we should all fear the consequences.'
"A United Nations panel has found that the US-led occupation authority failed to exercise proper controls over Iraq's oil industry and could not say how much oil had gone missing since the fall of Saddam Hussein... ...US politicians have often accused the UN of incompetence and, perhaps, corruption in its handling of the oil-for-food programme, a scheme to alleviate Iraqi suffering under sanctions before the war. Now the boot is on the other foot."news.bbc.co.uk
"The U.S. occupation authority in Iraq... ...was unable to keep track of nearly $9 billion it transferred to government ministries, which lacked financial controls, security, communications and adequate staff, an inspector general has found."
"Documents obtained by CNN reveal the United States knew about, and even condoned, embargo-breaking oil sales by Saddam Hussein's regime, and did so to shore up alliances with Iraq's neighbors.
The oil trade with countries such as Turkey and Jordan appears to have been an open secret inside the U.S. government and the United Nations for years...
...Estimates of how much revenue Iraq earned from these tolerated side sales of its oil to Jordan and Turkey, as well as to Syria and Egypt, range from $5.7 billion to $13.6 billion.
This illicit revenue far exceeds the estimates of what Saddam pocketed through illegal surcharges on his U.N.-approved oil exports and illegal kickbacks on subsequent Iraqi purchases of food, medicine, and supplies -- $1.7 billion to $4.4 billion -- during the maligned seven-year U.N. oil-for-food program in Iraq."www.cnn.com
'U.S. prosecutors have charged a Texas oil tycoon and two Swiss executives and their companies with paying secret kickbacks to Iraq in the U.N. oil-for-food program.'today.reuters.com
'The Justice Department can’t just let it slide. Defrauding the government in peacetime is a crime. Defrauding it during a war is very close to treason.'
'Two Army veterans and their company cheated the U.S. government on a contract to furnish Iraq with a new currency in 2003 and should pay more than $10 million in assorted damages, a federal jury in Alexandria ruled yesterday...
..."This is a smashing victory for U.S. taxpayers and these whistle-blowers though the Bush administration did nothing to help," said Alan M. Grayson, the attorney for the plaintiffs...
...The trial has been complicated by the murky legal status of the CPA and the various sources of money it used to try to rebuild the country. U.S. District Judge T.S. Ellis III told the jury that they could only consider fraud charges on the first $3 million spent on the Custer Battles currency contract -- out of a total of about $20 million -- because that clearly came from the U.S. Treasury...'www.washingtonpost.com
