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News > December 21, 2004

The Real Scandal

The Oil-for-Food program may have been corrupt, but more dangerous dealings have been ignored

By Frida Berrigan

Republicans have called for Kofi Annan's resignation.

Was the U.N.’s Oil-for-Food program (OFF) rotten? It looks like it. The U.N. Security Council created the program in 1996 to mitigate the impact on the civilian population of the economic sanctions aimed at toppling Saddam Hussein. It allowed Hussein’s government to use the revenue from oil sales to purchase food, medicine and other humanitarian commodities.

The program is over and the sanctions have been lifted, but a number of recent reports have revealed that the program was used as a conduit by Saddam Hussein to generate illicit revenue to buy weapons.

In July, the Government Accountability Office (GAO) published a report asserting that Hussein had used the program and other illicit means to generate more than $10 billion. Charles Duelfer, the CIA’s Special advisor for strategy regarding Iraqi Weapons of Mass Destruction, agreed with the GAO’s total figure, but estimated that just 16 percent, or about $1.7 billion, was related to the OFF.

These revelations, along with a swirl of other allegations—including the purported involvement of Kojo Annan, the secretary-general’s adult son, and assertions that the former head of the OFF, Benon Sevan, took bribes—have elicited a prompt response from U.N. Secretary General Kofi Annan. The Secretariat asked Paul Volcker, the former U.S. Federal Reserve chairman, to head a probe into the OFF. Volcker will release a preliminary report in January, with final conclusions to be published by mid-2005.

Members of Congress have been quick to believe the worst of the allegations and demand the severest penalties. Sen. Norm Coleman (R-Minn.), chairman of the Permanent Subcommittee on Investigations, led the vitriolic charge against the United Nations in a December 1 Wall Street Journal op-ed article. Coleman’s subcommittee has initiated a series of investigations into the OFF; in the article he blamed Kofi Annan for the corruption he has supposedly uncovered. He also made the unsupportable but damning claim that Hussein’s stolen billions are funding the current insurgency in Iraq, writing that “our troops would probably not have been placed in such danger if the United Nations had done its job in administering the sanctions and oil for food.” Coleman concluded by calling for Kofi Annan’s resignation: “As long as Mr. Annan remains in charge, the world will never be able to learn the full extent of the bribes, kickbacks and under-the-table payments that took place under the United Nations’ collective nose.”

Coleman’s crusade has a lot of support. A House of Representatives resolution calling for Annan’s resignation in order to “restore confidence” in the United Nations as an institution has 52 signatures. Companion bills in the House and Senate propose withholding a percentage of U.S. dues to the United Nations until it cooperates with a congressional investigation, separate from Volcker’s investigation.

But members on both side of the aisle oppose these punitive acts. Sen. John McCain (R-Ariz.) recently expressed his confidence that Volcker, a “smart guy, and tough,” will carry out a “full and complete investigation.” Sen. Carl Levin (D-Mich.), the ranking Democrat on Coleman’s subcommittee, called the attack on Annan “unwarranted and unfair.”

Levin is right. Conservative attempts to blame Kofi Annan obscure many facts—chiefly that the Secretariat did not oversee the OFF. The Security Council created the program and was responsible for its policing. The United States is one of the council’s five permanent members.

If Annan should not be held responsible, then who should?

The evidence points to Washington. The skimming, smuggling and kick-backing that occurred under the OFF appears to be small compared with the amount of revenue Saddam Hussein generated through illegal government-to-government transactions with Jordan, Syria and Turkey that had the tacit approval of Congress and the White House under Presidents H.W. Bush and Clinton.

The Duelfer report found that Jordan inked $4.5 billion in oil deals with Saddam Hussein, making it Baghdad’s single largest source of revenue besides the OFF and the “key to Iraq’s financial survival.” This trade was unauthorized but formally acknowledged by a Security Council concerned that Jordan’s economy might collapse without access to the oil. Illegal trade with Turkey generated $710 million for Saddam Hussein. Despite the fact that Washington knew that both these allies were illegally aiding the Hussein regime, Congress continued to release billions in military aid to Jordan and Turkey.

“With Turkey, it was plain illegal,” explained David Mack, deputy assistant secretary of state for Near East Affairs during the period, to The Associated Press. “It was smuggling, but everybody just said, ‘Oh well, geez, it was too hard to try to do anything about that.’ ”

Including the $2.8 billion in Iraqi trading with Syria, Duelfer’s report estimated that about $8 billion of the $11 billion in total illicit revenue was generated by these trade deals. Kofi Annan couldn’t stop them, the Security Council looked the other way and Congress implicitly green-lighted them for years.

The rest of the illicit money was generated through a complex system whereby the Hussein regime overpaid contractors for food and other humanitarian goods, only to be repaid in cash. Searching for instances of this abuse is like looking for a needle in a haystack. But according to Joy Gordon, a professor at Fairfield University and author of a forthcoming book on the sanctions against Iraq, on more than 70 occasions evidence was brought to the Security Council body charged with implementing the sanctions.

In the December issue of Harper’s, Gordon noted that “In not a single instance did the United States choose to block any transaction due to suspected kickbacks.” While apparently unconcerned with evidence of Hussein’s exploitation of the program, U.S. contract examiners were vigilant about dual-use items, blocking billions of dollars in humanitarian contracts because of concerns that they could have some military application. In July 2002 alone, the United States had placed nearly $5 billion of these contracts on hold.

If Coleman and other members of Congress want to hold someone accountable, they could start by cleaning out their own house and examining the continued practice of providing billions in military aid to nations like Jordan and Turkey that act at cross purposes with U.S. foreign policy. That’s the real scandal.

Frida Berrigan is a senior program associate with the New America Foundation's Arms and Security Initiative.

More information about Frida Berrigan

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  • Reader Comments

    As usual, crusading Americans are looking for the evil-doers without their doors, while ignoring the evil-doers in the room…

    This about says it all:

    “In not a single instance did the United States choose to block any transaction due to suspected kickbacks.”

    How about restoring confidence in the House of Representatives by calling for the resignation of these bozos?

    Posted by boughtmysoul on Dec 21, 2004 at 8:26 AM

    This corruption has been going on for years and as long as military
    munitions profits for arms deals is what fuels the corruption. Most governments are in the munitions business but, the USA and Israel are # 1 and # 2 sellers of arms and other military wares. Where do these corrupt leaders of Sudan and Rwands buy all their weapons to commit genocide on their own people? Who sold weapons and arms to those inhumane leaders in Yugoslavia, Congo,Indonesia, Cambodia etc? The others… England, Russia,
    Germany,France and Italy all have dirty hands.
    Good question to ask… could the billions of dollars spent for these ugly means (war) might have been spent to feed, teach, house
    and help develop these impoverished people of the world?
    And we have the audacity to ask for god’s blessing.

    The blatant accusations alleged against Kofi Annan are a ploy by this corrupt administration to create a diversion from the quagmire in Iraq and to destroy the United Nations. More of the
    “ends justify the means” machin- ations. Karl Rove makes this work while the gutless wonders “the
    wimp democrats of the DLC” with
    boring Joe Lieberman leading the
    way towards a massive retreat from
    doing the RIGHT thing.
    It took the ACLU to bring the torture memoranda into the mainstream media. NOT the reluctant wussy dems. The jackass is a great symbol for them it fits!!

    Posted by Florence Murphy on Dec 22, 2004 at 1:27 PM

    This is the dumbest shit that I have ever read. Saying that America sits on the Security Council is like saying that Ralph Nader was on the ballot in 2004; the only power that we wield there is veto power. And does this author really wish that we had withdrawn U.S. aid to Jordan and Turkey, which are presently only moderately anti-American? Brilliant, that would have set off anti-U.S. shitstorms from here to Afghanistan. Foreign aid is rarely the black and white issue that this author disingenuously makes it out to be.

    Posted by Aaron on Dec 24, 2004 at 2:10 AM

    Aaron, the point of the article isn’t to solely blame the US, but to point out the fact that we can’t solely blame Kofi Annan, like those chaps in the House of Representatives would like. These guys have completely absolved the US and other Security Council members of blame for the entire fiasco, and, as usual, name a scapegoat and believe that the whole thing will just go away if he’s axed. Fat chance. There were a lot of greedy people involved in this, and getting rid of Kofi won’t get rid of them. The real tragedy here is the suffering a lot of innocent Iraqis have undergone at the hands of their own government, and the world at large, because they were unlucky enough to be born there.

    Posted by boughtmysoul on Dec 24, 2004 at 8:22 PM

    The murderous actions of the US military in reducing Fallujah to rubble with the help of napalm and cluster bombs, turning off water and electricity to civilians, stopping medical shipments and shooting anything that moves shows that President Bush and his necon henchmen are bona fide war criminals.

    Now, the same scene will be played out again in Mosul, seeking redress and vengeance for the mess
    tent bombing. Perhaps the explosive used was part of the 380+ tons stolen from a bunker that we
    had deliberately chosen to ignore while at the same time, protecting Iraq’s Ministry of Oil.

    The American military machine’s murderous rampage in Fallujah was probably intended as a
    warning to other Iraqi cities:  Succumb to our unchecked might or become the next Fallujah.
    Mosul, beware.

    I would like to humbly add one more example of military might gone mad:  The Nazi invasion of
    western Russia in 1941. At first, some of the locals warily greeted the German army, thinking a
    different dictator would be better than Stalin. This train of thought was soon violently derailed as the Germans turned to torture, shooting of civilians en masse and the laying to waste of the countryside.

    That part of Russia, especially the Ukraine, was destined by Hitler for “Lebensraum” or room to live for an expanded Nazi empire.
    Can it be that the American mercenary army is creating the 21st Century version of Lebensraum for an increasingly land hungry Israel?
    Israel’s continuing actions in the West Bank, southern Lebanon and Gaza belie any of its peaceful pronouncements to the world and its continuing degrading and genocidal treatment of the Palestinians bears a resemblance to another Nazi term, “untermenschen.”
    That was the Nazi hierarchy calling the Slavs in Ukraine sub-human so their soldiers could shoot
    and kill civilians with impunity.

    Don’t count on the American public to awaken anytime soon and realize it’s government has gone
    mad.
    The vast majority of the American public’s mind has been dulled into submission by the most potent drug ever created: Television.
    Before the USSR fell, American movies and television usually portrayed bad guys with Russian accents.
    With the Russian bogeyman no longer a viable option, it wasn’t long before nefarious characters with Middle Eastern accents were dominating the movie screens.
    After 10 years of conditioning the American public of Arabs as untermenschen, we can now repeat the actions of Nazi Germany in Iraq.

    Myself, i pray and hope Bush and his neocons are not embarking on another “Endlosung.”

    Greg Bacon
    RR 1 Box 3518
    Ava, MO USA

    Posted by Greg Bacon on Dec 24, 2004 at 11:58 PM

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