May 18, 2004
The Oil-for Food scandalBy Thomas Lifson
Is the investigation into the United Nations Oil—for—Food Program degenerating into chaos? Disconcerting news reveals that Coalition Provisional Authority head Paul Bremer has appointed a second auditing firm, Ernst & Young, to begin auditing Iraqi documents, some of them already reviewed by another firm, KPMG.
The Iraqi Governing Council, acting at the impetus of Ahmed Chalabi, had hired KPMG in February, but lacks the funds to pay it, unless Mr. Bremer chooses to release them. His recent statement on the subject is not exactly comforting:
'I must reiterate that CPA has approved only one investigation," Bremer wrote Chalabi this week. "The CPA will not authorize funding for other investigations into these allegations and any such investigation could undermine the process already under way."
Critics are worried that, at a minimum, Ernst & Young's starting—over will delay the investigation. Even worse is the possibility that documents will be lost in the shuffle, or that key investigative leads will go cold. No one is openly heard muttering 'cover—up' for the moment, but clearly the worry exists, at least among the conspiracy—minded.
Bremer is known to have been angered over disclosures of names of suspected recipients of bribes from Saddam's government, using an estimated $10 billion illegally diverted from the proceeds of the sale of oil under United Nations auspices. Top officials of the United Nations itself, as well as senior officials of many governments, including France and Russia, have been the subjects of leaked information from the IGC investigation using the KPMG firm.
Bremer is moving quickly to consolidate control over the actual Iraqi government documents, drawn from the archives of several ministries. The largest number of documents, 7,500 files, were seized from Saddam's former Oil Ministry, while more than 5,000 were taken from the Electricity Ministry, 3,682 from the Health Ministry and 2,500 from the Agriculture Ministry. His chosen instrument for investigation is called the Iraqi Board of Supreme Audit. Officially under Iraqi management, it is actually under the control of the Coalition Provisional Authority, meaning Bremer.
The U.N. itself has appointed Paul Volcker to head its own internal investigation into the matter. While Mr. Volcker is a man of high reputation, there is little reason to hope that he will have much success, given the letters sent out under Deputy Secretary—General and Oil—for—Food Program head Benon Savan's signature, telling contractors to avoid disclosure of the facts of their work under the U.N., and reminding them of confidentiality clauses in their contracts. Consequently, Volcker's investigation is already regarded as unlikely to develop any facts uncomfortable to the U.N.'s leadership.
Why is the United States shutting down Chalabi's already—established investigation?
A cover—up could be underway. It is theoretically possible, if unlikely, that prominent Americans close to the Bush Administration might be compromised. But if that were the case, involving two globally—prominent audit firms would not be the best way to ensure confidentially, especially after their peer firm Arthur Andersen went down in flames for covering up mere corporate crime.
It might be that Paul Bremer is simply safeguarding the integrity of some future legal process, in which the evidence will be used. Premature disclosure of evidence could be used to hobble the effectiveness of judicial proceedings. This explanation has the advantage of simplicity.
But it may well be that the Bush Administration is pursuing its own ends, and does not want any interference. Let us assume for a moment that the Americans get the goods on Kofi Anan and other important members of the U.N. Secretariat, as well as important Frenchmen and Russians. Wouldn't we then be in a position to get cooperation on an entire range of matters? Wouldn't the threat of disclosure of embarrassing, possibly criminal, acts be a more valuable asset than any actual damage done to the U.N. or to foreign leaders?
If the United States were seen by the rest of the world to be aggressively trying to discredit or destroy the United Nations, many forces would denounce us for pursuing vengeance, and would heap doubt upon the authenticity of the documents supporting our charges. Our image and our influence would only be harmed, at least in the short—to—medium run.
Despite its many faults, the United Nations does provide an occasionally useful forum for the United States, and can at times operate to support American objectives. It may be hopelessly corrupt, but it offers a way to address the other nations of the world in one place. And no matter how discredited it may be in our eyes, other nations still regard it as the closest thing we have to a legitimacy—conferring body in the realm of world affairs.
The same calculus operates with regard to foreign officials. Wouldn't it be smarter to, in essence, blackmail these officials into supporting policies and initiatives to our strategic advantage? The United States is going to find it convenient to employ the United Nations is some sort of role in Iraq, following formal transfer of sovereignty. It will need the cooperation of Security Council members and administrative officials of the Secretariat.
The idealist in most of us would want to seek the abstract goals of truth, justice, and honesty in the conduct of international affairs. Let the chips fall where they may.
But international affairs are rarely placed in the hands of idealists. Thank—goodness, considering the track record of the likes of Woodrow Wilson.
It is quite possible that, behind the scenes, and in ways that we will never hear of, the United States is gathering and using information about the scandals for maximum advantage. We may not have the public satisfaction of seeing our antagonists squirm in the harsh light of disgrace. But there may be compensating successes in the international arena. I, for one, will be very closely watching the actions of Kofi Anan, France, and Russia, as the United States maneuvers to create international support for the Iraqi regime which will shortly take over sovereignty.