U.N. Council Backs Probe of ‘Oil-for-Food’

The Security Council unanimously endorsed an independent investigation Wednesday into charges that U.N. officials mishandled the Iraqi “oil-for-food” program, allowing Saddam Hussein to illegally pocket billions of dollars.

Former U.S. Federal Reserve Chairman Paul Volcker, named as chairman of the three-person investigative panel, insisted on securing the Security Council’s formal support before launching his inquiry, saying it was important to “make sure that member states knew what they were getting into.” The resolution requires all U.N. member states “to cooperate fully” with the inquiry.

The U.N. oil-for-food program was established in 1996 to allow Iraq -- then under U.N. sanctions for its 1990 invasion of Kuwait -- to sell oil and use the revenue to buy humanitarian goods. Oil sales outside the program were prohibited. The 15-member Security Council set the terms for the program.

Allegations of corruption emerged in January in the Iraqi newspaper Al Mada, which published a list of 270 dignitaries, officials and journalists from 46 countries who allegedly received vouchers from Hussein’s regime to buy millions of barrels of oil at a discount. The coupons allegedly were resold at market value to oil refinery middlemen.

Among those named by the paper was Benon Sevan, the U.N. official who ran the program. He has denied wrongdoing. A handful of others on the list have confirmed that they received rights to Iraqi oil, which they could sell for a profit, but most have denied any involvement. About a quarter of the names on the list are companies or officials related to Russian interests.

Documents that appear to detail kickbacks also have been distributed by Claude Hankes-Drielsma, an advisor to Ahmad Chalabi, a member of the U.S.-backed Iraqi Governing Council and former exile leader long critical of the United Nations. The General Accounting Office, the investigative agency of the U.S. Congress, has said Hussein’s government illegally obtained more than $10 billion through the oil-for-food program.

U.N. Secretary-General Kofi Annan announced last month that he was launching an inquiry into the corruption allegations, but Security Council endorsement of the probe was initially resisted by Russia. Moscow relented after Annan called Foreign Minister Sergei V. Lavrov, who until last month was Russia’s ambassador to the U.N.

“I want to get to the truth and I want to get to the bottom of this,” Annan said Wednesday.

The allegations of fraud and mismanagement come at a sensitive time for the United Nations, tarnishing its image just as Washington is asking the world body to guide the selection of the transitional government in Iraq and help prepare elections there.

Even before the accusations of corruption in the oil-for-food program arose, many Iraqis had a negative view of the United Nations, blaming it for shortages of critical goods during the period of sanctions.

Annan said that whatever the outcome of the inquiry, he hoped that the U.N.’s history of helping people in Iraq would not be overlooked. “I hope the Iraqis realize that even if there have been wrongdoings by certain members on the U.N. staff, the U.N. ... did make a genuine effort to fill their humanitarian needs,” he said.

Annan said he selected the independent panel of highly regarded experts to untangle the many threads of national, political and personal interests complicating the issue. Besides Volcker, the panel includes Balkan war crimes prosecutor Richard Goldstone of South Africa and Mark Pieth, a Swiss criminal law professor with expertise in money laundering. It will start its work immediately.

At a news conference Wednesday, Volcker said: “I didn’t agree to do this lightly, but I think there are very important accusations made about the U.N., accusations about the administration of the program, and accusations about activities outside the U.N., which need to be resolved.

“There’s always some damage in the accusations, but what seems to be important is finding out whether there is any substance to those,” he added. “If there is substance to them, get it out there, get it out in a hurry and cauterize the wound.”