Oil-for-Food Inquiry Calls for Reforms

A yearlong inquiry into the U.N.’s oil-for-food program blames Secretary-General Kofi Annan, the Security Council and some member states for allowing mismanagement and corruption to undermine the program and enrich Saddam Hussein.

A preface to the Independent Inquiry Committee’s report, to be released today, says the U.N. requires stronger leadership and serious overhaul.

But it does not call for Annan to resign, saying the Security Council and others should share responsibility for the failures.

“Neither the Security Council nor the Secretariat leadership was clearly in command,” which enabled Hussein to define the boundaries of the relief program, says the preface, published Tuesday.

Decisions were “delayed, bungled or simply shunned” when the political and economic interests of Security Council member states conflicted with the U.N.’s administrative guidelines, it says.

The states mentioned included the United States, Russia and France.

The panel, led by former U.S. Federal Reserve Chairman Paul Volcker, called for four key reforms, including creating the post of chief operating officer and an independent auditing board, and said they should be implemented within a year.

The reforms complement a package of changes urged by Annan, raising the question of whether he will lead them or be swept away in the housecleaning.

“Now is the time to clean house at the U.N.,” said U.S. Sen. Norm Coleman (R-Minn.), who was one of the first to call for Annan to step down. “Kofi Annan should resign and allow a new team to implement a new commitment to accountability and transparency.”

Annan set up the independent panel last year to look into allegations of corruption and management failures in the $64-billion program intended to help Iraqis weather international sanctions imposed after Hussein’s 1990 invasion of Kuwait.

The report, expected to be nearly 1,000 pages, concludes that the program helped deprive Hussein of weapons of mass destruction and maintained minimal standards of nutrition and health for Iraqis.

But it added that the program’s accomplishments were obscured by the “dark shadow” of waste, inefficiency and corruption, both within the U.N. and the private companies that won contracts through the organization. Volcker’s next report will focus on private firms’ roles in kickbacks and smuggling related to the program.

The current report is expected to detail questionable activities by Annan’s son, Kojo, such as his evasion of $14,000 in taxes on a new car by invoking his father’s diplomatic status.

U.N. officials who were briefed after Volcker met with the U.N. chief last week said there was no evidence that Annan helped his son’s employer at the time, Cotecna Inspection, win a U.N. contract.

But the report will criticize former Secretary-General Boutros Boutros-Ghali, who led the U.N. when the oil-for-food program was created in the mid-1990s. In a previous report, Volcker detailed Boutros-Ghali’s direct role in determining who should receive U.N. contracts for the program and described two of his relatives’ alleged participation in a kickback scheme related to the program.

The report comes a week before world leaders converge on the U.N. for a 60th anniversary summit to discuss reforming the organization. Annan is to ask them to grant more independence for the office of the secretary-general, and the report’s damning conclusions about the management failures could either bolster his case or completely subvert it, diplomats say.

“At stake is the U.N. ability to respond promptly and effectively to the responsibilities thrust upon it by the realities of a turbulent and often violent world,” the report says. “It is precisely those qualities that too often were absent in the administration of the oil-for-food program.”

Annan, who had a chance to defend his actions to Volcker before the final report was published, told the BBC that he accepted responsibility for “inadequacies and failures” in some areas. But he said that responsibility should be shared for other failures, including the actions of companies that traded with Iraq, and the Security Council members that did not stop widespread smuggling and kickbacks long after becoming aware of them.

The report concludes that there are some things that only the U.N. has the experience, skills and legitimacy to do, such as cutting across borders to prevent conflict and deliver aid. But instances of “illicit, unethical and corrupt behavior” highlighted in the investigation raised questions about the United Nations’ ability to live up to its ideals, the report says.

“The inescapable conclusion from the committee’s work is that the United Nations organization needs thoroughgoing reform, and it needs it urgently.”