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Oil-for-Food Audits Reveal UN Mismanagement


Internal United Nations audits of the $64 billion Iraq oil-for-food program have revealed widespread mismanagement. But, investigators say they have not found evidence of criminal activity.

The independent commission looking into the now-defunct U.N. oil-for-food program concludes that administrators were guilty of huge lapses in oversight. Internal audits released by commission chairman Paul Volcker reveal "serious irregularities," including mishandling of funds, fraudulent documentation and bureaucratic bungling.

The 58 audits, posted on the commission's Web site over the weekend, are U.N. documents used to monitor the program's activities. U.N. spokesman Farhan Haq says they were intended as a management tool for a program that had to be created from the ground up when the Security Council authorized the humanitarian program in 1995.

"The oil-for-food program was a vast and complex program; it had clearly growing pains as it was established, but we did do a number of audits which came out with a huge number of recommendations which by and large, the majority of which were implemented," he said.

A briefing paper released along with the audits singles out the U.N. Center for Human Settlement for special criticism. The program is part of U.N.-Habitat, one of nine U.N. agencies that helped implement the humanitarian program, is accused of mismanaging contracts that may have resulted in the loss of as much as $12 million.

After reading the briefing paper, China's U.N. ambassador, Wang Guangya, said it points to the need for changes in the world body's management procedures.

"I think there are some problems, but we cannot come to conclusions," he said. "Definitely there needs to be improvement in management; that is the lesson we should draw. To talk about misconduct it's a bit too early."

The Volcker commission was appointed by U.N. Secretary-General Kofi Annan last year to investigate allegations of widespread corruption in the oil-for-food program.

The commission is due to issue its first report at the end of this month on possible wrongdoing by U.N. officials. A second report, due later this year, will address the broader issue of how Iraqi leader Saddam Hussein may have subverted the program through bribes, kickbacks and massive oil smuggling.

At least five U.S. congressional committees are also looking into the corruption allegations. The head of one of the committees, Republican Senator Norm Coleman, has called for Secretary-General Annan's resignation.

In a report for the U.S. Central Intelligence Agency, former U.N. weapons inspector Charles Duelfer said Saddam's government illegally earned more than seven billion dollars in cash through oil smuggling and another three billion dollars in kickbacks and other schemes during the life of the oil-for-food program.

In an interview with the New York Times newspaper last week, Mr. Volcker said the first part of his investigation, into possible wrongdoing by U.N. staff, had not turned up any clear evidence of criminal activity.

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