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US Official: Saddam Cunning in Abusing UN Oil-for-Food Program

A U.S. official says former Iraqi dictator Saddam Hussein used a range of techniques as part of efforts to circumvent United Nations oversight of the Oil-for-Food program. The comments came during the latest U.S. congressional hearing into corruption in the U.N. program.

In their investigations, U.S. lawmakers have learned that Saddam Hussein made use of a variety of tactics as he undermined, and profited from, the Oil for Food program.

Begun in 1996, the program continued until just before the U.S.-led invasion of Iraq. It provided food, medicine and other humanitarian goods to Iraqis by allowing quantities of Iraq's oil to sell on the international market

As the program was set up, the Iraqi government was permitted to choose oil byuers and suppliers of food and other goods. Iraq had conducted a public relations campaign and a course of action to influence members of the U.N. committee in New York (called the 661 Committee) responsible for reviewing humanitarian contracts and overseeing oil pricing.

Thomas Schweich, is chief of staff at the U.S. Mission to the United Nations.

“They recognized the inherent shortcomings in a committee that is just basically reviewing paper in New York,” he said. “So what they did is they developed a whole pull-down menu of manipulative mechanisms in order to circumvent that paperwork. There were surcharges, topping off [of oil shipments], influence-peddling, product substitution, product diversion, phony service contracts, phantom spare parts, shell corporations, illusory performance bonds, hidden bank accounts, and then plain old fashioned bribery and kickbacks to the tune of several billion dollars.”

The U.N. committee reviewed some 36,000d contracts during the life of the program. Each country on the committee could place a hold on certain contracts if wrongdoing or irregularities, such as with pricing of oil contracts, were suspected.

However, what Mr. Schweich describes as an aggressive assault by Saddam Hussein on the oversight process, combined with unhelpful actions by other members of the committee and the U.N. Security Council, allowed the Iraqi government more room to maneuver:

“The efforts of the U.S. and Britain to counter or address non-compliance were often negated by other member's desires to ease sanctions on Iraq,” he added. “The atmosphere in the committee, particularly as the program evolved in the late 1990's, became increasingly contentious and polemic. The fundamental political disagreement between members over the council's imposition of comprehensive sanctions was often exacerbated by the actions of certain key member states in advancing self-serving, national economic objectives.”

But many lawmakers, including Congressman Christopher Shays, believe the United States and others should have been more alert:

“Sitting on the 661 Committee, a blind man could have seen that outcome was inevitable,” said Mr. Shays. “But for too long we were all blind to the sordid realities of a U.N. Security Council mired in Saddam's anti-sanctions propaganda and the unseemly pursuit of commercial interests by some member states.”

In other testimony, a former U.N. political affairs officer cited a history of secrecy, and a lack of transparency accountability, in U.N. committees as contributing to poor decisions and paving the way for corruption in the Oil for Food Program.

However, Joy Gordon, an academic who studied the Iraq sanctions process and Oil for Food Program, said the United States and other Security Council members must shoulder a large part of the blame in, her words, “not showing significant concern regarding smuggling and kickbacks.”

Abuses of the Oil for Food program, she says, occurred not because of a lack of systematic monitoring but in spite of an elaborate, multi-level monitoring and oversight system.

Lawmakers and witnesses at this latest in a series of hearings said they are looking forward to the final report, expected later this year, of the independent commission probing corruption in the U.N. Oil-for-Food program.