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UN Panels Probing Iraq Oil-for-Food Program Argue Over Document Access - 2004-05-21


The head of the U.N. appointed panel that is looking into allegations of corruption in the Iraq oil-for-food program says competing investigations are waging a tug of war over (are arguing over) access to possibly incriminating documents. The panel will focus first on charges of misconduct by U.N. staff.

Former U.S. Central Bank chief Paul Volcker says it may be at least a year before his investigation into oil for food corruption allegations is complete.

Secretary General Kofi Annan appointed the highly respected banker last month amid a swirl of charges that former Iraqi leader Saddam Hussein used the program to shower cash and favors on friendly business and governments.

Mr. Volcker said he hopes to prepare a preliminary report within three months. That will focus on allegations of misconduct by U.N. staff, up to and including Oil for Food administrator Benon Sevan.

Mr. Sevan has strenuously denied the allegations. The Volcker panel will then set to work on the broader question of whether corporations and possibly government officials may have been involved with Saddam Hussein in a scheme to skim billions of dollars in illegal profits from the program.

Mr. Volcker says he has already dispatched a team of experienced investigators to Baghdad to establish contacts with officials and to seek access to Iraqi records.

"Very important records are available in Iraq, and we think it is crucial that we get a degree of control over these records if we're going to have a satisfactory investigation, and we attach considerable priority to that," he said.

Mr. Volcker acknowledged that there are currently several investigations battling for control over relevant documents in the case. But he said he considers his U.N. appointed probe the authoritative inquiry.

He denied, however, having any information about documents seized during a U-S and Iraqi raid Thursday on the offices of Iraqi Governing Council member Ahmed Chalabi, who is conducting his own oil-for-food probe.

"It didn't cross my mind when I heard about the Chalabi business this morning it had anything to do with my team going to Baghdad," he said. "I'm aware that there's been a bit of a tug of war in Baghdad about these records. They are of interest to a lot of people. And I can understand, they are of interest to us. Our concern is that we have access in a way that is unfiltered and unbiased, and that is as you can imagine quite a challenge under circumstances that exist in Baghdad."

Mr. Volcker said his investigators are hoping to strike a deal on cooperation with the U.S. funded Supreme Audit Board in Iraq, which is conducting its own oil for food probe.

The humanitarian program was started in late 1996 as a way to ease the pain on average Iraqis from a crippling U.N. mandated economic embargo on Iraq. Saddam Hussein's government was allowed to sell oil to purchase commodities such as soap, flour and food items.

Many of the documents alleging bribes in the program were believed to be under Ahmed Chalabi's control.

The U.S. General Accounting Office last month said Saddam Hussein raised $4.4 billion dollars in illegal revenues by imposing surcharges and commissions on companies supplying goods under the program.

Auditors say Saddam's government smuggled another $5.7 billion worth of oil out of the country, using the humanitarian program as a cover.

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