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Former US Central Banker Named to Head Iraq Oil-for-Food Probe - 2004-04-17


Former U.S. Federal Reserve Board chief Paul Volcker has been chosen to head an independent investigation into the oil-for-food program that the United Nations ran in Iraq. However, formal announcement of the appointment is being held up while the Security Council debates whether to formally endorse the probe.

U.N. spokeswoman Marie Okabe says Mr. Volcker has tentatively agreed to lead the probe into allegations of massive corruption in the $67-billion oil-for-food scheme. She said two others were named to serve on a panel with Mr. Volcker, both with extensive investigative experience.

"There are three persons who have been identified," he said. "They are Paul Volcker, former head of the U.S. federal reserve bank, Mark Pieth, of Switzerland, an expert on money laundering for the Organization for Economic Cooperation and Development, and Richard Goldstone, of South Africa, a former prosecutor for the international tribunal on war crimes."

But Ms. Okabe said while the selections have been made, the panel members have asked that their appointments not be finalized until the Security Council formally authorizes the investigation.

"Security Council members are discussing the possibility of such a resolution. The panel will not be formally announced before the council members reach a decision on this point," he said.

U.N. diplomatic sources, however, say negotiations on a Security Council resolution appear to be stalled. Some Council members are reported to be arguing that specific authorization of the investigation is unnecessary.

The oil-for-food program was set up in 1996 to allow Saddam Hussein's government to sell oil to buy humanitarian goods for the Iraqi people. The U.S. General Accounting Office alleges Saddam pocketed more than five-billion dollars from smuggled oil, and took in four billion more in kickbacks and surcharges. The U.N. monitored program ended in November, but while it was in operation it allowed Saddam's government to decide on the goods it wanted, who should provide them, as well as who could buy Iraqi oil.

The Security Council was advised several times over the years of possible corruption, but was unable to reach a consensus on what to do abut it. Companies and officials from France and Russia, two veto-wielding Security Council members, are alleged to have profited illegally from the program.