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UN Panel Finds Widespread Corruption in Oil-For-Food program

A year-long investigation of the U.N.-run oil-for-food program has concluded that the operation was riddled with corruption and inefficiency. The authors are recommending an urgent and thorough reform of the entire United Nations organization.

The independent inquiry commission, led by former U.S. central bank chief Paul Volcker, says competence, honesty and accountability were too often absent in administration of the $64-billion oil-for-food program in Iraq.

In a nearly 1,000 page report, the Volcker panel documents how differences among U.N. member states impeded decision-making, led to large-scale smuggling, and highlighted weaknesses in the U.N. administrative structure.

The document also shows how, as the program expanded, Iraqi leader Saddam Hussein found ways of turning it to his own advantage.

The report faults nearly every arm of the world body, including top management.

The report recommends "stronger executive leadership, through administrative reform and more reliable controls and auditing. It is to be presented to the Security Council Wednesday.

In a British radio interview, Secretary-General Kofi Annan said he expects lots of criticism. His spokesman Stephane Dujarric told reporters Mr. Annan would have no further comment until after Wednesday's Security Council meeting.

"He's braced himself for criticism," said Stephane Dujarric. "But we would not want to comment on the report until we have had a chance to see the whole report."

The introduction of the report, posted on the commission's Web site Tuesday, says the program succeeded in maintaining health and nutrition standards among ordinary Iraqis at a time of U.N. sanctions against Saddam Hussein's government.

At the same time, the authors note that as the years passed, reports spread of waste, inefficiency and corruption, even within the United Nations itself. Some of those reports turned out to be rumor and exaggeration. But the authors concluded that "much, too much, turned out to be true".

Britain's U.N. Ambassador Emyr Jones-Parry called the Volcker panel's findings "damaging".

"I don't think there is any doubt that overall, the management of the program, especially the publicity associated with it, has been damaging," said Emyr Jones-Parry. "I think it's been exaggerated, but nonetheless it has been damaging."

As damaging as Wednesday's report is likely to be, the Volcker panel hinted the worst might be yet to come.

The introduction released Tuesday says that while the report reveals serious instances of illicit, unethical or corrupt behavior within the United Nations, the oil-for-food program's difficulties go beyond what it calls "personal malfeasance."

The commission is promising a final report that will document what it calls "wholesale corruption," within the program, among private companies that were manipulated by Saddam Hussein's government. Committee sources say that final report is likely to be issued next month.