UN Launches Inquiry into Oil-for-Food Scandal Amid Allegations of Corruption and Bribery

Strategic Insights -

The United Nations' oil-for-food program, established in 1996 to alleviate poverty and misery in Iraq, has become embroiled in a massive scandal involving allegations of corruption, bribery, and kickbacks. The UN has launched an inquiry into the program, led by Paul Volcker, a former chairman of the US Federal Reserve Board, to investigate claims that Iraqi dictator Saddam Hussein and his associates used the program to embezzle billions of dollars. The inquiry is also examining allegations of bribery involving senior UN officials and diplomats from several member countries.

Key Takeaways:

  • The oil-for-food program, established in 1996, was the largest humanitarian program in UN history, handling almost $70-billion worth of oil revenue over seven years.
  • The inquiry is investigating allegations of corruption and bribery involving senior UN officials, including Benon Sevan, the UN undersecretary-general in charge of the oil-for-food program.
  • A list published in an Iraqi newspaper revealed that Saddam Hussein's regime distributed oil vouchers to individuals, including a former French minister of the interior, politicians from several Middle Eastern countries, and a senior bureaucrat from the Russian president's office.
  • The UN had been reluctant to launch a full-scale investigation, but UN Secretary-General Kofi Annan opted for an independent inquiry, which has the backing of the UN Security Council.
  • The inquiry has the challenge of subpoenaing evidence and forcing individuals to testify, given its lack of authority to compel cooperation.
  • The UN's Office of Oversight Services had been promoting an internal investigation, which was actively supported by France, Russia, and China.

Statistics:

  • The oil-for-food program handled almost $70-billion worth of oil revenue over seven years.
  • An estimated $10-billion was siphoned off from the program between 1996 and 2003, accounting for about half of which involved padded invoices.
  • The UN program permitted the Iraqi government to withdraw funds to pay for imports of food and other necessities.
  • The oil-for-food program was marred by allegations of cheating, including smuggling of crude oil through neighboring nations.

Sources:

  • The New York Times
  • The Globe and Mail
  • The Associated Press
  • Iraqi newspaper (published last month, no specific date mentioned)
  • US General Accounting Office investigation
  • UN Security Council resolution (no specific reference given)