July 14, 2004 | The Wall Street Journal

Drip, Drip, Drip; More Oil for Food Details Leak Out. When will the U.N. Come Clean?

Kofigate continues. Another stack of secret United Nations Oil for Food do***ents has now reached the press, this batch procured by congressional sources and providing–at long last–a better view of Saddam Hussein's entire U.N.-approved shopping list. This huge roster of Oil for Food relief contracts fills in a few more of the vital details about Saddam's “humanitarian” partnership with the U.N., spelling out the names of all his U.N.-approved relief suppliers and the price of every deal.

We need no longer wonder which Russian company got the contracts, on the eve of war, in February 2003, to sell broadcasting gear to Saddam, or for how much. The U.N. list says Nord Star, from which Saddam–approved directly by Secretary-General Kofi Annan's office, in the name of relief, in the thick of the U.N. debate over Iraq–ordered up $3.4 million worth of TV studio equipment. Or, if one wants to admire the versatility of Saddam's Russian suppliers, it's now clear it wasn't just one Russian oil firm, Zarubezhneft, that made a sideline out of selling milk to Saddam. In late 2002, Russia's Kalmyk Oil & Gas Co. did a deal to supply Iraq with $1 million worth of “instant full cream milk powder.”

And, if anyone has been wondering exactly which nameless Saudi supplier backed out of a $5 million contract to sell vegetable ghee to Iraq when the U.N., post-Saddam, began renegotiating a kickback surcharge of some 10% out of the remaining Oil for Food contracts, the name on the U.N. list is the Al Riyadh International Flower Co. (Which, by the way, turned up last year on a Pentagon list of Oil for Food suppliers overpaid by Saddam, with overpricing in Al Riyadh's case estimated at about 20%, and total overpayment on three contracts estimated at $8.6 million.)

This kind of information won't get you all the way to confirming the precise who, when and how-much of the illicit side deals, the U.N.-condoned influence peddling, the billions in graft and smuggling, that became the hallmarks of Oil for Food. But if, during the course of the seven year Oil for Food program, the U.N. had made a habit of releasing instead of hiding such basic details as names and prices, there might have been enough public alarm raised early on so that it might not now be necessary for anyone to investigate the program.

Transparency during Oil for Food, instead of leaks after the program ended, would have brought before the public, much sooner and more clearly, not just the strange bent of Saddam's business with his pals in places like France, Syria and especially Russia, but also his taste for selling oil via such financial hideaways as Cyprus, Liechtenstein, Panama and, above all, Switzerland. That might have fueled many more calls, much earlier, for reform. There might have been no need for the eight or nine (or have we reached 10?) investigations now in motion.

Had the U.N. been forthright about Oil for Food, there might have been no need last summer for Pentagon auditors to check the strangely high prices on many Oil for Food contracts, and report back that this U.N. relief program had entailed a spree of overpayments for such stuff as Tunisian baby food and Syrian bathroom sets–overpricing being a route for Saddam's regime to collect kickbacks from U.N.-approved suppliers. And had the U.N. published this latest leaked list, even in its current form–which, as a printout instead of a computer file, does not lend itself to a quick search–perhaps someone during those interminable Security Council fights of early 2003 might have gone through the painstaking job of adding up what France and Russia were actually raking in from Saddam's regime. Please stay tuned, especially should anyone now choose to leak the U.N.'s secret list of individual oil contracts, which would help complete the picture.

This list means progress, at least, in the great paper chase attending upon efforts to explain to the aggrieved Secretary-General Kofi Annan and his senior staff why a U.N. relief scandal involving $10 billion or more in embezzlement might be of interest even to those not working for Paul Volcker's U.N.-authorized investigation. A vast U.N. spreadsheet leaked some time back showed only the relief contracts from 1997 through early 2001, more than two busy years short of the full program.

This latest list, which runs to hundreds of pages, totaling tens of billions worth of deals, goes all the way from the first relief contract negotiated by Saddam's regime with the Australian Wheat Board, in 1997, to the final spate of Saddam's contracts processed in mid-2003 for such goods as millions of dollars worth of “detergent” from Egypt, Germany, Saudi Arabia and Syria.

Along the way, this list offers an opportunity to browse such stuff as an order for $286,481 worth of “milk and yogurt homogenizer” from the financial fields of Liechtenstein. Or the dozens of contract entries, totaling hundreds of millions worth of Oil for Food business, awarded by Saddam to one of his regime's own front companies, as designated in May by the U.S. Treasury: Dubai-based Al Wasel & Babel. It would be helpful, of course, to know the official quality and quantities of goods purchased, information still socked away in the secret hoards of the actual contracts. Although, given recent General Accounting Office testimony that Cotecna, the Swiss-based inspections firm hired by the U.N. to check Oil for Food imports into Iraq, looked at only 7% to 10% of the deliveries, we may have to hunt elsewhere for confirmation of just how well these sales figures reflect actual shipments of, say, authentic sugar and genuine steel.

But bit by bit, the picture comes into sharper focus. More than a year ago, while trolling the U.N. Web site looking for clues as to what in creation was really going on inside the black hole called Oil for Food, I came across a most wondrously cryptic notation. It appeared on the U.N.'s public list of Iraq relief contracts, a list so generic that it was impossible to identify Saddam's business partners, or how much of what, exactly, they were selling, or at what prices. But even in that bland landscape–in which, for instance, the lone word car served to describe $5 million worth of vehicles supplied via two contracts out of the United Arab Emirates–one entry stood out for sheer vagueness: The contractor's country was Russia, and the contract was for “Goods for Resumption of Project.”

What goods? What project? Querying the U.N. produced only the answer that such details were secret. The U.N. was protecting the confidentiality of Saddam and his goods-for-resumption-of-project suppliers.

Now, thanks to assorted studies and leaked lists, it is possible with a little cross-referencing to discover that the supplier was a Russian state company, Technopromexport, and the contract was for “mechanical equipment,” sold to Iraq for $1,475,261. The question remains: Why should this have been a U.N. secret?

The U.N. to this day has refused to release any more detail to the public, first citing the need to protect the privacy of Saddam and his business partners, then sending out letters in April reminding the overseers of oil sales and relief imports to keep quiet, and now deflecting all inquiries to the Volcker investigation–which doesn't answer questions about Oil for Food and won't have a final report out until at least the end of the year.

It's intriguing, in its way, to trace the clues back and forth, trying to piece together the biggest jigsaw puzzle of graft, fraud and theft in the history of humanitarian relief. But wouldn't it have spared us all a lot of grief had the U.N. chosen to run this program not as a private consulting arrangement with Saddam, but as an open book? Just this week, U.N. spokesman Stephane Dujarric reiterated to the San Francisco Chronicle what has clearly become Mr. Annan's party line–that the Secretariat, which collected a $1.4 billion commission on Saddam's oil sales to run this program, was “not mandated to police the contractors; it's not the way the program was set up by the Security Council members.”

Interesting how Mr. Annan bowed to the Security Council when it was the ordinary people of Iraq being robbed, but now that his own office is under fire, he feels free to let his subordinates run around blaming the Security Council. Wasn't anyone at the U.N. paid to think?

— Ms. Rosett is a fellow at the Foundation for the Defense of Democracies and the Hudson Institute. Her column appears here and in The Wall Street Journal Europe on alternate Wednesdays.



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