April 20, 2004 | Broadcast

Kudlow & Kramer

Next up on K&C&C, we know Saddam Hussein pocketed oil money instead of buying food under the UN’s oil-for-food program. But did he use that cash to fund terror, including al-Qaida? So here’s Claudia Rosett, senior fellow at the Foundation for Defense of Democracies.

Claudia, you’re just writing some of the best darned stuff of anybody in the country, and let’s go right to one of your key points. During the period where al-Qaida kind of came out and flowered, which is more or less ’98, ’99, 2000 with the fatwa…

Ms. CLAUDIA ROSETT (Foundation for Defense of Democracies): Yeah.

KUDLOW: …that seemed to be the period where Saddam’s oil-for-food rip-off really started to flower. Is there a link between the two?

Ms. ROSETT: It’s a question that I think needs to be seriously asked. I have no evidence that there was. On the other hand, there was both motive and substantial opportunity, as is now obvious from the scandal going on around oil for food. Saddam was, in theory, under sanctions at that time. But at that point the program–it was clear that he was able to game the oil-for-food relief program, and it is by now clear that he was pretty much able to send money in many ways through fronts to all sorts of places. And there are, in fact, two documented links that would have led to terrorist groups. At this point, before the investigations have reported in, before the UN investigation has even begun, this is a question that should be part of the investigation.

KUDLOW: Well, this is just going to be one heck of a huge scandal at the United Nations.

Ms. ROSETT: Yeah.

KUDLOW: I mean, I think it’s going to reach right…

Ms. ROSETT: Yeah.

KUDLOW: …into Kofi Annan’s office. But let me ask you this: Two al-Qaida fund-raising agents, Youssef Nada and Idris Ahmed Nasreddin–you cite them in your work; other people have cited them.

Ms. ROSETT: Yeah.

KUDLOW: These guys, coincidentally, were in the middle of oil-for-food and al-Qaida.

Ms. ROSETT: Yeah, which should worry us greatly. And, in fact, you can look at, in one of the earliest oil buyers–Saddam, under the oil-for-food program, got to choose his own oil buyers; this was part of the problem. And the UN basically waved them ahead. And we started looking through the list of oil buyers. Saddam chose, you know, shell companies in Switzerland, front companies in Liechtenstein, companies in Panama, which is the allegation now involving Banan Savan, the head of the program–Cyprus. You know, what were these doing on the list? And the UN just waved this through. And this one, in particular, was one of the early ones on the list.

And you can wonder many things, and these questions need answering. And, to my knowledge, while Treasury has had an investigation going on into Saddam’s assets, the documentation on the oil-for-food program has been–it’s very unclear where it’s even been, you know. It hasn’t all been turned over to the US authority in Baghdad. It’s not clear that it’s all still somewhere at the UN proper. It’s not clear that it was turned over, copies intact, to the General Accounting Office. And basically, as far as I know, no official investigation at this point–there are private people looking into this, but…

LIZ CLAMAN, co-host:

Sure. But you found some things, particularly with UN links. Like, for example, this really jumped out at me. Kofi Annan, you say, allowed, approved, the use of about $20 million in oil-for-food funds to pay for something called an Olympic sports city in Iraq.

Ms. ROSETT: Oh, Lord, yeah.

CLAMAN: Well, we’ve already seen NBC, post-war, go in and do an interview with a lot of these athletes who were beaten if they lost their games. I mean, there was not any kind of Olympic city that he was building to kind of revere these athletes. How could this have happened? What kind of corruption and how deep does it go with the United Nations?

Ms. ROSETT: Oh, this is a potentially vast thing. It implicates officials that may have been paid off through the program, according to allegations now surfacing that are looking more and more credible. It involves the UN secretariat, which had hands-on management of the program. They were the chief interlocutors with Saddam. They had an enormous staff–you know, 1,000 people, international staff–and 3,600 Iraqis administrating this thing. Somehow missing this entire thing, it involves the question of why the UN chose to keep it so secret. You know, Kofi Annan did not have to make this a program that was kept confidential. If the list–for instance, if you on the show had looked at the list in 1998 and seen that Saddam was suggesting that 12 companies based in Switzerland should be among the first 50 buyers on his oil list, you probably would have said, ‘That’s not…’

KUDLOW: Well, Claudia, we’re going to have to close it down…

Ms. ROSETT: Yeah.

KUDLOW: …but I want to ask you–you have reported, Bill Safire of The New York Times has reported, today the New York Post reports…

Ms. ROSETT: Yeah.

KUDLOW: …France and Russia had the bulk of the deals on this bad list.

Ms. ROSETT: Correct.

KUDLOW: And they are holding up the Security Council’s endorsement of Paul Volcker’s investigation.

Ms. ROSETT: Yeah. That sounds a little bit hypocritical, don’t you think?

KUDLOW: Really.

Ms. ROSETT: Sure. And that’s got to stop. At some point our own government should stand up and say, ‘We will not allow this to continue.’ We should have done that last year.

KUDLOW: All right.

CLAMAN: Claudia, thank you very much.

Ms. ROSETT: Thank you.

CLAMAN: Claudia Rosett.

KUDLOW: Thanks, Claudia.

Ms. ROSETT: Thank you.

CLAMAN: Next, an eBay-Amazon earnings preview.

And, later, can “Kill Bill 2” save Disney? Can anything at all save Michael Eisner? And is there still any chance of a takeover by Comcast? Stay with us.