March 29, 2005 | Broadcast

Kudlow & Company

Secretary-General KOFI ANNAN (United Nations): After so many distressing and untrue allegations have been against me, this exoneration by the independent inquiry obviously comes as a great relief.


All right. There you have it. Today’s report on the UN oil-for-food scandal says Kojo Annan covered up the deal with a contractor but that his father, UN Secretary-General Kofi Annan, didn’t know about it. Many questions remain. Is Kofi cleared? Is he absolved from the many contradictions of his past, or is this man so tainted, he cannot possibly bring reform to this troubled world institution?

Joining me now to discuss, Representative Jeff Flake, Republican of Arizona and co-sponsor of the Oil-for-Food Accountability Act, and ace reporter, star reporter Claudia Rosett, journalist in residence at the Foundation for Defense of Democracies, frequent representative of The New York Sun and other publications.

Welcome to both of you.

Claudia, if I may begin with you, first of all, I’m so glad you’re home safely from Beirut, and thank you for reporting from Beirut for us. And, secondly, are you…

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

KUDLOW: …satisfied with the Volcker report and is Mr. Secretary-General Annan off the hook?

Ms. ROSETT: No, I’m not satisfied, and I find amazing the statement from Secretary-General Kofi Annan that he has been exonerated. He has not been exonerated. The Volcker committee has not found evidence that he knew that his son was receiving enormous payments from a major oil-for-food contractor. That’s different from saying there is none, because we’re dealing with a situation where there have been doctored documents on the Cotecna side, shredded documents at the UN, and also this is a tiny slice of a huge, corrupt program, Larry. There is so much more that the Volcker committee has not yet begun to address where the secretary-general played a large part.

KUDLOW: Right. And the management was bungled by all accounts, I think, even the…

Ms. ROSETT: Incredibly.

KUDLOW: …Volcker report referred to that.

Let me bring Congressman Flake in. Jeff Flake, welcome back to the show.

Representative JEFF FLAKE (Republican, Arizona): Thank you.

KUDLOW: Your Senate colleague, Norman Coleman, issued a press statement. I think Mr. Coleman is overseas in the Middle East, but he issued a press statement where he continues to call for Mr. Annan’s resignation from the UN, saying his management skills are poor and he’s the wrong guy to lead us into reform in the UN in the 21st century. Do you share Mr. Coleman’s view?

Rep. FLAKE: Well, I share his view certainly of the incompetence that we’ve had at the UN in dealing with this issue. However, I have a slightly different take on it. I’m worried that if Kofi Annan is forced to go, then the public will say, `Well, we’ve exacted our pound of flesh and let’s stop investigating.’ This is much larger than Kofi Annan, and it goes much deeper. And I fear that we won’t dig much deeper if he goes. So I’d like to see this investigation go on. Certainly it’s not finished. Paul Volcker is not finished, and when he finishes, I think we still have a lot of work to do.

KUDLOW: Mr. Flake, do you agree with Claudia Rosett that the managerial bungling, everything surrounding the oil-for-food scandals, $61 billion and so forth, $20 billion in bribes, is that what you’re referring to, that we have to explore much deeper into those areas?

Rep. FLAKE: You bet. You bet. As she mentioned, you have shredded documents. We haven’t had access to the documents that we’ve asked for. When we do ask for internal documents, it takes an audit. It takes years and years for the UN to comply. That all has to change, and there’s a lot of investigation that has to go on here still.

KUDLOW: Claudia Rosett, the Volcker report says there’s no documentary evidence that Mr. Kofi Annan did any bid-rigging or used influence to help his son get a Cotecna contract, but I want to ask you about a specific event, evidence that has come to pass recently. This Pierre Mouselli…

Ms. ROSETT: Yes.

KUDLOW: …a go-between, a kind of a broker. He has reported I guess to you–we had Roger Simon, the blogger, on last night.

Ms. ROSETT: Yeah.

KUDLOW: Mouselli says that there was a two-hour meeting in South Africa attended by Mr. Kofi Annan, Mr. Kojo Annan…

Ms. ROSETT: Right.

KUDLOW: …and Mr. Mouselli, and that according to Mr. Mouselli that meeting was specifically called to discuss Cotecna business, meaning the inspections, the food exports…

Ms. ROSETT: Yeah.

KUDLOW: …the oil trading. And then a few months later, by the end of 1998, Cotecna got a contract. Now these guys are meeting, and a few months later, Cotecna gets a contract and Mr. Volcker’s not connecting the dots? I have a problem with that.

Ms. ROSETT: Oh, with good reason. There are a lot of dots that the Volcker committee has left unconnected, you know, including on top of what you just described, when this matter of Kojo’s affiliation with Cotecna broke in the British press in early 1999 just after they got the contract, who did Kofi Annan phone to check on the state of affairs? He phoned his old buddy, Michael Wilson, who was working at Cotecna, to find out what was going on. He then had a report issued in a day at the UN, which even the Volcker committee said was inadequate, that cleared everything, and from that point on, press inquiries were brushed off as, `This has been investigated. A secret, brief report has been issued. We now know in a day.’ That was the extent of it.

Now this is awfully incestuous dealing. Kofi Annan is checking with his old family friend who was part of Kojo Annan’s employment with Cotecna from the beginning in 1995, and we are supposed to assume now that this was all hands-off, that Kofi Annan knew nothing about it. In fact, Larry, in the year in question, 1998, when all these things took place, Kofi Annan was up to his neck in oil-for-food. That was the year he flew to Baghdad to meet with Saddam. That was the year he urged that the program be expanded and oil parts be included in it. That was the year that Saddam kicked out the weapons inspectors while Kofi Annan urged that the program get ever larger. And somehow the conclusion–you know, there are a lot of facts set out in this report, which actually still needs close reading. We’ve all just been handed it today. The conclusions come sort of oddly short of what the actual picture would suggest.

KUDLOW: Yeah. All right. We’re going to take a quick break here, but I’ll tell you, Claudia, I’m so disappointed that Mr. Volcker’s group did not dig deeper into all of this. It just begs credulity. Anyway, our two excellent guests are going to stay. Much more on the future of the UN. Kofi must go. That is still my view. I happen to agree with Senator Norm Coleman.

Anyway, the show is pro-business. And by the way, the UN should accept the accountability and scrutiny that any company in this country and any CEO would be subjected to. So please keep it with KUDLOW & COMPANY. We are coming right back after a short break.

Announcer: Still to come, presidential polls, approval numbers dipping. What’s the reason? Our pollsters have answers. Stay tuned. KUDLOW & COMPANY will be right back.


KUDLOW: Welcome back, everyone. We’re with Representative Jeff Flake, Republican congressman of Arizona, and ace reporter Claudia Rosett, journalist in residence at the Foundation for Defense of Democracies and the New York Sun.

Mr. Flake, let me go to you. I assume from your earlier remarks you have every intention of pursuing additional congressional investigations on your side in the House. Let me ask you this. Claudia Rosett mentioned how Kofi Annan had traveled to Baghdad on several occasions. We have also learned that Saddam’s diplomats were pursuing Kojo on several occasions and we also know that there were meetings in the secretary-general’s UN office with the Cotecna representatives and Kojo. So again, I believe that these conclusions by Volcker just beg credulity and won’t stick.

What’s your take, please?

Rep. FLAKE: I couldn’t agree more. The House International Relations Committee has had several hearings. We have a new subcommittee on the committee that is looking into oversight at the UN. And so we’ve had a couple of hearings. We’ll have several more on this topic. Also I’ve introduced legislation with Senator Ensign in the Senate. It had over 70 co-sponsors before the last Congress ended. It’s now been introduced in the House, and we have 50-some already. We’ll soon eclipse that 70-some mark, and people want answers. And whether you’re a supporter of the UN or not, if you believe that the UN has to have credibility, the only way for it to have credibility moving forward is to answer these questions, and they haven’t been answered.

KUDLOW: That is such a terribly important point, sir, if I can editorialize, because I’m a wanna-be UN supporter.

Rep. FLAKE: Right.

KUDLOW: I think it can do some good if it’s cleaned up and actually reformed.

Claudia, I’m going to give you the last word. We’re going to–we’ll have you on every night this week if we have to to get this story out, and I hope you’ll help us with it. But, lookit, why is the US State Department so quick to back Kofi Annan, to endorse the Volcker report and to almost close the door on any of the key issues of further investigation that you and Mr. Flake are raising? Why are we just throwing in with this guy?

Ms. ROSETT: That’s a State Department culture that’s as big a problem in its own way as is that of the United Nations. You know, one of the great challenges for new Secretary of State Condoleezza Rice is how to fix that. In fact, it’s been interesting. There has been–the UN, which has presented itself, and Kofi Annan in particular, as a sort of aggrieved victim in this scandal, although they created it basically, has sort of pointed over and over to attacks from the administration. In fact, the administration has been remarkably silent on this. Congress has been investigating. The press has been asking questions. The administration has been most inappropriately quiet for some time on the whole thing.

KUDLOW: Claudia, last five nanoseconds…

Ms. ROSETT: Yeah.

KUDLOW: Do you think new UN Ambassador John Bolton is going to be totally quiet on this?

Ms. ROSETT: One can really hope that he will continue to speak up as he has done in the interest of simply stating the truth. In fact, my recommendation would be, don’t even try to game the UN.

KUDLOW: Right.

Ms. ROSETT: Let’s just have the truth.

KUDLOW: Sure. We need the truth. We need reform. We need to use that institution…

Ms. ROSETT: Yeah.

KUDLOW: …to its best potential, for heaven’s sakes, for world peace and security for the United States. Claudia Rosett, thanks a million. Congressman Jeff Flake, thanks a million.

Rep. FLAKE: Thank you.

KUDLOW: Hope to see both of you soon.