June 17, 2005 | Broadcast

The Wall Street Journal Editorial Report

At the center of the storm is two-term Secretary General, Kofi Annan.

KOFI ANNAN: I have lots of work to do, and I’m going to go ahead and do it …

Earlier this year, Annan rejected calls for his resignation after the Volcker Commission failed to turn up conclusive proof of any misconduct in his handling of the Iraq Oil for Food program, which was supposed to allow Saddam Hussein to trade oil only for food and other humanitarian goods. Annan insisted that he knew nothing about a 60 million dollar contract to a Swiss company called Cotecna to monitor shipments, a company which also employed his son, Kojo.

This week, a potential smoking gun e-mail surfaced, alleging that a meeting took place between the company and the Secretary General, just weeks before Cotecna won the lucrative contract. Annan insists no such meeting ever took place.

The Secretary General has no recollection of such a meeting.

The U.S. has a vested interest in how U.N. money is spent. The U.S. pays nearly a quarter of the U.N.’s operating budget, about 500 million dollars a year.

It is not in order to debate the subject of accountability of the United Nations …

This week, the U.S. House of Representatives reinforced demands for reform with a budgetary shot across the U.N. bow, by considering a bill that would withhold up to half of the U.S. contribution if there are no reforms.

This act sends an unmistakable message that specific reforms must be enacted, or face real consequences.

Among the changes often mentioned are: changing the U.N. budget process so that the U.S. has more control over how its money is spent; creating an independent oversight board to prevent future Oil for Food scandals; banning any country under investigation for human rights violations from membership on the U.N. Human Rights Commission. The Commission issues frequent resolutions condemning Israel, while overlooking offenders among its members, which include Sudan, Libya, Zimbabwe, and China.

Have been amongst the most divisive …

And, developing a more effective U.N. mechanism to prevent genocide, like the one in Rwanda where U.N. peacekeepers, as depicted in the film Hotel Rwanda, failed to intervene.

DON CHEADLE: How can they not intervene? Hundreds of thousands are dying.

RUSSELL CROWE: We’re here as peacekeepers, not as peacemakers.

John Bolton, the man President Bush has nominated to lead this tough new charge for reform, as new U.S. ambassador to the U.N., is an outspoken critic of the world body. He has come close to declaring the U.N. irrelevant.

JOHN BOLTON: The secretary’s building in New York has 38 stories. If you lost 10 stories today, it wouldn’t make a bit of difference.

PAUL GIGOT: Leave it to you. The Bolton nomination is expected to be approved in the next few days. Joining us to discuss all this is Claudia Rosett, who has reported and written extensively on the U.N., and has just been awarded the Eric Breindel Prize for journalism for her coverage of the Oil for Food scandal. Claudia, welcome.


PAUL GIGOT: How seriously should we take this latest revelation about Kofi Annan and what he knew when about Cotecna?

CLAUDIA ROSETT: We should take it very, very seriously. The Secretary General at this point has had memory lapses, failures to recall, refusals to confirm, that stack up to just something monumental. And actually, at this point he is suggesting we should believe that he had no idea what his son was up to. And he was involved at every step, both in the Iraq program, the Oil for Food program, and he was also much involved in his son’s career. He helped Kojo get that job with Cotecna in 1995. He had Kojo staying at his house. He met Kojo at U.N. functions in at least four cities on three continents in the few months preceding the award of that U.N. contract, and there’s every sign that Kojo was there to lobby for it, which is in fact part of what this latest bombshell memo says.

PAUL GIGOT: Now the man who allegedly told the Secretary General about the Cotecna contract, Michael Wilson, has denied it again. This is the second time he’s denied it, having originally told investigators for the Volcker Committee that in fact he had told Kofi Annan. What are we to make of this contradiction?

CLAUDIA ROSETT: Well there’s one simple explanation, and that would be that the person who probably would have told Kofi Annan about it wasn’t Michael Wilson, Kojo’s friend at Cotecna, but Kojo. So what we actually need is the truth from Kojo Annan, who has, interestingly, refused to speak to anybody about this since last year, who won’t give the Volcker Committee any further interviews, who has excused himself from this entire investigation. And there’s no sign that Kofi Annan is making any vigorous effort to help bring Kojo back into the picture.

PAUL GIGOT: Of course, we should stress that Kofi Annan continues to deny that any such meeting took place, or that he did know it. Does this all mean that the fate of Secretary General Annan, that is his continued ability to remain in his job, hangs on what the Volcker Committee does? Because it’s looking at this new evidence, it’s looking at this new e-mail, and it’s going to come to some new conclusion, apparently, about how real it is.

CLAUDIA ROSETT: There is some suggestion that the Volcker Committee could make a great difference here if they were more forthcoming than they have been in things that I think were right under their nose. But it was very interesting that a source close to the Volcker Committee told your editorial columns this past week that lacking — I think the line was ³plausible disaffirmation,² Kofi Annan was truly in the soup at this point. I think ³plausible disaffirmation² is how your usual fed chairman says, ³Unless Kofi can prove that he really didn’t know what was going on.²

And you know what? If Kofi didn’t know what was going on, he had to be so oblivious to things that would have been obvious to any five year old sitting in his office at the United Nations that we must now start to worry very seriously, should he have been running that institution.

DAN HENNINGER: Well, that’s kind of the point. I think we’ve reached the point where, at this point in time Annan is probably safe. But I think the friends of the United Nations, and the friends of Kofi Annan, have got to think about whether we’re getting close to a situation where it’s either the institution of this individual. And that frequently occurs in situations like this.

One that I can think of most recently is the CEO of Morgan Stanley, Phil Purcell. There was no real concrete reason why he needed to resign except that the institution was beginning to suffer. And if this scandal reaches a point where it’s hurting the United Nations, then I think Kofi Annan has got to think about stepping aside.

PAUL GIGOT: Well, on the subject of hurting, you’re talking about a reform bill in the House of Representatives that is threatening to withhold 50 percent of something like the 500 million that the U.S. contributes to the U.N. every year, unless there is reform. That’s painful. That’s hurt. John, what’s going on here? There’s a lot of momentum behind this, isn’t there?

JOHN FUND: Well, members of Congress tell me, Paul, that the public is finally paying attention to this issue. The United Nations has never been really that popular out in the heartland. Now people are viewing it as a malevolent institution. And they want something changed. And this money that the United States puts in, we are constantly promised reform and we never seem to get it, the Oil for Food scandal being the latest example. So Congress is opposing the Bush administration, which wants to keep control of foreign policy to itself, and saying we want to put some curbs. If the United Nations promises reform, we’re not going to give the money until they actually meet the promise.

PAUL GIGOT: The Bush administration is opposing this, Dan. I mean, why?

DAN HENNINGER: Oh, I think one reason is because they find the United Nations useful in some areas, such as peacekeeping capabilities. I think George Bush would like to get some of that off of his plate and move it onto someone else’s, in areas like Darfur. And if the United Nations is willing to increase its peacekeeping capabilities, then I think they’d be happy to see him do it.

PAUL GIGOT: Claudia, there’s an argument being made by the opponents of this threatened spending cut, which is that great powers, like the United States, who make commitments to international bodies or anywhere else, they honor those commitments and pay up. What’s wrong with that argument?

CLAUDIA ROSETT: Because this is a desperately rotten international body. Because the intention when it was set up was an institution that would further peace and prosperity in the world. And in fact on level after level right now the U.N. in its cloistered bubble of diplomatic immunity and extreme and unnecessary secrecy about everything, including its money, has become a giant termite mound, basically. And we saw — it was sort of kicked open with Oil for Food because George Bush got rid of Saddam, who had bought up more than half the [UNINTEL] side of the Security Council, and who was the darling of Kofi Annan and the U.N. at that point in a sense. So yes, great powers have obligations to honor their commitments. Our commitments are to freedom, to democracy, to decency, honesty, transparency, competition, as it works in the modern world. And the U.N. right now is a champion, really, of none of those things.

PAUL GIGOT: I think there’s a larger issue here, too, which is that the U.N. has never really functioned. Let’s say you’re a champion of the U.N. You really want it to work. The U.N. has never in its history functioned very well unless the U.S. has been a partner. When you think about in its history, the most effective times for the U.N.: Korea, the first Gulf War, certain peacekeeping operations, not a lot of them but one or two. And when the U.S. is involved as the great power that it is, the U.N. can tend to be effective.

The danger here is if the U.N. doesn’t reform, and Kofi Annan keeps being a lightning rod for criticism, the U.S. will kind of move away, they’re won’t be a commitment to that body and you’ll end up with it becoming increasingly, I think, irrelevant — which brings up, John, the point about John Bolton and his ambassadorship nomination and the confirmation. Is he finally going to make it?

JOHN FUND: I think so, but what’s astonishing is, at the same time you have the U.N. get all of this negative publicity, and it’s becoming crystal clear that reform is needed, the Democrats in the Senate have decided to put down their markers and oppose Bolton. And I think it’s because they wanted a political scalp. They are so desperate to embarrass the Bush administration, they’re, I think, tempting fate with the politics of the future.

PAUL GIGOT: So it’s still a close run thing.

JOHN FUND: Very close.

PAUL GIGOT: All right John, thanks. Next subject.