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GAO denied access to oil-for-food audits
By David R. Sands
THE WASHINGTON TIMES
Dozens of internal United Nations audits of the troubled oil-for-food program in Iraq were routinely shown only to the U.N. official now at the center of an international scandal over kickbacks from the regime of Saddam Hussein, a congressional investigator said yesterday.
Joseph A. Christoff, director of international affairs and trade at the General Accounting Office, told a House hearing that U.N. auditors had refused to release the internal audits to GAO investigators probing the scandal that poured an estimated $10.1 billion from secret oil sales and inflated contracts into Saddam's coffers under the U.N. program.
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"We sure asked for them," Mr. Christoff testified to the House International Relations Committee, only to be told by the U.N.'s Office of Internal Oversight Services (OIOS) that the 55 audits dating from the program's birth in July 1996 through June 30, 2003, were "internal documents."
Rep. Jeff Flake, Arizona Republican, said he was considering legislation that would tie the U.S. contribution to the U.N.'s budget — 22 percent of the international body's total funding — to cooperation in the oil-for-food probe.
Several Republican lawmakers said the world body's management of the program called into question its competence to help in the political reconstruction of post-Saddam Iraq.
"If we're going to ask the United Nations to be a participant in bringing about stability in Iraq and helping us set up a government that is going to work over there, then, by golly, we have to be able to trust them," said Rep. Dan Burton, Indiana Republican.
Meeting with reporters in New York, normally low-key U.N. Secretary-General Kofi Annan lashed out at what he called "outrageous and exaggerated" press reporting on the scandal, saying the United Nations was being blamed for things — including vast Iraqi oil smuggling operations — that were widely known at the time and over which U.N. officials had no direct control.
"If you read the reports, it looks as if the Saddam regime had nothing to do with it," Mr. Annan said. "It was all the U.N."
While his office did not have day-to-day oversight of the oil-for-food program, "all this is being dumped on the Secretariat," Mr. Annan complained. "These allegations are doing damage."
Several House Democrats complained at yesterday's hearing that Mr. Annan and the United Nations were being made scapegoats in order to undermine their influence in Iraq and elsewhere.
Mr. Annan has appointed an independent panel headed by former Federal Reserve Chairman Paul Volcker to probe the oil-for-food program. The panel will have access to the internal management audits denied to the GAO, U.N. officials have said.
Mr. Christoff said yesterday that, under standing U.N. procedure, the confidential OIOS management audits would have been shown only to U.N. Undersecretary-General Benon Sevan, a close Annan aide who directed the oil-for-food program.
Mr. Sevan's name appeared on a list of 270 companies and individuals who reportedly received oil vouchers from the Saddam regime as part of a kickback scheme under the oil-for-food regime. A Baghdad newspaper, citing what it said were Iraqi oil ministry documents obtained after Saddam's ouster, published the list in January.
The GAO estimated that Iraq under Saddam earned some $4.4 billion in such kickbacks and surcharges between 1997 and 2002. Another $5.7 billion is believed to have come from oil smuggling.
Mr. Sevan, a Cypriot-born diplomat, has angrily denied the charges.
Critics have argued that an agency head would have a vested interest in burying an internal audit that reflected unfavorably on his performance. U.N. guidelines say that, in special cases, the OIOS findings would also be shown to Mr. Annan, but GAO officials were not told whether any of the audits were shared.
The GAO did receive seven "very brief" summaries of OIOS reports which revealed "a variety of operational concerns involving procurement, inflated pricing and inventory control, coordination, monitoring and oversight," according to the agency's report.
In one case, the U.N. inspectors found that the oil-for-food program contracted for winter supplies for refugees in northern Iraq at prices 61 percent higher than what local vendors were offering.
But Mr. Christoff said the GAO analysis did not turn up any evidence of wrongdoing by Mr. Sevan or other U.N. officials who managed the oil-for-food program.
"It was not until the list of the oil vouchers came out in January that it first even came to our attention," he said.
Michael Soussan was a manager for the oil-for-food program for three years before resigning in December 2000, citing the program's need to reform itself.
He said feuding and mistrust among the Security Council powers hampered the program from the start.
But he also faulted U.N. administrators for failing to condemn publicly a growing number of management and operational problems, from intimidation of U.N. staffers by the Iraqi government to the import of luxury goods that had no relation to Iraq's humanitarian crisis.
"We should have spoken out on a range of issues, but we did not," Mr. Soussan said.
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