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The long, slow, sad, oil-for-food ridden death of the United Nations

By Jackson Murphy
web posted May 3, 2004

When you've lost Canada as major supporter have you not lost the whole world? The United Nations is having a pretty bad couple of months. But the bold statement of fact by Canadian Prime Minister Paul Martin that the institution itself needs serious reform is nothing compared to the growing evidence that the U.N. administered oil-for-food program was a boondoggle worthy of the names "Oil-for-Palaces" and UNSCAM.

In the handy scandal meter, this one takes the cake and as Glenn Reynolds notes, "dwarfs anything involving Enron or Martha Stewart." The only problem is that the scandal isn't as easy to understand as those media scandal favorites. It involves a favorite institution, the U.N., and it helps to build a case why eliminating Saddam Hussein from the Middle East was a necessity, weapons of mass destruction or not-both hard concepts for many to swallow.

The short version of the Oil-for-Food scandal is that the U.N. let Saddam Hussein draw up his own rules, contacts, and business deals. Then U.N. then did all it could to either cover up the transactions and accounts, or worse, allow Hussein to operate without any real supervision at all. The program, whose intentions were supposed to be humanitarian, ended up empowering Saddam Hussein with both money and influence while the U.N. was paid a handsome commission by Saddam to 'supervise'.

"In tallying various leaked lists, disturbing leads and appalling exposés to date, what becomes ever more clear is that Oil-for-Food quickly became a global maze of middlemen, shell companies, fronts and shadowy connections, all blessed by the U.N.," writes Claudia Rosett in The Wall Street Journal's Opinionjournal.com. "From this labyrinth, via kickbacks on underpriced oil and overpriced goods, Saddam extracted, by conservative estimates of the General Accounting Office, at least $4.4 billion in graft, plus an additional $5.7 billion on oil smuggled out of Iraq. Meanwhile, Mr. Annan's Secretariat shrugged and rang up its $1.4 billion in Iraqi oil commissions for supervising the program. Worse, the GAO notes that anywhere from $10 billion to as much as $40 billion may have been socked away in secret by Saddam's regime. The assumption so far has been that most of the illicit money flowed back to Saddam in the form of fancy goods and illicit arms."

U.N. Secretary-General Kofi Annan said on April 22 that Benon Sevan, the former head of the U.N.-run oil-for-food program, would cooperate with an investigation into charges of bribes and kickbacks from Saddam Hussein's government. The name of Sevan, an undersecretary-general, was discovered in a document that alleged he had received payment in the form of an oil allotment. Sevan has denied the charge. Sevan is shown in Baghdad on January 14, 2002
U.N. Secretary-General Kofi Annan said on April 22 that Benon Sevan, the former head of the U.N.-run oil-for-food program, would cooperate with an investigation into charges of bribes and kickbacks from Saddam Hussein's government. The name of Sevan, an undersecretary-general, was discovered in a document that alleged he had received payment in the form of an oil allotment. Sevan has denied the charge. Sevan is shown in Baghdad on January 14, 2002

With such a lucrative scheme at stake three members of the U.N. Security Council -- Russia, France, and China -- asked only that the program be expanded. So how did it work and why was it so lucrative to these nations?

Rosett, writing this time in Commentary magazine, says, "It worked like this. Saddam would sell at below-market prices to his hand-picked customers -- the Russians and the French were special favorites -- and they could then sell the oil to third parties at a fat profit. Part of this profit they would keep, part they would kick back to Saddam as a 'surcharge,' paid into bank accounts outside the UN program, in violation of UN sanctions."

There is a scene in one of the recent James Bond movies, "The World Is Not Enough," where Bond says, "If you can't trust a Swiss banker, then what's the world coming to?" The parallel here, for many people, would be if you can't trust the United Nations to run a simple humanitarian program with a ruthless dictator, then what's the world coming to?

This is why it has taken so long for the facts to come out about this scandal. Instinctively people trust the U.N. While it seems that the program did actually get some aid to the people of Iraq, the cost, and subsequent tarnish to the U.N.'s reputation, could not have been worth it.

The only reason we really know any of this, is that the regime of Saddam Hussein is no more. In fact if the U.N., France, Russia, and China had their way, Saddam would still be in power and the Oil-for-Food program would still be in operation today. That is the saddest and most scandalous parts of the whole story. Rather than once and for all getting rid of Saddam, to cut him out as the shady middleman between the oil and cash, the U.N. chose a path contrary to its own principles.

The irony is that the institution charged with, among other things, promoting "social progress and better standards of life in larger freedom" ended up being seduced by nothing more than a brutal tyrant with a pipeline of seemingly endless cash. No wonder none of them wanted to go to war.

It is no wonder that even Canada, long defender and champion of the U.N., is now advocating reform of existing global institutions and proposing some new outlets, such as a G20 Leaders Forum, to help deal with the world's problems. When you've lost Canada as a cheerleader, you know that the U.N., rightly, is in serious trouble.

Jackson Murphy is a commentator from Vancouver, Canada. He a senior writer at Enter Stage Right and the editor of "Dispatches" a website that serves up political commentary 24-7. You can contact him at jacksonmurphy@telus.net.

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