Posted on 29-3-2004

Shams Scams Kofi Annan's
27.03.2004, By Roger Franklin, photo shows Kofi Annan

Almost a year ago, when kitchen workers at United Nations headquarters
walked off the job in a dispute over holiday pay, the cream of the world's
diplomats knew just what to do. They thronged to the site's five
unattended restaurants and stole everything that wasn't nailed down.

As one witness marvelled after seeing an envoy make off with a baked
turkey under one arm and a framed picture under the other, "They were
locusts!"

The next day, however, the incident hadn't happened - not officially,
anyway. A UN spokesmen swore blind that a senior official, concerned that
his colleagues might go hungry, had granted permission for staffers to
help themselves. There had been no mass theft, in other words, because
after the event, everything was declared free for the taking.

As excuses go, that one had the benefit of brazen originality. With a few
simple words, official honesty was once again the order of business inside
the glass-fronted monolith overlooking the East River.

If all episodes of pillage were as easy to explain, the UN might not today
be facing what is shaping up as the biggest scandal in its chequered
history.

This time it isn't cutlery, baked hams and wine-cellar locks that have
gone missing, but at least US$11 billion ($17 billion), depending on who
is doing the counting - or rather, the guessing, since the UN has been
curiously disinclined to investigate where all that money went.

Whatever the sum involved, it vanished from the UN-administered Iraq Oil
For Food programme, and unlike last year's petty looting, those at the
centre of suspicion aren't lowly bureaucrats but a tight cluster of
high-up insiders centred on the office, family and inner circle of
Secretary-General Kofi Annan himself.

To understand what happened - or better, what might have happened, because
the UN isn't releasing documents and balance sheets - you have to go back
to 1996, when the international body set up a system whereby Iraqi oil
could reach the market only if the proceeds went to the "humanitarian
relief" of the Iraqi people.

Two years later, at the end of 1998, the UN appointed a Swiss company
called Cotecna to administer the programme, which would supervise the flow
of some US$100 billion ($155 billion) in oil receipts, before it was
finally shut down last November, when the UN reluctantly surrendered the
job to the US-appointed Iraqi governing council in Baghdad.

What was Cotecna? For one thing, the former employer of Kofi Annan's son,
Kojo, who was on the payroll until shortly before the contracts were
awarded, when he became a contract consultant.

Cotecna's job involved squaring the income from oil sales against the
goods that were allegedly purchased.

If Saddam's Iraq wanted to import ambulances from Saudi Arabia, the
contract of sale had to be approved and the incoming goods inspected by
Cotecna, as did tens of thousands of other items, from Russian hoes to
Belarus welding rods.

In the first year alone, Cotecna pocketed $6 million ($9.3 million) for
its services. After that, because the UN isn't saying, its share of the
bounty is anybody's guess.

When Claudia Rosett of the Wall Street Journal began looking into the Oil
For Food programme, she soon came up with one explanation: Many of the
suppliers, like the Jordanian manufacturer of school desks listed on
contract records, simply did not exist.

As Rosett has noted, Cotecna was responsible for approving "tens of
billions worth of supplies inbound to a regime much interested in
smuggling, and evidently accustomed to dealing in bribes and kickbacks".
The issue, she explained in one of her painstakingly detailed
investigations, was never "whether the monitors were cheap, but whether
they were trustworthy".

Evidence of probity, however, is as hard to find as those notional school
desks from Amman - or the ultimate destination of the money spent on them.
The suspicion is that those deals, perhaps the overwhelming majority, were
nothing but scams and shams.

Remember how opponents of the Iraq War kept citing the hundreds of
thousands of Iraqi children perishing for want of medicines? Well, Oil For
Food was supposed to guarantee that those supplies arrived, but apparently
few did.

Again, the UN's stonewalling makes it hard to determine exactly how much
was fleeced, but there are some tantalising hints.

Before Oil For Food was handed over to Iraq, the UN conducted an urgent,
last-minute review of thousands of contracts. Rosett calls it a "house
cleaning", but whatever description is used, some 1500 supplier contracts
- one in four - were immediately suspended or banned outright from further
participation.

So where did the money go? Into Saddam's pocket is a good guess, with
lesser amounts creamed off by the operators of front companies, smugglers
and, perhaps, even UN officials.

According to the best estimate of the nonpartisan US Government Accounting
Office, Oil for Food generated at least $10 billion ($15.4 billion) for
Saddam's family and a further $1 billion ($1.54 billion) to pay the
1000-plus UN bureaucrats who were supposed to be keeping it honest.

Again, the focus is on Kofi Annan, who helped to set up Oil For Food in
1997 and installed his close friend and fellow diplomat Benon Sevan as its
director.

Last week, with Rosett's ongoing series of exposes igniting a firestorm
over the UN, Sevan wasn't answering his phone. According to a UN
spokesman, he is using up accumulated leave before his official
retirement.

For his part, a po-faced Annan now concedes "it is highly possible there
has been quite a lot of wrongdoing", and has authorised an internal
investigation.

Neither Rosett nor congressional investigators hold much hope that it will
be more than a whitewash - and the UN has other matters that it would much
prefer to talk about, starting with a $1.2 billion ($1.86 billion)
interest-free loan from Washington to renovate its decaying New York
headquarters