|Picture Credit: Public Broadcasting System
The Security Council adopted this programme in 1995 after widespread criticisms of the humanitarian crisis in Iraq under comprehensive economic sanctions. After delays, humanitarian supplies began to arrive in 1997. Though the programme lessened the crisis, it did not end it. Under its rules, the UN controlled all revenues from Iraq's oil sales and contracts within the programme were subject to oversight. The US and the UK often imposed political blockages on legitimate humanitarian contracts, claiming "dual-use" as military items. Procedures were slow, monies were withheld for war reparations, and Iraq's oil industry could not obtain either investments or adequate spare parts. Beginning in late 2001, the US-UK throttled Iraq's oil sales through abusive control over the contract price, drastically reducing funds available for the programme. The adoption of Resolution 1483 in May 2003 put an end to sanctions and foresaw the phasing out of the programme over 6 months and the gradual transfer of its administration to the US-UK authorities in Iraq.
The Volcker Committee's investigations into the UN Oil-for-Food Programme have not revealed endemic UN corruption, as many conservatives and UN-critics claim. Rather, the program's failures stem from Security Council member states – particularly the US and UK – and their hurried efforts to implement an ill-conceived program in the wake of economic sanctions and the first Gulf War. Furthermore, the bulk of illicit revenues came from smuggling, rather than kickbacks and bribes, involving Saddam Hussein's government, neighboring states, and private corporations, which the UN Secretariat was neither involved with nor responsible for monitoring. (AlterNet)
This important article debunks the "Oil-for-Food scandal," showing how right-wing political journalists in the United States manufactured it to discredit the UN. The author argues that the phony scandal helped Washington "change the subject" away from the Iraq War and the real scandals of the US occupation. (AlterNet)
Joy Gordon offers critically examines the allegations of corruption and profiteering linked to the UN Oil-for-Food programme. Gordon analyzes the "kickbacks" scheme orchestrated by the Saddam Hussein regime on Oil-for-Food contracts as well as the illegal smuggling of oil by Saddam Hussein that did not form part of the programme. Gordon also scrutinizes the role of the "661 Committee," and how governments turned a blind-eye to allegations of corruption throughout the seven years of the programme. (MERIP)
A comprehensive report on UN sanctions against Iraq, issued by Global Policy Forum and eleven NGO partners on the twelfth anniversary of the original sanction resolution in the Security Council. The report discusses sharp differences in the Council over the sanctions, issues in humanitarian law, and the battle for the future of Iraq's oil riches.
Articles & Analysis
Following the Volcker Committee's Investigation of the UN-administered Oil-for-Food Programme, former UN Under Secretary-General Brian Urquhart offers a comprehensive review of the UN Oil-for-Food "scandal." The bulk of illicit transactions during the sanctions regime occurred outside the Oil-for-Food Programme, while those within the program were mainly ignored by the Security Council members, namely the US and the UK, who designed and oversaw the program. As Urquhart points out, misinformed attacks on the UN from US neoconservatives and a complicit media serve to promote narrow nationalist interests while overshadowing legitimate discussions of UN reform and the genuine need for collective action. (New York Review of Books
Conservative writers, who delighted in reporting on the "epic failure" of the UN's Oil-for-Food Programme, have been less enthusiastic about the Volcker Committee's fifth and final report. Volcker's team follows a trail of kickbacks and corrupt money transfers that leads to thousands of companies' illegal business dealings with Saddam Hussein's government. The report shows the central corporate dimension of the "UN" scandal. (AlterNet)
The fifth and final report of the investigation into the UN Oil-for-Food Programme identifies 4,500 plus corporations that participated in shady business deals with Saddam Hussein's government. The bulk of illicit money was in the form of bribes and kickbacks paid to Saddam in securing corporate contracts. (Christian Science Monitor)
In this International Herald Tribune op-ed, former Oil-for-Food Programme Director Benon Sevan rejects the media misconception that the program was a "failure of epic proportions." He deflects attacks made on the UN Secretariat and the Office of the Iraq Program (OIP), affirming that the program was "highly successful" in its mission to address the humanitarian crisis caused by sanctions. He points out that oversight of the sanctions was not the responsibility of the OIP but that of the Security Council and its member states.
A report released by US Senate investigators found that the US "was not only aware of Iraqi oil sales which violated UN sanctions," but also occasionally "facilitated the illicit oil sales." Further, the report shows that "US oil purchases accounted for 52% of the kickbacks paid to Saddam Hussein's regime - more than the rest of the world put together." The Guardian notes that the report will likely ease pressure from conservative Republicans in Washington who want to see UN Secretary General Kofi Annan resign.
A US Senate investigation has concluded that high-ranking Russian officials and politicians "reaped millions of dollars in profits" from oil sales under Oil-for-Food programme sanctions. Former Iraqi leader Saddam Hussein focused his efforts to buy support among Security Council members on Russia: "More than 30 percent of Iraqi oil allocations ended up going to Russian officials, political parties and businessmen." US oil company Bayoil served as middleman in a number of transactions between Iraq and a prominent Russian politician, and "paid millions of dollars in illegal, under-the-table surcharges to the Hussein regime." (Washington Post)
A former senior British diplomat says "there was never any concerted attempt by the UK or US" to prevent smuggling of Iraqi oil under Oil-for-Food programme sanctions. He notes that "sanctions enforcement was bottom of the agenda" and took a back seat to other diplomatic considerations. The British diplomat's statements follow Kofi Annan's assertion that the US, UK, and other Security Council members ignored smuggling of Iraqi oil to neighboring Jordan and Turkey. (Telegraph)
UN Secretary General Kofi Annan's accusations that the US and UK overlooked Iraqi oil smuggling outside of the Oil-for-Food programme drew sharp denials from both governments. Annan pointed out that Saddam Hussein's regime profited greatly from illegally shipping oil to Turkey and Jordan, and said that the smuggling "was no secret" from the US and UK, the two main countries responsible for enforcing sanctions. (Guardian)
Though Paul Volcker's report on the Oil-for-Food Programme cleared UN Secretary General of any wrongdoing, the author of this piece observes that "not until hell freezes over" will the US right-wing media admit that "no evidence of wrongdoing" means "not guilty." Indeed, many of Annan's critics have preemptively called the Volcker Inquiry a "whitewash." But Volcker's next and final report "will be interesting" as it may point out that Oil-for-Food succeeded on many levels, and promises to report that both US Republican and Democratic administrations "were complicit in Iraqi oil trading with Turkey and Jordan." (Asia Times)
The US Treasury Department allowed two companies to export Iraqi oil to Jordan in violation of Oil-for-Food sanctions during the immediate period before the US-led invasion in 2003. A representative of one of the companies involved said the decision to bypass sanctions had the "full endorsement of both the executive and legislative branches of the United States." (Washington Post)
United Nations Deputy Secretary General Louise Frechette characterized the UN as unprepared for the task of providing humanitarian relief to 24 million Iraqis under the Oil-for-Food programme, and added that she hoped "we never get anything approaching that kind of responsibility [again]." Frechette also said that the UN had already addressed some of the organization's weaknesses exposed in Paul Volcker's interim report on corruption in Oil-for-Food. (Aljazeera)
The Independent Inquiry Committee (IIC) responsible for investigating the UN Oil-for-Food programme did not find a "smoking gun," but accused the UN of "failing to abide by the rules to assure fairness, transparency, and accountability." The committee also singled out former Oil-for-Food head Benan Savan as having "placed himself in a grave and continuing conflict of interest situation that violated explicit UN rules." Despite this, Chairman of the IIC Paul Volcker concluded that the UN administration of the program appeared "free of systematic or widespread abuse." (Inter Press Service)
"The reality is that the current calls for Annan's head are provoked by his opposition to America's pre-emptive war in Iraq," says The Nation's UN correspondent. The author also denounces the "creation" of the oil-for-food scandal as simply a way for US neoconservatives – who have been historically opposed to the United Nations – to push their own "reform" agenda to weaken "multilateral institutions and their role in the world."
In the run-up to the release of the Volcker investigation on corruption in the UN Oil-for-Food Programme, right-wing UN critics continue to exaggerate the scale of malpractice. Preliminary audit reports show that the world body failed to oversee the program properly and cannot account for approximately $2 million. But in an effort to damage the reputation of the UN "for political reasons," conservative US groups maintain illegal Oil-for-Food profits add up to $10 to 20 billion. (Inter Press Service
The Volcker investigation of corruption within the UN Oil-for-Food programme finds that Saddam Hussein accumulated most of his wealth by securing illegal trade deals, rather than diverting funds from the program to his private accounts. In an interview with US-funded Arab broadcaster Al Hurra, former Federal Reserve Chairman Paul Volcker announced there were "without question, problems in the oil-for-food area," but stressed that most of Saddam's riches were the result of smuggling, "much of which was known and taken note of by the Security Council, but not stopped." (New York Times)
This Washington Post opinion piece argues that the UN Oil-for-Food Programme achieved its main goal: to " allow the proceeds from Iraqi oil exports to be used to purchase food and medicine for the Iraqi people, but not weapons or WMD-related technology for the Hussein regime." Despite the UN's shortcomings in overseeing the program, Oil-for-Food "represents one of the most successful uses of international sanctions on record."
John G. Ruggie urges "UN bashers" to take charges of corruption within the UN's oil-for food programme seriously, but also to question the role of the US government and US firms in the unfolding scandal. As former Federal Reserve Chairman Paul Volcker leads an inquiry of UN mismanagement and corruption, Ruggie reminds readers that Congress turned a blind eye to illegal sales and pricing irregularities which favored US companies and served US national interest. (International Herald Tribune)
As US conservatives increasingly call for UN Secretary General Kofi Annan's resignation over charges of corruption within the Oil-for-Food programme, the New York Times rejects criticism aimed directly at Annan that damages the credibility of the world body. The UN bureaucracy does not hold primary blame for allowing Saddam Hussein to accumulate substantial profits. Rather, the blame lies with Security Council members who knew of illegal trade agreements outside the program between Iraq and Jordan, Syria, and Turkey. The Times argues that Council members did not take up responsibility for overseeing the sanctions they imposed on Iraq.
Neo-conservative hawks continue their attack on the UN, fueling their newest campaign on recent reports about the involvement of Secretary General Kofi Annan's son in the Oil-for-Food programme. The UN opponents, backed by conservative voices such as Fox News, the New York Times' William Safire and the editorial page of the Wall Street Journal, call for Annan's resignation. (Inter Press Service)
A statement to the US Senate revealed that a Scottish blue-chip engineering group paid kickbacks to Saddam Hussein as part of a deal to secure contracts with Saddam under the Oil-for-Food programme. Hundreds of companies paid similar bribes and left Saddam with several billion in illicit income. (The Herald)
In a letter to the UN Security Council, UN Secretary General Kofi Annan said that money for the investigation of corruption allegations in the Oil-for-Food Programme will come from revenue from the programme itself. The investigation will cost at least $30 million in the next year. (Wall Street Journal)
Allegations of corruption concerning the UN's Oil-for-Food Programme and of manipulation of sanctions imposed on Iraq do not serve as reasons to dismiss the value of the programme. UN Secretary General Kofi Annan has ordered an investigation into the emerging scandal but US Conservatives are already seizing the opportunity to point at the incompetence of the world body. (New York Times)
French officials are furious at the US's handling of the Duelfer report, which did not identify US companies as recipients of bribes and oil under the Oil-For-Food Programme but did accuse French companies of corruption. French and European officials say the report's charges have greatly damaged French-US relations and set diplomatic relations back a year. (Taipei Times)
US oil companies Chevron, Mobil, Texaco and Bay Oil as well as three individual oil investors obtained oil from Saddam Hussein under the Oil-for-Food Programme, the Chief Arms Inspector for the Central Intelligence Agency concludes in his report. The CIA had previously released an Iraq Survey Group report that omitted the names of the US companies and citizens who received vouchers to buy Iraqi oil. (New York Times)
Investigations into Iraq's Oil-for-Food Programme will include the CPA's mishandling of Iraqi funds, specifically $8.8 billion in oil revenues that the Bush administration cannot account for. The announcement comes after a House of Representatives subcommittee accused France, Russia and China of corrupting the program by failing to oversee the Iraqi government's financial activities adequately. (Mercury News)
The Head of the UN panel investigating corruption allegations stemming from the Iraqi Oil-for-Food programme claims that it will take a year to publish its findings and cost $30 million. Paul Volcker initially estimated that the inquiry would conclude by the end of 2004, at a cost of $4 million. (Status Report
of Independent Inquiry) (Radio Free Europe/Radio Liberty
In an e-mail sent to UN officials, former Executive Director of the Office of Iraq Programs Benon V. Sevan defended the Oil-for-Food programme, claiming that Security Council members "prevented him from effectively administering the multibillion-dollar-a-year program." Sevan contends that "member states were ignoring the widespread complaints about kickbacks and payoffs by Saddam Hussein's government so that their companies could continue being part of the lucrative program." (New York Times)
Members of Iraq's Governing Council insist that supervision of an inquiry into allegations of fraud and corruption of the Oil-for-Food programme remain the responsibility of the Council. However, US Administrator Paul Bremer stated that the Board of Supreme Audit, a group of Iraqi judges he appointed, will oversee the investigation. (New York Times)
London-based banker Claude Hankes-Drielsma, in charge of monitoring the Iraq Oil-for-Food program inquiry, accused CPA Chief Paul Bremer of hampering the investigation by refusing to pay the auditing firm conducting the probe. Investigators worry that the delay "is making it easier for those involved to destroy incriminating evidence." (Times)
French Ambassador to the US Jean-David Levitte responds to allegations that the government of France "condoned" kickbacks received by the Saddam Hussein regime from French companies in exchange for future contracts. Levitte asserts that William Safire's allegations attempt to discredit the French government. (Los Angeles Times)
The UN Security Council will approve an independent investigation into allegations of corruption stemming from the Iraq oil-for-food programme, despite objections by Russian diplomats. Russia is pressing for a resolution "noting" the Secretary General's intention to pursue the inquiry. (Reuters)
William Safire alleges that the France and Russia are delaying a UN Security Council approval of an independent investigation into the oil-for-food corruption allegations. Safire contends that the French and Russian governments condoned "kickbacks" to gain Iraqi contracts. (New York Times)
Secretary General Kofi Annan sent a letter to the UN Security Council detailing the scope of the investigation into corruption allegations against UN officials and outside firms administering the Oil-for-Food programme. The probe will determine whether UN personnel engaged in "any illicit or corrupt activities" and if UN program accounts were in order. (Reuters)
Allegations of corruption involving UN staff, including Executive Director of the UN Iraq Programme, Benon Sevan prompted Secretary General Kofi Annan to request the Security Council approve launching an independent investigation into alleged diversions of $10 billion from the Iraq Oil-for-Food programme by the Saddam Hussein government. (Globe and Mail)
Ahmad Chalabi, member of Iraq's Governing Council, alleges the Saddam Hussein regime diverted nearly $2 billion from the UN oil-for-food program to personal accounts. To date, no evidence has been presented offered to support the charges. (Reuters)
Documents recovered by Al-Mada allege that the Saddam Hussein regime allocated billions of barrels of Iraqi crude oil to as many as 270 individuals, companies, parties, groups, and organizations during the UN Oil-for-Food Programme. The list highlights the number of barrels of oil awarded to entities that do not own refineries (non-end users) or middle companies.
The UN Oil-for-Food Programme turned over an additional $2.6 billion to the Fund for Development for Iraq. This is the forth and largest transfer. The Coalition has been unable to account for some of the previous transfers. (Agence France Presse)
Oil Pricing Dispute
This excerpt from the report Iraq Sanctions: Humanitarian Implications and Options for the Future discusses the dispute over the Iraqi oil pricing mechanism, which leads to shortfalls in Iraqi oil exports and, consequently, a financial crisis for the humanitarian oil-for-food program. (Global Policy Forum)
This excerpt presents facts and problems related to the revenue from Iraqi oil exports. The UN Secretary General recommends that "concerned parties" solve the disagreement over the pricing of Iraqi oil to improve the critical funding situation for the Oil-for-Food program. (United Nations)
This excerpt focuses on falling Iraqi oil sales and its negative effects on the Oil-for-Food program's growing revenue shortfall. Benon Sevan identifies the system of retroactive pricing as one reason for this shortfall. (Office of the Iraq Programme)
NGOs express their concern with the humanitarian impact of Iraq sanctions. The letter draws special attention to the effects of the Security Council's oil export pricing mechanism, which results in reductions in Iraqi oil sales and a financial crisis of the Oil-for-Food program.
The US and UK argue that they need more evidence of the cessation of illegal surcharges and kickbacks for Iraqi oil before making changes to the current retroactive pricing policy. Russia previously blocked British and French attempts to change the pricing policy.(Reuters)
Major oil trading firms blame the UN sanctions committee for minimizing Iraqi oil sales, setting uncompetitive prices and increasing shortfalls in funds, resulting in serious consequences for the humanitarian situation in Iraq. (Mees)
This excerpt from the report Iraq Sanctions: Humanitarian Implications and Options for the Future
discusses the dispute over the Iraqi oil pricing mechanism, which leads to shortfalls in Iraqi oil exports and, consequently, a financial crisis for the humanitarian oil-for-food program. (Global Policy Forum
The United Kingdom proposes a proactive pricing system, which allows "Green List" companies access to advance notice of prices at the end of every month. The proposal also includes sharp limitations on companies that can trade in Iraqi oil. (CASI)
The UK proposes changes to the Iraqi oil pricing mechanism, which has created a revenue crisis for the UN humanitarian program in Iraq. By putting forward the proposal, the UK seems ready to consider alternatives to the prevailing policy, which has discouraged traders and oil companies from purchasing Iraqi oil. (Associated Press)
The UN oil-for-food program struggles with a shortfall of funds as Iraqi oil exports decline due to a conflict over the pricing mechanism of Iraqi oil. Radio Free Europe
looks at this dispute and how it restricts the delivery of humanitarian goods to Iraq. (Radio Free Europe
France calls for a "proactive pricing" system of Iraqi oil. According to the proposal, the UN Sanctions Committee should set oil prices at the start of the month for the first 15 days, then on day 15 decide whether to maintain those prices for the balance of the month. (CASI)
In this excerpt Benon Sevan expresses his concerns regarding the price setting of Iraqi crude oil. He argues that the continuing practice of retroactive pricing of Iraqi oil by the 661 Committee, in combination with excessive premia demanded by Iraqi crude oil contract-holders, lead to losses in revenue for the humanitarian program. (Office of the Iraq Programme
The UN Oil Overseers, established by the UN Sanctions Committee, discusses the Iraqi oil pricing mechanism and its consequences on Iraqi exports and revenues. It analyzes efforts to reduce premia through measures to set the price of Iraqi oil close to "fair market value" and to select customers on an integrity basis. (CASI)
In this excerpt Benon Sevan calls on the 661 Committee on Sanctions to turn attention to the humanitarian program's financial crisis and the problems of retroactive pricing. Included are also two annexes on allocation of total oil revenue, as well as oil proceeds and humanitarian supply letters. (Office of the Iraq Programme)