Let There Be Light . . .
. . . in the murkiest recesses of the United Nations.
BY BRET STEPHENS
Saturday, December 3, 2005 12:01 a.m. EST
NEW YORK--Paul Volcker is at ease. Sitting behind the desk of his Rockefeller Center corner office--which seems much too small for his 6-foot-8 frame--the former chairman of the Federal Reserve has the half-weary, half-satisfied look of a writer who's just inked the last sentence of an unexpectedly long and tangled tale. Which, in a sense, is what he is. Taken together, the five reports of his Independent Inquiry into the U.N.'s Oil for Food scandal--which took 18 months and $34 million to complete--run to some 2,000 pages.
And what a story they tell.
Thanks to the reports, we know that Oil for Food administrator Benon Sevan, French Senator Charles Pasqua, British MP George Galloway, Indian Foreign Minister K. Natwar Singh, Russian politician Vladimir Zhirinovsky and dozens of other notables likely took bribes from Saddam Hussein in the form of lucrative oil "allocations." We know that as many as 2,253 companies, including heavyweights such as Siemens and Volvo, are listed in Iraqi records as having paid kickbacks in order to do business in Iraq. We know that Secretary-General Kofi Annan and his deputy, Louise Frechette, were incompetent administrators (at best) who failed to disclose corrupt U.N. practices of which they were fully aware. We know that Saddam manipulated the program to enrich himself to the tune of $1.8 billion (at least) while steering some $100 billion to his preferred clients, who then did his bidding at the U.N. Security Council. And we know exactly how he did it: by applying surcharges billed as "inland transportation" fees; through the use of multiple middlemen; via loopholes in the handling of the Oil for Food escrow account; with scads of cash carried in the diplomatic pouch.
We know all this to be true and--what's equally important--so does the rest of the world, thanks mainly to Mr. Volcker's reputation for independence, probity and seriousness. So it only seems appropriate for me to ask him why so many people, particularly in the U.S. Congress, seem convinced that he's Kofi Annan's water boy.
"There's a certain amount of confusion--allegations--that somehow we changed our standard of proof," when it came to judging Mr. Annan, says Mr. Volcker in his thick New Yorkese. "We looked as hard as we could for evidence. We criticized him severely. . . . [The critics] don't understand all the procedures we went through, the thoroughness of the investigation. For all the pages of the report, they have only seen one little part of the investigation."
The severe criticism to which Mr. Volcker refers is an "adverse finding" contained in his second interim report released in March. The report found there was not "reasonably sufficient" evidence that Mr. Annan knew that the Swiss inspections company Cotecna, which employed his son Kojo and whose owner had met privately with Kofi Annan on at least two previous occasions, was bidding for a lucrative Oil for Food contract. Instead, it faulted Mr. Annan for launching an "inadequate" internal investigation into the process that improperly awarded Cotecna the contract. As a result, Mr. Annan claimed in a press conference to have been "cleared of any wrongdoing" by Mr. Volcker's committee.
Mr. Annan's self-exoneration plainly irritates Mr. Volcker. A related irritant has been his relations with Congress. Connecticut Republican Christopher Shays, who chairs one of three congressional committees investigating the U.N., described Mr. Volcker's findings on Mr. Annan as "oddly muted and almost purposefully vague." Reports have suggested that Mr. Volcker made last-minute changes in the language of his report following a meeting with Mr. Annan and his lawyer. To make matters worse, two of Mr. Volcker's investigators, Robert Parton and Miranda Duncan, resigned in protest of what they believed was a weak finding against the secretary-general. In April, Mr. Volcker had to obtain a restraining order from a U.S. district judge to prevent the investigators from testifying to Congress.
Mr. Volcker physically waves away the suggestion that Mr. Annan interfered in the investigation or altered the report's conclusions. As for the dispute with Congress, he makes the sensible point that sharing material with leak-prone congressional committees would not only have betrayed the assurances of confidentiality given to his sources but in some cases put their lives at risk. "Some Iraqis talked to us about things that went on in the previous regime . . . and sometimes they only talked outside Iraq itself. There was no doubt that some of these people felt their lives were in jeopardy, absolutely no doubt about it."
But Mr. Volcker is on shakier grounds in his reading of the evidence against Mr. Annan. One such piece of evidence is a luncheon Mr. Annan had in the summer of 1998 with his son Kojo and Kojo's business partner Pierre Mouselli. Mr. Mouselli claims to have briefed the elder Annan on their proposed ventures, including possible deals with Iraq, to which the secretary-general reportedly gave his "blessing." In interviews with Mr. Volcker's committee, the secretary-general initially denied ever meeting Mr. Mouselli, then recalled a "brief encounter" after his memory had been refreshed by the committee.
Mr. Parton and Ms. Duncan came to the conclusion that Mr. Annan was simply not being forthcoming with the committee. Mr. Volcker has a different interpretation. He treats Mr. Mouselli as an unreliable witness, going so far as to quote an Iraqi ambassador's characterization of him as "not quite stable." (I have interviewed Mr. Mouselli and found him to be a credible and consistent source.)
By contrast, Mr. Volcker seems oddly inclined to credit Mr. Annan's dog-ate-my-homework defense. "There are a lot of events, happenings, meetings where it would appear that [Mr. Annan] could have known about [Cotecna's bid for an Oil for Food contract] . . . and he denied that it came up in any of these meetings, and we did not find sufficient evidence to reach a conclusion that he knew," he says. "In the first interview where he did not recall one of those meetings we rather had the impression that he wasn't well prepared. He gave the impression he hadn't reviewed any of his records and he had no legal assistance at that point. When he came back later, [he realized] this is serious business."
Yet whatever the faults with Mr. Volcker's findings on Mr. Annan, the full report ultimately presented more than enough evidence from which the Bush administration could have hung the secretary-general out to dry, had it so wished. Instead, Secretary of State Condoleezza Rice gushes that "I've never had a better relationship with anyone than I've had with Kofi Annan." One can only hope she was being diplomatic.
It's also true that in the broad sweep of Mr. Volcker's report, the secretary-general's nonfeasance seems trivial next to the malfeasance of the organization he leads. There is no serious evidence that Mr. Annan profited personally from Oil for Food. By contrast, Mr. Volcker found en passant that a relatively low-ranking procurement officer named Alexander Yakovlev took nearly $1 million in bribes from $79 million in U.N. contracts. How much more of that might be going on? Nor is there any indication that Mr. Annan personally impeded the investigation. But Iqbal Riza, his chief of staff, ordered the shredding of thousands of documents potentially of relevance to the Oil for Food inquiry. Who else might have been silently obstructing the inquiry?
Reviewing this record, most people would probably describe the U.N. as pervasively corrupt. Mr. Volcker prefers to talk about "an environment of failure to take responsibility." "Why," he asks, "didn't the 661 Committee [the Security Council task force that monitored Iraqi sanctions] react more forcefully? Why didn't Kofi react? Why didn't Louise Frechette act? Why, during the quote-unquote [internal U.N.] investigation into this question about Cotecna's bid, why was there not a more forceful response by the lawyers, by the investigators? Why did Mr. Connors, an American put in there years ago to provide administrative discipline, why didn't he put his foot down?"
Mr. Volcker puts these questions rhetorically. Yet the very form in which they are asked reflects Mr. Volcker's proposed solutions to the problem. A U.N. that is corrupt is an organization the U.S. ought to shun, or at least penalize. A U.N. that suffers from a "culture of inaction," as Mr. Volcker called it in a congressional briefing, is merely one that requires reforms, some of which are suggested in one of Mr. Volcker's reports. "There's a lot to be done to strengthen their personnel practices, their conflict-of-interest rules, their financial rules and so forth," he says.
Above all, he recommends creating the position of Chief Operating Officer, someone "who's there to administer the place." Yet, as Mr. Volcker acknowledges, it isn't as if something similar has not been tried before. Ms. Frechette's position was created explicitly to relieve Mr. Annan of some of his day-to-day administrative duties. There's an undersecretary-general for management position, currently filled by former Bush administration official Christopher Burnham. There is a BOA, or Board of Auditors, and a JIU, or Joint Inspection Unit, and an OIOS, or Office of Internal Oversight Services, and an ACABQ, or Advisory Committee on Administrative and Budgetary Questions. None of these acronyms did anything to prevent the corruption of the Oil for Food program. In fact, the head of the ACABQ, Vladimir Kuznetsov, was arraigned in September on charges of money-laundering, suggesting that the reason so many U.N. officials fail to "take responsibility" is because they are actively seeking to undermine it.
Of course there's always room for hope, and as reform proposals go, Mr. Volcker's are certainly sensible. But as Mr. Annan himself noted, his real service lies in having shone a lantern into what had hitherto been the U.N.'s most unsightly corners. Critics may charge that the light did not illuminate everything. For most of us, it illuminated enough. "Tall Paul" Volcker has been a lighthouse in a storm.
Mr. Stephens is a member of The Wall Street Journal's editorial board.
http://www.opinionjournal.com/editorial ... =110007630