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"Hell, No"--He's Not Exonerated

From the April 11, 2005 issue: Kofi Annan and the Oil-for-Food investigation.

Apr 11, 2005, Vol. 10, No. 28 • By CLAUDIA ROSETT
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IN THE EPIC UNITED NATIONS Oil-for-Food scandal, we now have a moment of high farce, with what will surely be remembered as Kofi Annan's "Hell, no" press conference--named for the secretary general's belligerent answer on March 29 to a reporter who, quite appropriately, wondered if Annan shouldn't think about resigning sometime soon. The U.N.-authorized inquiry into Oil-for-Food wrongdoing, led by former Federal Reserve chairman Paul Volcker, clocked in last Tuesday with its second interim report on a program now infamous as the biggest fraud in the history of humanitarian aid. That same afternoon, Annan summoned the media to the blue-curtained U.N. briefing room to announce his great relief at "this exoneration."

What exoneration? Despite its scores of investigators, $30 million budget, and more than 10 months on the job, the Volcker inquiry has addressed only a few narrow issues. The focus of this second interim report was Annan's role in the U.N.'s hiring in 1998 of an Oil-for-Food contractor, Swiss-based Cotecna Inspection, S.A., which employed Kofi Annan's son, Kojo, as a consultant, while bidding on the lucrative U.N. contract to inspect Oil-for-Food imports in Saddam Hussein's Iraq. Cotecna, coincident with its U.N. labors, kept paying Kojo Annan from 1999 through early 2004, five years after he had quit. These are intriguing matters. But Volcker has yet to address the bulk of the Oil-for-Food program, and his final report is not expected till mid-summer. It was Annan himself who just last year was urging all and sundry to wait for Volcker's final word before reaching any conclusions.

Now, in his rush to exonerate himself, the secretary general seems to have forgotten that Oil-for-Food was a vast endeavor, running from 1996 to 2003, in which the United Nations, in the name of providing for the sanctions-squeezed people of Iraq, oversaw more than $110 billion worth of Saddam Hussein's oil sales and relief purchases, much of that riddled with billions in graft. All but the first month of this exercise was administered and--in the words of one of Annan's spokesman--"audited to death" by Annan's Secretariat. It was Annan who personally signed off on Saddam's shopping lists, and repeatedly urged the Security Council not only to continue the program, but to expand it in size and scope, which allowed Saddam to rake in yet more illicit billions from oil smuggling.

If Annan has indeed lost sight of his own oversight role, it would hardly be the only such lapse turned up in this inquiry. What emerges from the jumbled narrative of the Volcker interim report is a U.N. universe of forgetful officials, botched record-keeping, cronyism, and conflicts of interest so abundant they start to sound simply routine--which they apparently were. Most noteworthy is the volume of damning information whitewashed by bland wording, culminating in Volcker's judgment that in some respects Annan's performance was "inadequate." By such standards, the Titanic was "non-buoyant."

As with the earlier interim report, issued in February, Volcker informs us that his team has found no smoking gun. But there's enough smoke here to leave you wondering if Volcker's team should have been looking not for a gun but, instead, for a roomful of U.N. shredders, flaming out from overuse.

As it happens, the Oil-for-Food scandal does indeed feature a shredder. Among the findings of this Volcker installment is that in April 2004, just as the inquiry was pulling itself together and after Annan had promised that all documentation would be preserved, Annan's former chief of staff, Iqbal Riza, approved a request from his secretary to shred some files covering precisely the period under investigation in this interim report, from 1997 to 1999. The reason given was to clear space. As described in the report, the shredding went on for more than seven months, ending in December--a process we are told Riza somehow failed to notice.

Then there's Volcker's finding, after poking through the available shreds and cinders, that there is "no evidence" Kofi Annan interfered improperly in the U.N.'s awarding of the Iraq contract to Cotecna. But there is plenty of evidence that Kofi Annan--contrary to his public pose of bewildered ignorance--had plenty of reasons to ponder possible connections among Cotecna, his son, and U.N. business.