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The Buck Still Hasn't Stopped

From the October 3, 2005 issue: The Volcker report on Oil-for-Food is sadly incomplete.

Oct 3, 2005, Vol. 11, No. 03 • By CLAUDIA ROSETT
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These are the predictably thin results of a report that, despite such media descriptions as "blistering," arrives again and again at oddly limp conclusions regarding individual U.N. officials. No doubt by the standards of a United Nations unaccustomed to anyone poking through its files, peering at its books, or asking the secretary-general to explain his own organizational chart, Volcker's findings were a sharp rebuke. The preface criticizes not only Oil-for-Food, but the United Nations as a whole, quite rightly, for "managerial weaknesses," "ethical lapses," and "serious instances of illicit, unethical and corrupt behavior," along with a "grievous absence of effective auditing and management controls."

And yet, more than 800 pages later, as the volume wends to Volcker's final recommendation that the United Nations add another branch of bureaucracy by establishing "an office of ethics," the buck still hasn't stopped. Having enjoyed unlimited access to U.N. records and personnel, Volcker's committee shows a whole series of top officials, including both Secretary-General Kofi Annan and his predecessor, Boutros Boutros-Ghali, wandering oblivious through a gauntlet of Iraqi schemes to subvert and manipulate Oil-for-Food via everything from bags of cash to open demands for kickbacks.

Part of the problem is that Volcker has imposed on his inquiry the standards not of a prosecutor, but of an accountant. Faced with a pole too tall to measure by hand, he instead tells us its precise circumference on the ground, and lets it go at that. Much has been aired already of Volcker's account of Annan's strange and abiding ignorance of his own son's lively lobbying for U.N.-related business. So let us focus on another character, Annan's former special adviser Maurice Strong, longtime U.N. guru of good governance. (Strong did depart the United Nations this spring, but with Annan's office expressing fervent hopes he will soon return.)

At some length, Volcker does the genuine service of laying out how Strong, in mid-1997, received a check for $988,885 made out to his name (a copy can be found on page 106, Volume II). The check was drawn on a Jordanian bank, funded by Saddam's regime, and delivered by Korean businessman Tongsun Park, who was a U.N. "back-channel" go-between with Saddam. Strong endorsed the check over to a third party to invest in a Strong family-controlled business, Cordex Petroleum. Interviewed by Volcker's team earlier this year, Strong said he did not recall receiving such a check. When shown a copy, he said he did not know the money came from Iraq. Volcker leaves the matter there, concluding that "the Committee has found no evidence that Mr. Strong was involved in Iraqi affairs, matters relating to the [Oil-for-Food] Programme or took any actions at the request of Iraqi officials."

But how hard did the Volcker committee look? In July 1997, the month before Strong cashed the Saddam-backed check, Annan was issuing his first U.N. reform program, reshaping the secretariat. Strong was the major architect of that reform, and was thanked profusely by Annan at the time for "his important contributions." A significant aspect of that reform was the consolidation of the then-new, ad hoc, and diffuse Iraq Oil-for-Food program into a single, more firmly entrenched office. This move tilted control of the daily administration of Oil-for-Food away from the Security Council and toward the secretariat. When the new, unified office set up shop three months later, in October 1997, Annan appointed Sevan as executive director. That marked the beginning of the stretch in which Sevan began taking bribes from Saddam, and the Oil-for-Food program, urged on by Annan, began to grow astronomically in size and scope. Lacking any disclosure of the secret U.N. paper trail that led to the creation of this office and its expanded mission, it is impossible to know whether Strong took a direct hand in setting up the office from which Sevan then, in effect, collaborated with Saddam. Perhaps Strong had nothing to do with it. But Volcker doesn't even ask the question.

Only in the case of Sevan, already documented in the press before the Volcker inquiry got started in mid-2004, does Volcker assign blame to a specific individual. And even there, the Volcker committee fumbled, issuing an interim report last February, which, after eight months of preliminary investigation, merely rebuked Sevan for engaging in a "grave and continuing conflict of interest." Two weeks later, Sen. Norm Coleman's Permanent Subcommittee on Investigations accused Sevan outright of having taken bribes from Saddam. By the time Volcker finally worked around in his third interim report, August 8, to repeating the accusation, Sevan had made use of the intervening months to cash in his U.N. pension and leave New York. He is now widely believed to be back in his native Cyprus, which has no extradition treaty with the United States.