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Final Volcker Report on U.N. Oil-for-Food Scandal Ready for Release


October 27, 2005

Washington - The Volcker committee, which conducted an inquiry into the scandal surrounding the U.N. Oil-for-Food Program, will issue its final report Thursday, which will list all the companies named in Iraq files as involved in paying kickbacks to Saddam Hussein.

"The Iraqi's were very good at keeping meticulous records," said Paul Volcker, head of the investigating committee. Volcker, former chairman of the U.S. Federal Reserve, spoke October 26 at Johns Hopkins University's Paul H. Nitze School of Advanced International Studies.

Volcker said the panel was concerned with finding facts, not law enforcement, and "did not have to reach conclusions of guilt or innocence."

"Our focus was mainly how the program was manipulated and corrupted by Saddam Hussein and what went on within the United Nations," he explained.

The Oil-for-Food Program, which started in 1996 and ended in November 2003, when it was handed over to the Iraq Coalition Provisional Authority, was intended to allow Iraq to sell oil under U.N. supervision with the proceeds to be used primarily for humanitarian supplies for Iraqi civilians and reparations to victims of Iraq's invasion of Kuwait.

Volcker stressed that the inquiry was an international endeavor done at the behest of the U.N. Secretary-General Kofi Annan. The other committee members were South African Justice Richard Goldstone and Mark Pieth, a Swiss expert in money laundering. Their chief investigator was Reid Morden, former director of the Canadian Security Intelligence Service. Volcker said more than half of the committee's professional staff came from countries other than the United States.

The Security Council had passed a formal resolution calling for all U.N. member states to cooperate with the investigation and Volcker said the panel received "remarkable cooperation from some countries, mostly in Europe, and Iraq."

"Our most important sources were the United Nations and Iraq," he said, noting that the panel was able to "cut through all that [diplomatic] immunity" to examine U.N. documents and records. "Annan was completely open with providing us access to records. ... He always treated us with courtesy and this could not have been a pleasant process for him, especially as his son was involved [in the scandal]," Volcker said.

He said it is clear that there was inadequate oversight of the Oil-for-Food program and again called for reform of the administrative policies and practices of the United Nations. He cautioned, however, that the corruption found in this specific program "is not equivalent to finding corruption throughout the U.N."

Although there is a great deal of corruption in the world, Volcker said, the United Nations must be held to a higher standard if it is to command the respect it needs to function effectively. "It fell short of that standard," he said.

According to media accounts, the companies named in the report to be released October 27 include not only oil companies but also firms that supplied humanitarian goods and services. Volcker said, however, that he considers an earlier report, released in September, as the definitive findings of the investigation.

The September report, in five volumes totaling 1,035 pages, covered administration of the Oil-for-Food Program both in New York and Iraq, senior U.N. management, manipulation by Iraq, negotiations and establishment of the program, the Security Council, smuggling, the U.N. secretariat, performance of U.N.-related agencies and a special report on the impact of the program on the Iraqi people.

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