What the very existence of the Second Interim Report of the Volcker Committee’s Inquiry into the United Nations Oil-for-Food Program, with its obsessive focus on the conduct of two men, the UN Secretary-General and his son, and their roles in the 1998 selection and subsequent extensions of the UN contract with the Swiss firm Cotecna, shows us, I think, is that the right-wing of the American political establishment is so influential, not only within the States, but internationally as well, its obsessions become the world’s de facto obsessions—and that at the end of the day, even as multilateral a body as the United Nations has no choice but to answer to it.
It is not that improper or illicit influence within the administration of the estimated $65 billion Oil-for-Food Program (April, 1995-November, 2003) isn’t an important matter. Or that conflicts of interest (or, to be polite: the appearance of conflicts of interest) in its administration are not a serious affair. Or that lies and deception are irrelevant. Particularly since so much was once at stake—the provision of humanitarian relief to the more than 20 million Iraqis who suffered the assorted malevolence and indifference of the “international community” all those years, dating as far back as Security Council Res. 661 of August 6, 1990.
(Quick aside. According to work done by Richard Garfield in the late 1990s (note that Garfield was one of the contributors to The Lancet‘s study of Iraqi mortality rates under the American war and occupation): “The figure of 106,106 excess deaths [among Iraqi children under five years old] from 1990 through the first quarter of 1998 [was] intended to be a best conservative estimate of excess mortality….Excess deaths are not the only important impact on health and welfare of the population. Prior to 1990 death came to about one in every twenty Iraqis under age five. During the 1990s about one additional Iraqi out of twenty born died before reaching age five. Even a small number of documentable excess deaths is an expression of a humanitarian disaster, and this number is not small. But damages also are likely to occur among many of the other eighteen out of twenty Iraqis who do not die prior to age five. Many of these damages may be serious or irreparable. In Iraq these likely include reduced mental capacity due to malnutrition, reduced educational achievement because of school dropouts, social deterioration from family breakdown and poverty growth, and reduced governability through increases in crime and lawlessness. Excess mortality is important as a severe denial of all rights to affected individuals and because it is a measurable state. It may well be that these other impacts, less clearly countable or attributable to sanctions, may be more important for quality of life among Iraqis overall. Excess deaths should thus be seen as the tip of the iceberg among damages to occur among under five-year-olds in Iraq in the 1990s.” (“Morbidity and Mortality Among Iraqi Children from 1990 Through 1998: Assessing the Impact of the Gulf War and Economic Sanctions,” 1999.—I am quite aware that much higher estimates also are in circulation. For one frequently cited—I mean within the dissident literature—document, see “Iraq Survey Shows ‘Humanitarian Emergency’,” UNICEF, Aug. 12, 1999.))
On the contrary. It is that when looking over the $65 billion Oil-for-Food Program in its totality, the fact that the Volcker Committee “faulted the Secretary-General for failing to launch an adequate internal probe into the conflict of interest caused by his son Kojo’s work with a U.N. contractor in Geneva or into the bribery allegations then pending against firm,” as today’s Wall Street Journal reports the matter, is trivial in the extreme. As is the Volcker Committee’s criticism of the son’s “honesty and business ethics,” again hewing to the Journal‘s account. And its findings that the son received anywhere from $178,187 to $484,492—the Volcker Committee flatly admitting that it doesn’t know for sure. (See p. 70 of the Second Interim Report.) “The report concluded that Cotecna won the initial contract on its own merits and not because of favoritism from its employment of Kojo Annan,” the Journal adds. Revealingly, at the very bottom of this report, the Journal provides a link to its online edition, where readers are asked to weigh-in on a poll question: “In light of the oil-for-food probe, should Kofi Annan resign from the UN?” It is in moments such as these that the real meaning of the “scandal” for the American political culture snaps into focus, I think. (“Kofi Annan Calls Volcker Report An ‘Exoneration’,” Yochi J. Dreazen, March 30.—Notice that unlike last Friday’s highly critical report, “Panel to Criticize Annan for Lapses,” which the Journal ran on its front page, the Journal began today’s anything-but-damning report in relative obscurity, on page A3.)
As best I can tell, the first whiff of what was to become the current “scandal” began to be emitted from the Op-Ed page of the Wall Street Journal some two-and-a-half years ago, back in late September, 2002, under the byline of the veteran right-winger, Claudia Rosett. (Who now bears the curious title Journalist-in-Residence at the Foundation for the Defense of Democracies. And who also is a favorite of the New York Sun and Fox News Network.)
Rosett’s opening paragraphs that morning show us exactly what was afoot at the time (“The Oil-for-UN- Jobs Program,” Sept. 26, 2002):
Who is Saddam Hussein’s biggest business partner?
The United Nations. The same U.N. whose secretary-general, Kofi Annan, stands as one of the chief ditherers over removing Saddam. Here are the ingredients of a conflict of interest.
Four sentences like these were all that it took. Everyone will recall that in September, 2002, flushed with its newly-proclaimed doctrine of “pre-emptive” war (i.e., the unique American right of aggression, plain and simple), the Bush regime prepared to militarily seize Iraq. The Secretary-General therefore stood accused not only of blocking the Bush regime’s plans, but of doing so out of his own self-interests, using the Oil-for-Food Program for everything from enhancing his own power and that of the dithering United Nations, to banking a windfall in kickbacks and bribes along the way.
From there on, Rosett’s byline was like a brush for applying the tar to the Secretary-General and his dithering United Nations.
“On Feb. 7 , with war all but inevitable, Mr. Annan approved a request by the [Iraqi] regime for TV broadcasting equipment from Russia,” Rosett wrote in the New York Times. “Was this material intended to shore up the propaganda machine Saddam Hussein had built in recent years? After all, the United Nations in 2000 and 2001 approved more than a dozen contracts with Jordan and France for Iraq to import equipment for ‘educational TV’.” (“Oil, Food and a Whole Lot of Questions,” April 18, 2003.) It was this commentary that, according to the professionally disingenuous Times columnist William Safire, first alerted him to the “cover-up in the office of the U.N. secretary-general of a multibillion-dollar financial fraud known as the Iraqi oil-for-food program.” But, “Will the Security Council appoint an independent counsel to clean house in an inept or corrupt Secretariat?” Safire asked. “No, because France and Russia had their hands in the kickback till.” (“Scandal At The U.N.,” New York Times, March 17, 2004.) Politically-charged phrases in the States such as “Kofigate” (i.e., sort of the political equivalent of saying Soandso suffers from a social disease) also were placed into circulation. As early as April, 2004, Claudia Rosett & Co. began providing testimony to “investigations” into the Oil-for-Food allegations sponsored by the lunatic American Congress. And the god-fearing Wall Street Journal, Washington Times, New York Sun, Weekly Standard, National Review, Fox News Network, CNBC, and thereafter the larger American (and by now global) media have kept these allegations bouncing around the public realm. That the No. One subject of inquiry for any serious and bona fide investigation into the administration of the Oil-for-Food Program ought to have been the role played by the American and British enforcers via the Security Council of the UN 661-type sanctions is completely lost on the clowns who dominate the American Congress and the mainstream media that have been reporting every allegation, innuendo, and outright smear of the UN Secretariat. But the obsessive focus on the Secretariat—reaching its extreme in the Second Interim Report‘s focus on the Secretary-General and his son as a way of placating the American right-wing, and the charade that these two individuals and their associates were the linchpins of the whole process—does serve to keep the focus off of the American and British governments. Indeed. I wouldn’t be surprised to learn—though showing it conclusively would be another matter—that this particular “scandal” at the UN, and how it has played out within the establishment media in the States over the past 30 months, both in terms of the rising and falling degrees of attention that it has received, and how the allegations have been framed (i.e., corruption in precisely those organs of the United Nations that have dithered and stood in the way of the Americans), correlates pretty neatly with the ups and downs the Americans have suffered on other fronts—beginning with their plans to criminally seize Iraq, their failure to threaten their way to Security Council approval, the torture-as-state-policy revelations of 2004, wetting their pants over the “weapons of mass destruction” lies, the Secretary-General’s timid charge over the BBC that the American and British invasion of Iraq was “not in conformity with the UN Charter” as well as “illegal,” and so on. And leading up to the release of the Secretary-General’s In Larger Freedom document, most of which the American political leadership abhors. Even if the general public in the States, and, indeed, around the rest of the world, leans heavily in the direction of a stronger United Nations, and a weaker United States.
Of course, there have been monumental scandals related to the Oil-for-Food Program over the years—the most scandalous of them all having been the nearly 15-consecutive-years that the American and British rogues have enjoyed at using the United Nations to execute their policies toward the former Iraqi regime, its captive population, and the greater Middle East.
But as I look over yesterday’s and today’s flood of news accounts about the benign findings of the Volcker Committee’s Second Interim Report into a trivial sideshow on the edges of the real and humanly catastrophic scandals related to Iraq and its peoples in the contemporary period, I am reminded of the sound and fury with which these same news circles showered us over the course of the past week—for example, the story in Monday’s Independent about the meltdown alleged to be imminent at the UN—and I know exactly what it all signifies.
My only worry is what other twists and turns the crackpots in the States still have in store for us.
Independent Inquiry Committee into United Nations Oil-for-Food Program (Homepage)
Second Interim Report: The 1998 Procurement of the Humanitarian Goods Inspection Contract, Paul A. Volcker et al., Independent Inquiry Committee, March 29, 2005
“Press Conference by the Secretary-General,” March 29, 2005
“Annan says exoneration by Iraq Oil-for-Food probe ‘great relief’,” UN News Center, March 29, 2005
“Cotecna link to Kojo Annan under scrutiny,” Claudio Gatti, Financial Times, March 23, 2005
“Annan son received Dollars 300,000 in Cotecna payments,” Claudio Gatti, Financial Times, March 23, 2005
“Panel To Criticize Annan for Lapses in UN’s Oil-for-Food Program,” Yochi J. Dreazen, Wall Street Journal, March 25, 2005
“Report Expected to Fault Kofi Annan’s Role in Oil-for-Food Plan Payments to His Son,” Warren Hoge and Judith Miller, New York Times, March 26, 2005
“Annan faces new calls for resignation over his son’s role in UN oil-for-food scandal,” Philip Sherwell, Sunday Telegraph, March 27, 2005
“Annan Fate To Be Sealed by Oil-for-Food Scandal Report,” David Usborne, The Independent, March 28, 2005
“Report Clears UN Chief of Corruption Allegations,” Farah Stockman and Joe Lauria, Boston Globe, March 30, 2005
“No conflict by Annan, panel finds,” Stevenson Swanson, Chicago Tribune, March 30, 2005
“UN chief got his son a job in oil-for-food scandal firm,” Francis Harris, Daily Telegraph, March 30, 2005
“Investigators trace ‘shady network’ of Annan’s son,” Francis Harris, Daily Telegraph, March 30, 2005
“Annan cleared in oil-for-food scandal,” Mark Turner, Financial Times, March 30, 2005
“Report leaves questions unanswered, say critics,” Mark Turner, Financial Times, March 30, 2005
“Sobering lessons for the United Nations,” Jan Egeland, Financial Times, March 30, 2005 [see below]
“Annan cleared in oil-for-food inquiry,” Ewen MacAskill, The Guardian, March 30, 2005
“Annan Defiant Over His Son’s Links to Oil-for-Food Scheme,” David Usborne, The Independent, March 30, 2005
“The World Should Not Be Swayed by the Campaign of Vilification against the UN,” Editorial, The Independent, March 30, 2005 [$$$$$$---see below]
“Report critical but clears UN chief in scandal,” Conor O’Clery, Irish Times, March 30, 2005 [see below]
“Annan Given Mixed Review,” Maggie Farley, Los Angeles Times, March 30, 2005
“U.N. Elections Chief Accused of Harassing Staff, Misusing Funds,” Maggie Farley, Los Angeles Times, March 30, 2005
“Panel Says Annan Didn’t Intervene in Iraq Contract,” Warren Hoge, New York Times, March 30, 2005
“Review Finds Abuses by Management at the U.N.’s Election-Monitoring Office,” Judith Miller, New York Times, March 30, 2005
“The Verdict on Kofi Annan,” Editorial, New York Times, March 30, 2005 [see below]
“‘Hell, no,’ I won’t go: UN chief,” Steven Edwards, Ottawa Citizen, March 30, 2005
“Annan bruised by oil-for-food probe,” Stephen Handelman, Toronto Star, March 30, 2005
“Let Kofi Annan stay on,” Editorial, Toronto Star, March 30, 2005 [see below]
“Kofi Annan Calls Volcker Report An ‘Exoneration’,” Yochi J. Dreazen, Wall Street Journal, March 30, 2005
“Kofi’s Accountability,” Editorial, Wall Street Journal, March 30, 2005 [$$$$$$---see below]
“Kofi Annan Cleared In Corruption Probe,” Colum Lynch, Washington Post, March 30, 2005
“Morbidity and Mortality Among Iraqi Children from 1990 Through 1998: Assessing the Impact of the Gulf War and Economic Sanctions,” Richard Garfield, 1999. (This copy of the document is made available by the Cambridge Solidarity with Iraq (CASI) website. Formerly known as the Campaign Against Sanctions on Iraq group, this website also contains links to many other important documents.)
“Mortality before and after the 2003 invasion of Iraq: cluster sample survey,” Les Roberts et al., The Lancet, posted online October 29, 2004. (This copy of the document is made available by the U.K.-based Count the Casualties organization.)
“Iraqi Civilian Deaths Increase Dramatically After Invasion,” Press Release, Center for International Emergency, Disaster, and Refugee Studies, October 28, 2004
An Agenda for Peace: Preventive Diplomacy, Peacemaking and Peace-Keeping (A/47/277-S/24111), Report of the Secretary-General, Boutros Boutros-Ghali et al., June, 1992
An Agenda for Development (A/48/935), Report of the Secretary-General, Boutros Boutros-Ghali et al., May, 1994
Supplement to An Agenda for Peace, (A/50/60 – S/1995/1), Report of the Secretary-General, Boutros Boutros-Ghali et al., January, 1995
(Please note that all three of these documents are electronically archived by the United Nations Association of Great Britain and Northern Ireland.)
The Responsibility To Protect, Report of the International Commission on Intervention and State Sovereignty, Gareth Evans and Mohamed Sahnoun et al., September, 2001 (For the HTML version of the same.)
United Nations Millennium Declaration (A/55/L.2), UN General Assembly, September 8, 2000
“We the Peoples”: The Role of the United Nations in the 21st Century, Kofi A. Annan et al., United Nation, 2000
UN Millennium Development Goals (Overview with links)
UN Millennium Project (Homepage)
A More Secure World: Our Shared Responsibility, Report of the Secretary-General’s High-level Panel on Threats, Challenges and Change, Anand Panyarachun et al., 2004 (For the complete PDF version of the same.)
Investing in Development: A Practical Plan To Achieve the Millennium Development Goals, Jeffrey D. Sachs et al., 2005 (For the complete PDF version of the same.—Also see the accompanying Media Release.)
In Larger Freedom: Towards Security, Development and Human Rights for All, Report of the Secretary-General of the United Nations for decisions by Heads of State and Government in September 2005 (A/59/2005), Kofi A. Annan et al., United Nations, 2005 (For the PDF version of the report.)
“In Larger Freedom” I, March 20, 2005
“In Larger Freedom” II, March 21, 2005
“In Larger Freedom” III, March 21, 2005
“In Larger Freedom” IV, March 22, 2005
“In Larger Freedom” V, March 25, 2005
“In Larger Freedom” VI, March 26, 2005
“In Larger Freedom” VII, March 28, 2005
FYA (“For your archives”):
Financial Times (London, England)
March 30, 2005 Wednesday
London Edition 1
SECTION: COMMENT; Pg. 17
HEADLINE: Sobering lessons for the United Nations: JAN EGELAND:
BYLINE: By JAN EGELAND
Atatime when international co-operation often seems more myth than measure, the world’s response to the tsunami disaster – and the challenge of dealing with fresh crises in an already stricken region, such as Monday’s earthquake in Indonesia – have reminded us of our shared vulnerability. What lessons can we learn from such disasters in order to respond more effectively to new emergencies? And significantly, what have we at the United Nations learnt from the tsunami disaster to help us reform this indispensable, if not flawless, institution?
First, the tsunami disaster showed with stunning clarity that when there is a will – a political will – there is a way. Galvanised into action by the sudden immensity of suffering, decision-makers rushed forward to make their pledges known. Never in my 25 years of working in humanitarian emergencies have I seen governments react with such unbridled generosity to contribute money, military assets and manpower. This unprecedented generosity stands in striking contrast to other crises such as in Sudan, or the Democratic Republic of Congo where 1,000 people die every day from preventable causes – a tsunami death toll every six months for six consecutive years since the war there began.
Second, the tsunami showed that only the UN has the universal legitimacy, capacity and credibility to lead in a truly global humanitarian emergency. Days after initiating tsunami relief efforts, regional groups and other core group nations handed over the reins to the UN, in recognition that it alone could co-ordinate some 60 donor countries, military assets from 26 countries and hundreds of international, national and local humanitarian partners. But this is no time for laurels. Yesterday’s release of the interim Volcker committee report on the Oil for Food Programme, combined with allegations of sexual exploitation by UN peacekeepers, are just more arguments for change in the vigorous debate about the UN’s future.
As we approach the 60th anniversary of the UN’s founding, we must summon the courage to listen carefully to our critics and learn from not only our well-publicised failings but also our less-heralded successes. Some of the criticisms are justified, some are not. As Kofi Annan, UN secretary-general, has affirmed, we must fundamentally ramp up our performance, upgrade and modernise our management culture and become the transparent, accountable and effective 21st century institution the world expects the UN to be. The UN and the humanitarian community now stand at a crossroads. To go forward, we might look at the UN’s response to the tsunami disaster for guidance. Three points stand out. Call them the “ABCs” of UN performance: accountability, boldness of action, and credibility. Together they provide a road map for a 21st century UN. Accountability comes first. The UN is accountable to the populations it serves worldwide. As important, we are accountable to our donors, our partners, and the public – all of whom have an indisputable right to know how their money is being used. Since 2000, my office at the UN* has run a publicly accessible financial tracking website. Few public or private entities have this degree of transparency.
In terms of boldness, the world wants the UN to do more than talk; it wants it to act – swiftly, boldly and decisively – in times of crisis to mobilise political will and harness resources from around the world. Within an hour of Monday’s massive earthquake, for example, my office pulled together key humanitarian partners and mobilised assessment teams. That said, in a crisis we should draw on the expertise of others outside the UN system. We certainly do not have all the answers – or the assets. The private as well as public sector proved a key partner in the tsunami relief efforts. We should draw on its assistance and expertise more systematically in future.
Credibility, meanwhile, has to be earned, and the UN is no exception. We are credible to the degree that we now have an even greater awareness of the need to prevent acts of mismanagement or abuse by our own managers or staff.
In the end, there is no alternative to this institution. We must mend, not end, the UN – not out of starry-eyed idealism but from hard-headed realism. In an age when both threats and security transcend borders, it is in our self-interest to see the UN work: to be accountable, bold and credible in meeting today’s needs and securing tomorrow’s trust.
The writer is United Nations under-secretary general for humanitarian affairs and is its emergency relief co-ordinator.
The Independent (London)
March 30, 2005, Wednesday
SECTION: First Edition; COMMENT; Pg. 30
HEADLINE: LEADING ARTICLE: THE WORLD SHOULD NOT BE SWAYED BY THIS CAMPAIGN OF VILIFICATION AGAINST THE UN
THE UNITED Nations must treat the conclusions of Paul Volcker’s interim report on the Iraqi oil-for-food programme with the utmost seriousness. The report, by the former chairman of the US Federal Reserve, makes it clear that the conduct of Kofi Annan fell below that expected of someone in his position. The UN secretary general should have been more alive to the potential dangers of awarding a UN oil-for-food contract to Cotecna, a firm that employed his son. And as the report points out, Mr Annan should have made greater efforts to determine the nature of his son’s relationship with Cotecna. It is difficult to find fault with the conclusion that, by failing to do so, Mr Annan created a perception of a conflict of interest.
But it is important to maintain a sense of perspective. The secretary general’s sin was one of omission, rather than commission. And the report makes it clear that this does not constitute sufficient grounds for his resignation. Furthermore, the real issue is not the behaviour of the secretary general, but the oil-for-food programme itself. Here, the conclusions to be drawn are far less clear cut – and much less convenient for those who will use yesterday’s report to renew their calls for Mr Annan’s resignation.
The final Volcker report will not be released until the summer, but it is already clear the oil-for-food programme was a deeply flawed mechanism. Allowing Saddam Hussein to choose the middlemen to whom his regime would sell oil was a big mistake. It enabled him to get round the sanctions, imposed since the first Gulf War, by demanding kickbacks in exchange for lucrative contracts. Yet it is important to remember the programme’s primary purpose was to prevent the Iraq regime buying arms and materials with which it could threaten its neighbours. As the failure of US weapons inspectors to discover any weapons of mass destruction in Iraq has shown, it was wholly effective in this respect.
It is also worth bearing in mind some stubborn realities about the international trade in oil. The rising price of crude oil since the programme was instituted in 1996 meant that any seller would inevitably be in a position of strength – even one as restricted as Saddam Hussein. And if the programme had not been in place, it is likely that even more barrels would have been smuggled over Iraq’s borders.
None of this is to condone the mismanagement of the oil-for-food programme. But it does emphasise the difficulties of policing such a complex sanctions- related mechanism. And the US is arguably just as much to blame as any other nation for the flaws of the scheme. The programme was administered by the United Nations Security Council – on which the US is a permanent member. All the contracts had to be approved by the council’s sanctions committee.
This is relevant because the US is by far the most vigorous critic of the UN. And it is American politicians who have made the most strident accusations of corruption. Ever since the UN Security Council refused to back the invasion of Iraq, the Bush administration has seized on every opportunity to discredit the organisation and smear its leader.
It is instructive to trace the course of the way the oil-for-food scandal has emerged. Information was carefully leaked to the US press, that blurred the substantial involvement of US companies and individuals in playing the system. The abuses that emerged, at first, involved mainly companies from France and Russia – two nations that took the lead in opposing the US invasion of Iraq in the Security Council.
The rest of the world must not be swayed by this campaign of vilification. When prominent Republicans called for Mr Annan’s resignation last December, the UN ambassadors of 191 countries publicly backed the secretary general. This support is needed more than ever now. John Bolton – who believes “the UN is valuable only when it directly serves the United States” – is soon likely to be approved as the new American ambassador to the organisation. This is no time to concede ground to the world’s last remaining superpower in its long struggle to undermine this flawed, but still vitally important, multilateral platform.
The Irish Times
March 30, 2005
SECTION: World; Other World Stories; Pg. 10
HEADLINE: Report critical but clears UN chief in scandal
BYLINE: Conor O’Clery, North America Editor, in New York
US: Investigators of the United Nations oil-for-food programme in Iraq said yesterday there was not enough evidence to show secretary general Kofi Annan knew of a suspicious contract bid by his son’s Swiss employer, and cleared him of any wrongdoing.
However, in a report, they strongly criticise Mr Annan’s son Kojo for “intentionally deceiving” his father over his role in the company, known as Cotecna Inspection, and his attempt to hide from the inquiry secret payments from Cotecna amounting to some $400,000.
The report also accuses Cotecna and its top officials of making false statements to the public, the UN and the investigation.
It criticises former UN secretary general Joseph Connor for failing to properly investigate the fitness of Cotecna to do business with the UN, and the secretary general’s former chef de cabinet, S. Iqbal Riza, for shredding documents that could have been pertinent to the inquiry.
Cotecna was the family-owned Swiss firm hired by the UN in 1998 to conduct inspections of humanitarian goods entering Iraq under the oil-for-food programme.
At the time the firm was embroiled in a criminal investigation involving allegations of money laundering and illegal payments to former Pakistani prime minister Benazir Bhutto.
The 93-page report is the second interim report of an inquiry headed by Paul Volcker, former head of the US federal reserve. It set out to address three questions:
was the selection of Cotecna by the UN properly conducted?
did the conduct of the secretary general involve a conflict of interest? and
were the actions of other persons free from impropriety?
It finds “no evidence that the selection of Cotecna was subject to any affirmative or improper influence of the secretary general in the bidding or selection process”.
The contract went to Cotecna because it was the lowest bidder when it came to calculating man-hours for its inspectors in Iraq. However, UN procurement rules were not followed in the failure by the UN to get Cotecna to submit a financial statement, and “no account was taken of a Swiss criminal investigation against the chief executive officer of Cotecna, Robert Massey”.
The inquiry finds “no satisfactory explanation” for this. Mr Anan’s son Kojo was an employee of Cotecna when it was bidding for the UN contract in 1998. The report notes there was not “reasonably sufficient” evidence to show whether the secretary general knew that Cotecna was bidding for the contract in 1988 while his son worked there.
But when the Sunday Telegraph raised the question of conflict of interest in an article in 1999, the inquiry initiated by Mr Annan was “inadequate”. He asked his chef de cabinet, Mr Riza, to look into the matter. Mr Riza in turn asked Mr Connor to make a report. Mr Connor responded the same day that the Cotecna bid had been competitive and that those handling it at the UN did not know of Kojo’s relationship with the Swiss company.
The Volcker inquiry turned up two versions of the Connor memo, one unsigned. The unsigned version stated, incorrectly, that Kojo had resigned from Cotecna on October 9th, 1998.
The inquiry could not establish who drafted the memos, and concludes that if the secretary general had properly referred the matter for investigation, it was unlikely that the contract would have been allowed to continue.
After the contract was awarded, Kojo Annan said he resigned from Cotecna to avoid conflict of interest.
However, he then actively participated in efforts by Cotecna to hide his continuing relationship. He also “intentionally deceived” his father about his continuing financial relationship with the firm. He was not forthcoming to the inquiry about the money channelled to him through companies controlled by the Massey family, which owned Cotecna, between 1999 and 2004.
Kojo received $31,887 through a company called Meteor, $8,925 through Confinter, $121,940 through Westemix, and a possible further $306,305 through unnamed sources. Mr Massey testified that Kojo got $2,500 a month for two years to keep him from working for a rival company.
The Volcker inquiry finds “most problematic” Kojo’s inability to explain why he got these payments. Cotecna also continued to pay corporate credit card payments for Kojo, many for international flights.
Kojo refused to attend a second interview with the Volcker inquiry, which concludes that “significant questions remain” about “the integrity of his business and financial dealings” with respect to the oil-for-food programme.
Cotecna provided documentation to the UN but falsely stated that Kojo Annan had resigned when asked in 1999 by the Sunday Telegraph. The report states Mr Massey falsely told the inquiry that Cotecna had no business or financial dealings with Kojo from 1998, and he was “not truthful” when telling the inquiry at one point that he had forgotten about the relationship.
It says he had stopped payment personally to Kojo shortly before a meeting with the inquiry in June 2004, when he claimed not to remember the payments.
Mr Volcker’s report singles out for criticism a number of UN officials. Mr Riza acted “imprudently” in permitting the shredding of “chronological files for the years 1997, 1998 and 1999″ from the office of the chef de cabinet. The timing was “striking” as it came one day after the Security Council passed a resolution to appoint the Volcker inquiry.
The report dwells at length on the relationship between Kofi Annan and his son.
The secretary general knew Kojo had started work for Cotecna in 1995. Mr Annan called Cotecna executive Michael Wilson when the conflict of interest issue was raised, and was falsely told Kojo had left the firm.
The New York Times
March 30, 2005 Wednesday
Late Edition – Final
SECTION: Section A; Column 1; Editorial Desk; Pg. 16
HEADLINE: The Verdict on Kofi Annan
The independent panel investigating possible corruption in the United Nations oil-for-food program in Iraq has delivered a mixed verdict on Secretary General Kofi Annan. On the most explosive issue, the panel largely exonerated Mr. Annan of personal corruption in the awarding of a contract to a company that employed his son. That contract was awarded by officials who had no idea the son even worked for the company. But the panel faulted Mr. Annan for failing to begin a serious investigation six years ago when his son’s involvement became known. This was a grievous lapse, for which the United Nations is now paying the price as critics accuse it of conflicts of interest and corruption in high places.
This second interim report from the panel, headed by Paul Volcker, focused primarily on Mr. Annan’s knowledge of and involvement in the awarding of a contract in 1998 to Cotecna Inspection Services, a small Swiss company, to monitor the importation of goods into Iraq under the oil-for-food program. That company had hired Kojo Annan, the young son of Kofi Annan, in 1995 to work at its offices in Africa when he was fresh out of college. Kojo got the job through a family friend, and the company hoped his contacts in Africa would help procure government contracts there. Many suspect that the company also hoped his U.N. connection would be useful some day.
Nothing has caused the United Nations more grief than the appearance of a conflict of interest. Although the Cotecna contract was a small slice of the oil-for-food program, the link to the secretary general put a face on the allegations of corruption in the program and triggered calls for Kofi Annan’s resignation from critics who were enraged by his opposition to President Bush’s war with Iraq.
The panel has largely undercut that line of attack. It found no evidence that Mr. Annan intervened in the bidding or selection process, and no clear evidence, just a few possibilities, that the secretary general even knew Cotecna was bidding. The panel concludes that Cotecna got the contract because it was the lowest bidder and was deemed capable of performing the work.
Where Mr. Annan dropped the ball most grievously was in his response to public disclosures in 1999 that Cotecna employed his son and, in a separate matter, was being investigated by Swiss authorities for allegedly making illicit payments on behalf of Benazir Bhutto, the former prime minister of Pakistan. All Mr. Annan did was ask his top aides to look into the Cotecna selection process. They reported back — the same day — that Cotecna got the contract because it was the lowest bidder and was thought, on the basis of a Dun & Bradstreet report, to be free of administrative or criminal investigations. The Volcker panel argues persuasively that the secretary general should have referred the matter to U.N. investigators for a more thorough inquiry. Had it done so, the panel believes, Cotecna’s contract would not have been renewed repeatedly.
It is not clear whether Cotecna’s departure would have changed anything in Iraq. But it would clearly have eliminated a weak spot and a perceived conflict of interest.
This latest report cites a lot of questionable practices at U.N. headquarters. Mr. Annan’s former chief of staff authorized the destruction of files. Procurement officials failed to get required financial information from Cotecna before awarding the contract. Even worse behavior was shown by Kojo Annan and Cotecna, who strove mightily to deceive the public, the United Nations and the Volcker panel about Kojo’s continuing financial ties to the company even after he allegedly resigned. Kojo lied repeatedly to his own father.
All this might have been avoided had the secretary general responded properly in 1999. The panel is surely right that the United Nations badly needs stronger conflict-of-interest rules that spell out how to resolve possible conflicts of interest. A cavalier response is the road to trouble, and Kofi Annan needs to demonstrate that he has learned from past mistakes and can still be the strong, effective leader the United Nations needs so badly at this time.
The Toronto Star
March 30, 2005 Wednesday
SECTION: EDITORIAL; Pg. A22
HEADLINE: Let Kofi Annan stay on
The United Nations oil-for food program in Iraq was a fiasco. Iraq pumped $64 billion in oil under strict U.N. controls from 1996 to 2004. It should all have been spent on the Iraqi people. But Saddam Hussein siphoned off $2 billion or more in kickbacks, surcharges and other scams, the U.S. Central Intelligence Agency has reported. And smugglers took $9 billion more, with the knowledge of the United States and other major powers.
U.N. Secretary-General Kofi Annan must carry his share of the administrative blame for what went wrong on his watch. And he has. But there is no evidence that Annan sanctioned the corruption or profited from it, even though critics like U.S. Republican Sen. Norm Coleman have been baying for his head.
A probe by former U.S. federal reserve chair Paul Volcker yesterday cleared Annan of the most damning allegation yet: That Annan interfered in 1998 when the U.N. began handing $66 million in contracts to a Swiss company that employed his son, Kojo. The company, Cotecna Inspection S.A., may have paid Kojo nearly $500,000 before and after he left the firm, exposing the U.N. chief to conflict-of-interest allegations.
Despite these bad optics, though, Volcker turned up no “reasonably sufficient” evidence indicating Annan even knew the firm had submitted a bid to get a contract, much less improperly influenced the outcome.
Annan knew Kojo had worked for Cotecna. But he thought Kojo had cut his ties to the firm. Volcker faulted Kojo for “intentionally” deceiving his father. And Volcker found Cotecna made false statements to the U.N., the public and the probe.
The only fault Volcker placed at Annan’s door – and rightly so – was that Annan failed to launch a “thorough and independent” probe of the enduring Cotecna/Kojo connection, after a newspaper had called attention to it. Instead, one of Annan’s staff made a brief inquiry and reported that U.N. officials handling contracts had no idea of the Cotecna/Kojo link. Volcker said yesterday the U.N. legal office or internal investigators should have been called in.
While Volcker’s findings make no one look good, his probe failed to turn up evidence of criminal wrongdoing by Annan, or even of egregious bad behaviour. Thus, Annan has every right to stay on until his term expires at the end of next year.
He should use the respite to press his plans to reform the Security Council, clean up the secretariat and better equip the U.N. to battle poverty, genocide and terror. It is the best way to restore the U.N.’s damaged credibility and make the institution a force for good again.
Volcker himself has called for “review and renewal” at the U.N., not a lynching. He is right.
Wall Street Journal
Review & Outlook
March 30, 2005
Following yesterday’s publication of Paul Volcker’s second interim report on the U.N.’s Oil for Food program, Kofi Annan issued a statement saying “the inquiry has cleared me of any wrongdoing.” Later, asked if had any plans to resign, he answered, “Hell no!” Question for the Secretary General: How do you define “wrongdoing”?
In the narrowest sense, Mr. Volcker’s Committee found “no evidence” that the Secretary General influenced the U.N.’s 1998 selection of Swiss inspections company Cotecna for an Oil for Food contract. It also found that “the evidence is not reasonably sufficient to show that the Secretary-General knew that Cotecna had submitted a bid on the humanitarian inspection contract in 1998.”
In a broader sense, however, what Mr. Volcker’s report reveals is an “adverse finding” against the Secretary General: That is, patterns of willful neglect, conflict of interest and incompetence that would have any business CEO out on his ear.
Consider just a few salient details that emerge from the 90-page report. In November 2004, Mr. Volcker’s Committee asked Mr. Annan if he had ever met Cotecna’s owner Elie Massey prior to the U.N.’s awarding the inspection contract in December 1998. Mr. Annan said he had met Mr. Massey only once, and briefly, in Geneva in late 1999.
In fact, Mr. Annan had met Mr. Massey twice before the contract was awarded. The first time, in February 1997, he and Mrs. Annan met privately with Mr. Massey and his wife for evening cocktails in Davos, Switzerland, on the sidelines of a meeting of the World Economic Forum. The second time, Mr. Annan met with Mr. Massey privately in his office in New York, apparently to discuss a lottery scheme to raise money for the U.N.
In a subsequent interview with the Committee, Mr. Annan remembered “brief encounters” with Mr. Massey, the purposes of which he could not precisely recall. But given that Mr. Annan’s schedule in Davos was otherwise cluttered with meetings with world leaders, why would he choose to spend his dinner hour in the company of a relatively obscure businessman, save for the fact that Mr. Annan’s son Kojo was employed by him?
Or consider Mr. Annan’s September 1998 luncheon in Durban with Kojo and French businessman Pierre Mouselli. As we reported yesterday — and as the Volcker report confirms — Mr. Mouselli had sought and obtained the meeting with the senior Annan as a prerequisite for going into business with Kojo. In Mr. Mouselli’s recollection, he and Kojo discussed Cotecna with the Secretary General, along with their other business plans.
In his meeting with the Committee, the Secretary General initially acknowledged only a brief encounter with his son and Mr. Mouselli. According to the report, “when shown his appointment schedule indicating lunch with ‘Kojo & his friend,’ the Secretary General stated he did not ‘recollect having lunch with Kojo and a friend’ and that it was a ‘hectic time for me.’ The Secretary-General denied that he was present with Kojo Annan and any business associates at any time that Cotecna’s business was discussed.”
Since Kojo refuses to cooperate with the Volcker Committee (he calls it “part of a broader Republican political agenda”), the question of what was discussed at the Durban lunch is a matter of Mr. Mouselli’s word against Mr. Annan’s. But we have interviewed Mr. Mouselli and find his testimony convincing — more so than a Secretary General whose memory seems repeatedly to have been “refreshed” by Committee investigators.
Still, the matter of Mr. Annan’s credibility as a witness is almost trivial next to what the report reveals about the U.N.’s mismanagement of the Cotecna bid, which is merely symptomatic of its larger management and conflict-of-interest failures.
Throughout Mr. Volcker’s investigation, the U.N. has steadfastly maintained that it hired Cotecna because it put in the lowest bid — $499 per man-day rate against $600 for the next-lowest bidder. But as we have previously reported, Cotecna upped its asking price within days of winning the contract without triggering a competitive rebid. Then too, at the time the U.N. awarded the contract to Cotecna Mr. Massey was under criminal investigation by a Swiss magistrate on money laundering charges.
U.N. procurement officials claim to have been ignorant of Cotecna’s legal troubles, despite their having been the subject of a front page story in the New York Times. Yet according to the report, Mr. Annan himself had known of the allegations against Cotecna since 1998, but had been reassured by his son that “there was not much to it.” And it finds that had there been more than a “one day inquiry” into 1999 news reports that Kojo worked for Cotecna, it is “unlikely that Cotecna would have been rewarded renewals” of its U.N. contracts. The man who ordered that perfunctory probe, Mr. Annan’s then-chief of staff Iqbal Riza, shredded potentially relevant documents last year.
What we have summarized here provides merely a taste of the full report, which can be found at the Volcker Committee’s Web site: www.iic-offp.org1. Anyone who still thinks Mr. Annan has been acquitted of “wrongdoing” would do well to read it, as would anyone who still believes Mr. Annan is fit to lead the United Nations.