July 12, 2004 http://www.nytco.com/
Kofigate Gets Going
At least eight official investigations have begun into the largest financial rip-off in history: preliminary estimates from the G.A.O. point to $10 billion skimmed or kicked back or otherwise stolen in the U.N. dealings with Saddam Hussein.
Seeking to manage the news of the scandal, U.N. Secretary General Kofi Annan appointed former Fed chairman Paul Volcker to head an internal investigation. That seemed to slam the door on U.N. cooperation with truly independent inquiries, but Volcker last week announced that "appropriate memorandums of understanding with a number of official investigatory bodies are in place or in negotiation."
To overcome criticism like mine of his committee's lack of subpoena power or ability to take testimony under oath, Volcker has hooked up with Robert Morgenthau, the Manhattan district attorney, who has been prosecuting two men in an unrelated distressed debt case at BNP Paribas; that's the French bank the U.N. used for its oil-for-food letters of credit. That grand old prosecutor has a staff skilled at following money and has sitting grand juries available to encourage truth-telling.
Morgenthau's crew, in turn, has a collaborative relationship (pardon the _expression) with the nonpartisan staff of the Senate Permanent Subcommittee on Investigations (P.S.I.). The U.N. has stonewalled three committees of the U.S. Congress, refusing to reveal its 55 internal audits, claiming that our State Department's members on the U.N. "661 committee" had approved all kickback-ridden contracts.
But State has been slow-walking Congressional requests for documents that reveal its own poor oversight and that embarrass the U.N., which it now wants to placate. State could impede the hunt overseas through mutual legal-assistance treaties, and can continue to diddle the House committees of Henry Hyde and Chris Shays, but our diplomats cannot evade chairman's letters from the Senate P.S.I.
Who else is on the trail of the skimmed billions, much of it owed to those Kurdish Iraqis shortchanged by U.N. dispensers of largess? Playing catch-up to Morgenthau, a Justice Department U.S. attorney in New York has subpoenaed records of several American oil companies; our Treasury Department charged a couple of minor players with illegal transactions with Iraq.
Meanwhile, back in Baghdad, where much of the grandest larceny ignored by the U.N. originated, the investigation by the old Governing Council was stopped by Paul Bremer because its leaks alerted the world and upset the U.N. The search for damning documents was re-launched under non-Chalabi auspices, but the chairman of Iraq's Supreme Audit Board, Ihsan Karim, was killed on his way to work two weeks ago. Criminal enterprises have heavy money at stake in this.
Volcker, still in a start-up stage after four months, assures The Wall Street Journal he hired a great senior staff. But one is Richard Murphy, former ambassador to Saudi Arabia and a veteran Arab apologist on TV. Will he prevail on Jordan's king to get the Philadelphia Investment Corporation in Amman to open its files about financing favored "beneficiaries"? Or dare to demand the United Arab Emirates order its Al Wasel and Babel trading company to explain the lucrative electrical projects that had nothing to do with food?
Another is Prof. Mark Pieth of the University of Basel, of high repute in countering money laundering. Key to the transmission of oil-for-food funds is Cotecna Inspections, a Swiss corporation that got the U.N. contract to monitor deliveries and whose "notice of arrival" was pure gold to corrupt sellers. Mr. Annan's son was its consultant just before the fat contract was issued; even after a U.N. audit showed suspicious inspection inadequacies, Cotecna's contract was expanded. Professor Pieth's work will be judged on whether he can crack Swiss government secrecy to reveal the goings-on at Cotecna.
These investigations were triggered by the press. But why should competitive journalists wait months for official leaks? Bankers, traders and honest U.N. underlings are eager to whis-tleblow; shoe-leather reporting is required to hot-foot the watchmen now that they are finally awake.
Copyright 2004 The New York Times Company |
