Interim Oil For Food Report: Part 3

The UN Administrative accounts.

When the OFF program was setup 2.2% of the total revenue from the sale of Iraqi oil was allocated towards Administration of the program itself. The Commission has the following findings on the use of those funds (about $1.6 billion)

The Committee finds that the ESD Account was not treated by the UN as a commission, either by design or practice, but rather as a necessary pool of funds… The budgets and actual expenditures were always significantly less than the amount of funds available, so much so, that $372 million, or 27% of the … proceeds allocated to ESD… was not used, but rather was transferred out of the account to be used directly for the beneft of the Iraqi people.

… With the one exception mentioned below, the Committee found no evidence that ESD funds were used for any purpose other than the Programme.

[The exception]

the Committee identified one instance in which an individual’s remuneration was inappropriately allocated to and funded from the ESD Account…. it has concluded that this instance is likely an isolated occurence.

So… you’d have to count that section of the report as a Win for the UN.

And finally… on the “Magnitude” of the Iraqi Regime benefit from the OFF Programme.

What does appear clear is that the major source of external financial resources to the Iraqi Regime resulted from sanctions violation outside the Programme’s framework.

United States law requires that assistance programs to countries in violation of UN sanctions be ended unless conitnuation is determined to be in the national interest. Such determinations were provided by successive US Adminisrtations for both Jordan and Turkey

In the later stages of the Programme, substantial Iraqi sales of oil were made to Syria and small sales to Egypt under similar “protocols”.

So it seems most of the money Iraq made wasn’t off of scamming the OFF program, but rather smuggling deals with other countries. The committee says that towards the end, some smuggling may have gone on, “under the cover of shipments authorized by the Programme. The Committee is investigatin whether there was any dereliction of duty on the part of those administering the Programme in identifying and reporting breaches of the sanctions…”

So, so far… after reading the introduction a few things seem clear.

  1. The Programme was a mess of bureaucracy, and was a victim of the internal politics of the UN, but that was a function of the member states of the UN and not necessarily any individual UN representative. Though Gali seems to have caved in rather easily.
  2. Benon Sevan is obviously corrupt and was in a conflict of interest and should be prosecuted… though it seems he is the only one who has, so far, been directly pointed out as a beneficiary at the UN.
  3. Iraq was actively trying to reward people who might give them political favours. And was also actively smuggling oil for its’ own benefit, something which was ignored by the UN, other countries, including the US.


The BBC is reporting that the UN has suspended Benon Savan and Joseph Stephanides and they will have charges brought against them on Wednesday. If those charges are criminal, then Kofi Annan has said that he will waive their diplimatic immunity.

One reply on “Interim Oil For Food Report: Part 3”

  1. Chris, I think you need to stop rationalizing the UN scandal with “well, all nations and large organizations are corrupt”. It’s really lame. When there is corruption, faith is lost. The UN has had this problem pushed under the rug for far too long. They simply cannot continue the ploy of self-righteous finger pointing and be rewarded with winks and nods. You have characterized this investigation as the US’s attempt to “embarrass”
    the UN. The UN needs to reform if it is ever to be of any real use to the planet in the years to come. It looks to me that it not only needs to reform, it needs to re-organize.

    The US for one, is not going to keep pouring money into an ineffective and corruption prone UN forever. Time to pull heads out of the sand and get cracking.
    The dithering over Dafur is more of an outrage to me than even the OFF debacle.

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