Ethics Newsline®

UNITED NATIONS
At the request of the United Nations, an independent panel was launched last week to investigate allegations that senior U.N. officials accepted kickbacks from Saddam Hussein while administering the U.N. Oil-for-Food program.

More than 270 companies, government officials, and others from 46 countries also are implicated in papers from the former Iraqi Oil Ministry now being held by the Iraq Governing Council, according to a report from ABC News.

The Washington Post reports that among the individuals who allegedly took part in the scams is U.N. Undersecretary General Benon Sevan, who administered the Oil-for-Food program, which began in 1996.

Sevan and others allegedly paid $4.4 billion in kickbacks to Saddam Hussein’s government in exchange for oil vouchers and other incentives that gave them the right to trade in Iraqi oil at cut-rate prices.

Though ABC News last week quoted an August 1998 memo from Iraq that allegedly implicates Sevan in a $3.5 million deal in illegally traded oil, Sevan so far has denied any wrongdoing.

U.N. Secretary General Kofi Annan last week said the U.N. will “investigate these allegations very seriously,” proposing a three-member independent panel to look into the charges.

Russia, whose Communist Party, Liberal Democratic Party, Presidential Cabinet, and Russian Orthodox Church all are implicated in the kickback scheme, initially blocked the proposed investigation.

After Annan interceded with a personal phone call to Russian Foreign Minister Sergey Lavrov, the country’s former ambassador to the United Nations, Russia relented, reported the New York Times.

The inquiry panel will be headed by Paul Volcker, former head of the U.S. Federal Reserve. He will be joined by a former South African prosecutor of war crimes in Rwanda and the former Yugoslavia and by a Swiss law professor with expertise in tracking money laundering, according to the Times.

“If there is substance” to the allegations, Volcker said last week, the best course will be to “get it out there, get it out in a hurry, and cauterize the wound.”

Last month, the independent investigative arm of the U.S. Congress concluded that Saddam Hussein’s government pilfered more than $10 billion from the Oil-for-Food program, which was designed to help the Iraqi people endure an international trade embargo imposed after the 1991 Persian Gulf War.