Ethics Newsline®

UNITED NATIONS
More than two thousand firms involved in the U.N.’s Oil-for-Food Iraq relief program — almost half of all companies involved — paid kickbacks and illegal surcharges to the government of Saddam Hussein, according to a report by an independent inquiry committee.

Paul Volcker, the former U.S. Federal Reserve chairman who headed the probe, said the schemes festered because of lax supervision by the United Nations and by major nations, according to the BBC.

“What I do want to emphasize is that the corruption of the program by Saddam … could not have been nearly so pervasive had there been more disciplined management by the U.N. and its agencies,” Volcker was quoted as saying in a report from the Associated Press.

Saddam Hussein’s government allegedly pocketed more that $1.8 billion by skimming from the program.

Many firms and nations named in the report have disputed portions the findings. The Dutch firm Saybolt, which was hired to verify that proceeds from Iraqi oil sales went only for humanitarian purposes, claimed that contrary to the Volcker report, the company properly carried out its mandate and initially brought the problem to light with its own internal investigation, according to Radio Netherlands. Reuters reported that Russian officials claim some of the documents used in the probe were fakes.

The scathing report is expected to lead to various national probes and prosecutions, with Volcker promising to cooperate in legal actions against alleged conspirators. The United Nations also is crafting several reform measures.