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Wednesday, August 10, 2005

Oil-for-Food Corruption - New York Times

Oil-for-Food Corruption - New York TimesAugust 10, 2005
Oil-for-Food Corruption

The latest report on the oil-for-food program at the United Nations and a guilty plea by a procurement officer provide the most troubling evidence yet of criminality at the U.N. The commission investigating the program charges that Benon Sevan, who ran it, received kickbacks. The panel concludes that Mr. Sevan deposited at least $147,000 in cash generated by Iraqi oil transactions and did not receive the money from an aunt, as he has claimed.

Mr. Sevan denies any wrongdoing. If he did take kickbacks, it is still unclear whether the Iraqis thought they were bribing him, rewarding him for being on their side on many issues or simply yielding to his persistence.

The report cites instances in which Mr. Sevan argued for easing constraints on Iraq and contends that he knew from personal experience that Iraq was imposing surcharges on recipients of oil allocations yet played down the problem. What's striking is how small-bore the corruption he is accused of looks against the backdrop of a $65 billion oil-for-food program.

The guilty plea from the procurement officer, Aleksandr Yakovlev, had little to do with the oil-for-food program, but underscores how corruption may have infected many procurement programs at the organization. The panel, headed by Paul Volcker, the former Federal Reserve chairman, found that Mr. Yakovlev had unsuccessfully solicited a bribe from a company seeking an oil-for-food contract. It concluded that he had received more than $950,000 in payments from companies that won contracts in other U.N. programs.

Much of the evidence against Mr. Yakovlev seems to have been uncovered by the U.N.'s own internal investigators, who provided leads to the Volcker panel and the United States attorney for the Southern District of New York, whose office is doing its own investigation of the oil-for-food program. The accusations were clearly on target. When the U.N. lifted Mr. Yakovlev's immunity from prosecution, he promptly pleaded guilty to several charges.

The U.N. clearly needs management reform and closer monitoring to prevent corruption. But neither of these cases sheds much light on what sins, if any, can be attributed to Secretary General Kofi Annan, or on how Saddam Hussein was able to manipulate the program to gain perhaps $2 billion in illicit revenue. For that, we must await next month's report.

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