Wall Street Journal March 8, 2004 The Cash-for-Saddam Program By MICHAEL SOUSSAN
The cat is out of the bag. Documents recently discovered by the Coalition Provisional Authority, and corroborated by interviews with former Iraqi officials, confirm that Saddam Hussein extorted cash kickbacks from companies trading with Iraq under the U.N. Oil-for-Food Program. The most damning document is a memo dated Aug. 3, 2000, by Iraqi Vice President Taha Yassin Ramadan (now in U.S. custody) instructing his ministers to tell their suppliers to inflate their prices by the "biggest percentage possible." As a former employee of the program, I cannot say I was surprised by this news. What surprised me was the U.N.'s response to it. * * * U.N. officials claim they were unaware of such fraudulent practices by the Iraqi regime until after the Iraq War. They would be better off telling the truth. By winter 2000, serious concerns had been raised about the use of front companies by the regime. We had heard allegations of a 10% kickback scheme, and were exceptionally well positioned to investigate the matter. Why did the U.N. fail to investigate? U.N. officials claim it was not their responsibility to hold the Iraqi regime accountable. False again. The whole point of putting the U.N. in charge of overseeing Iraq's trade was to ensure that the country's oil revenues were used exclusively to help its ailing population, not to fill Saddam's personal coffers. And according to Security Council resolutions, the U.N. had a legal responsibility to report on any issue affecting the "adequacy, equitability and effectiveness" of the Oil-for-Food Program. Saddam's kickbacks affected all three aspects. There were many instances in the time I was there when the U.N. preferred to look the other way rather than address obvious signs of what was going wrong. Take the medical sector. The regime's decision to use kickback-friendly front companies to purchase drugs meant that hospitals often received medicines that were nearly expired or otherwise damaged from unscrupulous suppliers. Iraqi doctors would complain about the quality of the drug supply to our U.N. observers. Kurdish leaders raised similar concerns directly with high-level U.N. officials. We knew exactly how much the Iraqi government paid for any contract, and we had the authority to inspect each shipment when it crossed into Iraq. We had all the elements necessary to piece together a clear picture of what was going on and alert the Security Council to the fact that Saddam and his cronies were buying poor quality products at inflated prices and cashing in the difference. While the U.N. likes to claim this was the most audited program in its history, I never once read an audit report that raised questions about these practices -- even though they were an open secret to anyone involved in the program. Some $31 billion worth of humanitarian supplies were delivered to Iraq during the lifespan of the program. If 10% kickbacks were indeed extorted from this trade, that means Saddam cheated his people out of $3 billion. In reality, the profits he reaped from the program may have been much higher. If one adds the kickbacks he received from the sale of underpriced Iraqi crude, the figure might double. The continued building of palaces and other extravagances give some clue to where this money went. What is left of it? Where is it held? These are questions to which Iraqis want answers. And the U.N. has a responsibility to help them by opening the books of the Oil-for-Food Program. As long as Saddam was in control, it was perhaps inevitable that he would have profited from any attempt to feed his population. But the least the U.N. could have done was denounce his practices. Instead, high-level U.N. officials concentrated their fire on the Security Council. Assistant Secretary General Denis Halliday even accused the Council of overseeing genocide in Iraq. At the time that he made this claim, the Iraqi regime was refusing to purchase as much food and medicine as the U.N. had recommended. One has only to read the flowery letter Kofi Annan sent to Mr. Halliday upon his resignation to understand that our marching orders were confused. Were U.N. employees supposed to oppose Security Council resolutions, lobby for a lifting of sanctions and whitewash the regime? That is what a majority of our Baghdad staff did. No one took action to redress their behavior. The small minority who sought to hold the regime accountable were overruled, sidelined and sometimes branded spies by our own leadership. Meanwhile, the Saddam regime had infiltrated our mission in Iraq. All of the 4,233 local staff hired by the U.N. were required to report to Iraqi intelligence services. At our Baghdad HQ, U.N. mission leaders saw no problem with assigning Iraqi staff to man our switchboard, fax machines and photocopy room. Our 151 international observers were under siege, spied on by their employees and sometimes threatened by Iraqi officials when they tried to communicate information to New York that was embarrassing to the regime. All of this severely curtailed the U.N.'s ability to do its job. The U.N. should not have been in the business of covering up for Saddam; and it should not now stonewall efforts to have an independent investigation look into which companies broke the law in their dealings with the regime and who profited from schemes to get around the restrictions set out under Oil-for-Food. If the U.N. fails to become a partner in the investigative process, it may end up as co-defendant in a scandal that has yet to reach its full-blown proportion. Mr. Soussan is a former program coordinator for the U.N. Oil-for-Food Program.
