When Secretary General Kofi Annan declared in an unguarded moment last week that Saddam Hussein made most of his money “on the American and British watch” rather than from the UN oil-for-food program, he was expressing a view that is widely held but seldom uttered at the organization as it tries to avoid clashing with Washington.
Speaking to a gathering of former United Nations communications officials and thinking his comments were confidential, Annan said Hussein pocketed far more from sanctions-skirting oil sales to Jordan and Turkey, which were being monitored by the U.S. and Britain, than from the scandal-tainted relief program run by the Security Council.
“They were the ones who had interdiction,” he said. The meeting was broadcast on internal UN television.
The CIA’s Iraq Study Group has estimated that the illicit funds entering Iraq despite the sanctions placed against the country totaled $10.9 billion, with $8 billion coming from smuggling outside the oil-for-food program. But that larger amount has received less scrutiny, while allegations of mismanagement and corruption in the oil-for-food program are the subject of investigations by the Justice Department, five congressional committees and an independent panel led by Paul Volcker.
Volcker has promised that this aspect of Hussein’s exploitation of UN sanctions will be examined in his final report in June, and in Washington it has drawn the particular attention of Sen. Carl Levin of Michigan, the ranking Democrat on the Senate permanent subcommittee on investigations, which is conducting an inquiry.
In an interview, Levin said he has no quarrel with Annan’s comment. “There is no question that the bulk of the illicit oil revenues came from the open sale of Iraqi oil to Jordan and to Turkey, and that that was a way of going around the oil-for-food program,” he said. “We were fully aware of the bypass and looked the other way.
“To lay all that on the UN’s doorstep seems to me, No.1, not fair and, No.2, to avoid some self-examination. We have to look in the mirror here and recognize that the direct sales that we consented to and even facilitated were the major part of the illicit revenue.”
E-mail messages collected in the investigation and released by Levin’s office have shown how oil tanker captains working for a Jordanian trading company and a U.S. broker were instructed to take oil from Khor al-Amaya, an Iraqi port outside of UN control, and given indications of how to avoid being stopped by the U.S.-led naval interdiction force.
“What those e-mails tell us is that we were an active participant in making those sales,” Levin said.
The U.S. mission to the UN responded to Annan’s comments by circulating the April 12 congressional testimony of its chief of staff, Thomas Schweich. In it, Schweich argued that the U.S. had been open about allowing exports to Jordan and Turkey, which, he said, were not analogous to “the bribery, the corruption, the kickbacks, the things that were done for self-interest secretively in a non-transparent manner that are really just acts of fraud and crime.”
Another witness at the same hearing, Joy Gordon, a Fairfield University professor who is an expert on economic sanctions, disputed that interpretation.
“What we saw at first was the accusation that the UN, and particularly the secretariat, had allowed Saddam to get his hands on $10 billion or $20 billion of illicit funds,” she said. “What we’re seeing now is the State Department saying that this smuggling to Jordan and Turkey was not illegitimate because it was de facto legalized by the Security Council, and additionally permitted out of altruism and effectively in compliance with international law. Those claims are patently false.”
