TCS Daily

The UN's Oil for Fools Program

By Ariel Cohen - February 16, 2004 12:00 AM

Oil is not just fuel for your car. It is a mighty political weapon. The latest revelations that the deposed Iraqi dictator Saddam Hussein used oil sales under the U.N. oil-for-food program to buy friends and influence policy around the world should turn on an alarm in Washington, New York, Paris and other capitals.

Just as Saddam's oily revenues corrupted presidential chancelleries and newsrooms, funds from other major Middle Eastern oil suppliers with ambitious religious and political agendas may wreak even more havoc.

At stake is the integrity of the foreign policy process, which is supposed to, but often does not, reflect national interests -- not the size of bribes in ministers' bank accounts. However, an ugly reality is emerging, one that should be investigated by U.S. intelligence and law enforcement agencies.

The documents uncovered in Baghdad by the Iraqi Oil Ministry and published in Al Mada, an independent Iraqi newspaper, are a jackpot of embarrassing information. Their veracity is confirmed by Naseer al-Chaderji, a senior member of the Iraqi Governing Counsel (IGC), and by Claude Hankes-Drielsma, the UK Chairman of Roland Berger Strategy Consultants and an advisor to the IGC.

The documents list dozens of organizations and individuals in over 50 countries who were instrumental in orchestrating pro-Saddam policies around the world, and point to a medley of allies, from the pro-Saddam British back-bencher MP George Gallaway to President Jaques Chirac's close friend Patrick Maugein, an oil trader, and to highly influential former French Interior Minister Charles Pasqua. The ex-minister has denied any connection to Iraq.

The list goes on to include Indonesian President Megawati Sukarnoputri, the Bulgarian Socialist Party, the highly influential Russian Orthodox Church, Yassir Arafat's Palestine Liberation Organization and Jordanian Islamic radical leader Layth Shbeilat. Many of those fingered have denied the accusations. Others, like Mr. Maugein, have announced that they "did nothing wrong." In view of the internal corruption scandals in France involving Mr. Chirac and his ex-heir-designate former Prime Minister Alain Juppe, what else can they say?

There are a few surprises on the list. First, the extent to which Russia benefited from doing business with Saddam. While other countries, organizations and individuals received several millions of barrels, Russia got the lion's share of 1.3 billion barrels. Vladimir Zhirinovsky's "Liberal Democratic Party" is listed as receiving a whopping 80 million barrels. A senior official in that extremist party complained to me in a 2002 meeting at the Duma that Washington's military action against Saddam would "destroy the most lucrative business" they ever had.

The Russian Communist party, with a smaller donation from Baghdad, was as vociferously anti-American as its ultra-nationalist colleagues. President Putin's United Russia party was equally well-oiled. Russia's politically influential oil companies received close to a billion barrels with market value of over $20 billion. "Our foreign ministry is for sale as far as the Russian oil companies are concerned. A department chief receives about $200 a month -- you do the math," a Moscow-based Russian Middle Eastern expert told me. Understandably, Moscow's resistance to the U.S.-led war against Iraq was as implacable as it was shrill.

Secondly, many names and positions on the list require further investigation and clarification: who is the anonymous "Director" of the Russian Presidential Administration? The recently retired Alexander Voloshin, Putin's Chief of Staff, or a lower-level official, possibly still in place?

Did the millions of barrels earmarked for the "Ukrainian Social Democrat Party" benefit President Leonid Kuchma's Chief of Staff Alexander Medvedchuk, the leader of that party or go directly the president who allegedly sold arms to Baghdad?

While Bernarde Merimee, France's UN Ambassador who is on Saddam's buddy list, denied accusations, can banking details available in Baghdad exculpate the French diplomat? Finally, is a "Mr. Sevan" who received oil export vouchers in Panama the same person as the U.N. Assistant Secretary General Benon V. Sevan, who ran the oil-for-food program, as Therese Raphael of the Wall Street Journal seems to believe? So far, U.N. Secretary General Kofi Annan has bucked calls for an internal investigation, and the U.N. bureaucracy has circled the wagons, stonewalled, and resisted an external investigation of the oil-for-food program.

Several important lessons arise from the discovery of Saddam's list. First, this is just the beginning: There are thousands of documents in Baghdad that need to be catalogued, translated, analyzed, and investigated. The precedent -- the Eastern German intelligence service STASI archives, which exposed hundreds of spies in Europe and America.

Second, the U.N. may have done more damage than good in Iraq -- and may do so again. The U.N. oil-for-food officials knew about the global bribery effort and did nothing to stop it. Moreover, it is possible that the officials in that august body facilitated and benefited from at least some of the transactions.

This is not the first time that the U.N. has bungled major policy undertakings: the U.N. aid effort in the West Bank and Gaza called United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) only perpetuated the refugee problem. It did nothing to resettle the refugees, has been repeatedly caught aiding and abetting terrorists, and is thoroughly penetrated by Hamas.

Third, persistent rumors are worth checking. Stories about Saddam's global payola have been in circulation for years, with nobody investigating.

Similar stories are in circulation about Saudi and Chinese influence-buying. It is high time the law enforcement and intelligence agencies in the U.S. and Europe cooperated in investigating.

Finally, consumer countries have to strive to turn oil suppliers into what they should be: commodity providers, not power players corrupting global political systems, media, and academia. Political agendas should be set at the ballot box and in legislatures, not in desert tents. Global bribery may be as dangerous to the West as global terrorism. Saddam's buddy list is just the tip of the iceberg.

Ariel Cohen, Ph.D., is Research Fellow at the Heritage Foundation. His expertise is in international energy security.


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