Oil-For-Food: Facts

William Safire

William Safire is a senior columnist for the New York Times who recently announced his retirement. Safire has written frequently and critically about the UN Oil-For-Food Program (OFFP).

Safire's columns contain a number of errors or misleading statements about the Oil-For-Food Program.

1. In various columns, Safire has inflated the magnitude of the skimming from the OFFP, and/or conflated these problems with oil smuggling and inaccurately attributed all the illicit revenue Saddam Hussein received to the OFFP.

Two examples of this are:

New York Times,, June 23, 2004: "This was the biggest cash cow in the history of the world," says one of the insiders familiar with the $10 billion United Nations oil-for-food scandal.

November 15, 2004: "Going back to 1991 and including the predecessor to oil-for-food, an outside source tells me that the U.N.-maladministered profiteering reached $23 billion. Such heavy spending affects U.N. votes."

The facts are these:

Three investigations have reported to date on the OFFP and the highest amount of illicit revenue attributed to OFFP among them is $6.5 billion (from the Senate Subcommittee on Permanent Investigations), not an insignificant number, but far short of the $10 or $23 billion reported by Safire.

Equally important, each of the three investigations -- the Senate Subcommittee on Permanent Investigations, the Iraq Survey Group (Duelfer report) and the Government Accountability Office (GAO) -- found that oil smuggling was the source of far more illicit revenue for the Hussein regime than the OFFP. The Duelfer report says as much as ¾ of the illicit funds came from oil smuggling. This distinction is quite significant because the UN was not responsible for oversight of oil smuggling. That fell to the Multinational Interception Force (MIF), led by the Fifth Fleet of the U.S. Navy, which was established following the inception of sanction in 1990. By creating the misleading impression that all of the illicit revenue that Hussein skimmed during the sanctions regime came from OFFP, Safire appears to place full responsibility for the scandal at the feet of the UN, which is clearly not the case.

In fact, there is clear evidence th e U.S. was aware that Iraq was trading oil in violation of the UN sanctions with its neighbors as far back as 1991, and did little, if anything, to stop it. In fact, the U.S. State Department sent waivers to the Congress dating back to 1991, acknowledging the violations of UN sanctions, and waiving the imposition of section 531 restrictions on U.S. foreign aid to Jordan and Turkey . These restrictions on U.S. foreign aid were adopted in 1991 to promote compliance with the UN sanctions on Iraq by requiring that U.S. foreign aid be terminated for any nations violating these UN sanctions.

Lastly, Safire refers to a predecessor to the OFFP. No such program existed prior to the launch of OFFP in December, 1996.

2. Safire also uses strong language in many of his columns to accuse Secretary-General Annan and the UN of obstructing investigations and abusing Paul Volcker. On November 16, 2004, he wrote: "If legislative investigators were prosecutors, the name of the game Annan and his enablers are playing would be called 'obstruction of justice.'" In that same column, he wrote: "Sad to see is the secretary-general's manipulative abuse of Paul Volcker." Earlier on June 15, Safire wrote: "Because several columns of mine had zapped the United Nations for its cover-up of the costliest financial rip-off in history…" And, on April 19, he wrote "obstruction of justice has never had it so good."

All of these characterizations suggest Annan and the UN are engaged in criminal activity by trying to hide the problems with OFFP. The facts lead to the opposite conclusion - Annan has taken decisive action to uncover any problems with OFFP, and has made clear that nothing will stand in the way of getting to the bottom of the problems.

In April 2004, UN Secretary-General Kofi Annan announced the formation of a high-level Independent Inquiry Committee (IIC) charged with conducting an inquiry into allegations of impropriety in the operation and management of the Iraq OFFP. The IIC is chaired by the respected former U.S. Federal Reserve Chairman, Paul Volcker. To ensure the IIC can conduct a full and thorough investigation, the following steps have been implemented:

• Unrestricted access to all relevant documents. The IIC has immediate and unrestricted access to all relevant documents under the UN's control. Because many of the documents and contracts contain confidential information about private companies and to assure the credibility of the investigation, all UN agencies, funds and programs that were involved in OFFP contracts have been advised not to disclose information to any parties outside of the high-level Committee.
• Agreement on access to records. The Committee has reached an agreement with U.S. and Iraqi authorities with regard to access to OFFP records in Baghdad . The Committee will access the records through the international accounting firm of Ernst and Young LLP, which was retained by the Iraqi and U.S. authorities to organize Iraqi records related to OFFP.
• UN member states pledge cooperation. Security Council Resolution 1538 was approved on April 21, 2004, with unanimous support pledging the full cooperation of Member States in the investigation.
• UN personnel instructed to cooperate. The Secretary General instructed all UN staff to cooperate fully with the IIC's investigation as a condition of employment. The Secretary-General has stated that UN personnel who do not fully cooperate with the independent investigation will face disciplinary action and possible dismissal.
• Protection for whistleblowers. Whistleblower protection is available to protect officials and personnel, as appropriate, from improper repercussions resulting from their cooperation with the inquiry.
• Requested funds provided. The UN has provided the IIC with the funding it has so far requested for its inquiry. This includes $4 million in start-up costs and $30 million requested for the investigation itself.
• Interim report and findings. On August 7, 2004, the Committee issued a three-month update report detailing the progress it has made on the inquiry. It has since indicated it will provide a further report on its investigatory findings in January 2005 and will make the evidence to support these findings publicly available as well.

Safire's principle concern appears to be that the UN has not turned over its internal audits to congressional investigators. But these audits are in the hands of IIC, and Volcker indicated in a November 16, 2004 letter to Senators Coleman and Levin that the audits and other evidence will be made public once the IIC has finished its work with them, probably in January. Volcker's letter goes on to explain "the policies of our Committee are designed to reconcile essential and desirable transparency and disclosure in our work with the need to conduct our investigation with the degree of confidentiality and simple fairness necessary... The stated policy of the Committee, consistent with these understandings, is that our reports and findings will be accompanied by disclosure of all evidence bearing on those findings… We anticipate these disclosures will include the documentary evidence explicitly mentioned in the Senate letter, certainly including the internal (and external) audit reports."

Finally, there is no evidence whatsoever that Annan or the UN have manipulated the IIC or have failed to cooperate in any way. Indeed, in an interview on "The Charlie Rose Show" on November 24, 2004 , Volcker said his investigation "... has a very important power that nobody else has. We have access to the UN material."

4. A number of Safire's columns also make misleading statements about the UN's oversight of OFFP. Whatever flaws there may have been in the management of the program, it is very misleading to suggest that Annan "passed the failed-supervision buck to the Security Council's 661 committee (New York Times, May 4, 2004), or to say the UN attempted "to shift responsibility for the see no-evil oversight."

The facts are these:

Over the course of the OFFP, officials from the Office of the Iraq Program (OIP) made the UN Security Council's 661 Committee aware of potential irregularities in contracts. The 661 Committee was composed of all members of the UN Security Council and had sole discretion over approving the OFFP contracts. Below are a few examples:

• UN oil overseers first alerted the Security Council's 661 Committee on November 17, 2000 that the oil pricing formulas proposed by Iraq for the month of December did not represent "fair market value," because the oil appeared to be considerably under-priced. As a result of the alert provided by UN officials, on December 15, the 661 Committee directed oil overseers to advise buyers of Iraqi oil that they should pay no surcharges on oil sales since this would be considered illegal. According to various accounts including the reportof the Iraq Survey Group led by Charles Duelfer, this action sparked by diligence on the part of OIP effectively ended Saddam's practice of using oil surcharges to acquire illicit revenue.
• In early March, 2001, the issue of oil surcharges was further reported by the Secretary-General in his report to the Security Council.
• Regarding oil surcharges, the 661 Committee did not reach consensus as to how to address the problem until October, 2001, when the Committee decided to introduce a "retroactive pricing mechanism" for Iraqi oil in an attempt to eliminate the surcharges on oil.
• Throughout 2001 and 2002, hundreds of contracts were queried by UN experts for potential over-pricing. At least 70 cases were reported to the 661 Committee and not a single case was placed on hold for pricing issues and most were ultimately approved. Though the U.S. and the UK held up 5,000 contracts over dual-use concerns, no contract that the OIP experts flagged for potential pricing irregularities was blocked by the 661 Committee. (View examples of contracts flagged by OIP over pricing concerns.)

As Fairfield University professor, Joy Gordon, wrote in the December, 2004 issue of Harper's Magazine,

"The Oil-for-Food Program was not some concoction of Kofi Annan's. It was created by a vote of the members of the Security Council. And every aspect of how the program ran - what goods were allowed, the monitoring procedures, the transfer of funds, everything - was explicitly established by the members of the Security Council. Kofi Annan did not have a vote; but the United States and Britain did, and they approved of every resolution and decision that determined how the Oil-for-Food Program worked. Whatever critics may say, 'the UN bureaucracy' did not design a program that handed over cash to Saddam Hussein."