UN scandal tests investigators

Former Federal Reserve Chairman Paul Volcker leads just one of nine separate investigations into a United Nations humanitarian program that may have enriched Saddam Hussein and UN officials.

But Mr. Volcker's inquiry is arguably the most significant, as he heads the UN's internal probe into what some critics describe as "the biggest financial scandal in history." An estimated $10 billion was siphoned from the $65 billion Oil for Food program.

Volcker recently finished assembling his investigative team and vowed to produce a "truly definitive report" in six to eight months. "The chips will fall where they may," he wrote in The Wall Street Journal earlier this month.

Yet some critics question the UN's ability to investigate itself and how effectively Volcker will be able to examine the 270 companies and individuals from 46 countries - including the UN official who ran the program - implicated in scheming with Mr. Hussein. Critics suggest the findings will reveal that some of the countries most opposed to sanctions and military action - like Russia and France - were some of the greatest beneficiaries of the sweetheart deals and essentially did Hussein's bidding.

"If Russian companies were recipients of billions of dollars worth of contracts, then what distortion, if any, did it have on Russian policymaking at the UN?" asks a congressional aide to the US House of Representatives Committee on International Relations, which is also investigating the program. "That's a steep charge, but as we go further, it's something we'll have to consider."

It is unclear how much access Volcker and his team will have to internal UN audits from the program. And some critics suggest that the US might try to stall any investigation to avoid embarrassing the UN and fellow member states in order to garner more support for Iraq.

In 1991, he UN Security Council slapped sanctions on Iraq for invading Kuwait and to force Iraq's full disarmament of its unconventional weapons. But the sanctions appeared to hurt ordinary Iraqis and not Hussein. So the Oil for Food program was hatched in 1996, which allowed Iraq to sell oil and use the proceeds to purchase food and humanitarian supplies. Over the next seven years the UN says the program fed 27 million Iraqis, saved a least a half a million children from malnutrition, helped fight diseases, and cleared 135 million square feet of land of mines.

But Hussein was allowed to choose his own business partners for the program. This allegedly enabled him to game the system. He is said to have hauled in $5.7 billion from illicit oil sales and $4.4 billion more in kickbacks, while his partners skimmed a portion as well, the US General Accounting Office reported in March. Analysts say he used some of the money to buy weapons.

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