Oil for What?

The Iraqi oil-for-food scandal has proven to be the very epitome of UN ineptitude.

Everyone wants to live in a peaceful society—but keeping the peace is not easy. During the 20th century, worldwide organizations were formed in the hope that war would be halted.

Consider the United Nations. It was established as an institution of honor, its mission one of peace, one that was to bring real hope to the world’s poor and hungry—a model of government carried out properly that students in cities around the world could emulate with pride.

At least, that’s what it was supposed to be. In reality, the United Nations has a history of ineptitude that reached its peak this year in a scandal involving the now-defunct oil-for-food program that amounted to billions of dollars in graft and corruption at the highest levels of the organization. The Iraqi official in charge of auditing the scandal is now dead, courtesy of a bomb strapped to his car. Evidence indicates the UN may have in the process even unwittingly supported al Qaeda.

Oil for Food

After the 1990 Gulf War, sanctions against Iraq restricted international trade. Although these sanctions did not prevent the import of food and medicine, the Iraqi people did not have the money to purchase what they needed under then-President Saddam Hussein’s rule. The oil-for-food program began in 1996 as a humanitarian effort to feed the Iraqi people. It was entirely unique, being the first UN humanitarian program ever to be financed by the resources of those it was serving; it was funded entirely by the sale of Iraqi oil. This was a laudable idea loaded with potential. The Iraqi people were in genuine need of humanitarian aid, and oil-for-food was a way of providing that aid without drawing on the resources of other countries.

It also, however, tightened Saddam’s grip on the Iraqi people. The UN said that 60 percent of the Iraqi population was receiving rations through this program; in other words, 60 percent of the population was now dependent on Saddam just to have enough to eat. The only commodity that could be exported or imported legally was oil, which was solely controlled by Saddam. This also meant that the UN itself was on Saddam Hussein’s payroll to the tune of billions of dollars because the UN collected a commission on every barrel of oil sold. Many countries were receiving Iraqi oil at discount prices through this program—not surprisingly, some of the same countries that opposed the war on Iraq so vehemently. So the result of oil-for-food was that the Iraqi people became even more dependent on Saddam, a tyrant whom the UN was helping to fund; meanwhile, the world community received oil at bargain prices while indebting themselves to Saddam. As humanitarian programs go, this one was questionable at best, even if the program had been run properly. But the structural setup, unfortunately, left the door wide open for corruption on a massive scale.

Things Fall Apart

First of all, while the UN may have started oil-for-food, Saddam Hussein was allowed to run it himself. He picked his own clients and handled distribution; beginning in 1998, records of all transactions were kept secret, a change that was implemented by Benon Sevan, the UN official serving as executive director of the program, reporting directly to Kofi Annan.

Also, evidence suggests that in 1998, Sevan himself may have begun receiving gifts of oil from Saddam personally through a Panamanian firm. Saddam threw the UN weapons inspectors out of Iraq that year. Meanwhile, the cap for oil-for-food was raised from $4 billion to $10 billion a year. The limit was set aside altogether in 1999.

Saddam was also pocketing money outside of the bounds of the program: “Saddam would sell at below-market prices to his hand-picked customers—the Russians and the French were special favorites—and they could then sell the oil to third parties at a fat profit. Part of this profit they would keep, part they would kick back to Saddam as a ‘surcharge,’ paid into bank accounts outside the UN program, in violation of UN sanctions” (Commentary, May 1). Saddam also demanded, over UN objections, an extra 50-cent premium on every barrel. Complaints about kickbacks were buried by Sevan. Although the U.S. and the UK objected to the kickbacks, Sevan stated that he had “no mandate” to stop it (ibid.).

“… Saddam extracted, by conservative estimates of the General Accounting Office, at least $4.4 billion in graft, plus an additional $5.7 billion on oil smuggled out of Iraq. Meanwhile, Mr. Annan’s Secretariat shrugged and rang up its $1.4 billion in Iraqi oil commissions for supervising the program. Worse, the gao notes that anywhere from $10 billion to as much as $40 billion may have been socked away in secret by Saddam’s regime. The assumption so far has been that most of the illicit money flowed back to Saddam in the form of fancy goods and illicit arms” (Wall Street Journal, April 28). Considering the billions of dollars involved, this may have actually been the biggest swindle in history.

Perhaps most disturbing of all is that it may not be possible to trace where the money went. The UN, for instance, authorized Saddam to sell oil to at least 70 companies in the United Arab Emirates. “One authorized oil buyer … was a remnant of the defunct global criminal bank, bcci. Another was close to the Taliban while Osama bin Laden was on the rise in Afghanistan; a third was linked to a bank in the Bahamas involved in al Qaeda’s financial network; a fourth had a close connection to one of Saddam’s would-be nuclear-bomb makers” (ibid.). In other words, this wasn’t just about financing Saddam; it financed other terrorists as well. The idea that a humanitarian program has ties to a global network of terror financially administered by Saddam Hussein with the complicity of UN officials should have been a top news story! But when the evidence began surfacing in April, it was quickly overshadowed by the Abu Ghraib prison scandal.

UN Responsibility

Stealing money from a welfare program ranks pretty low on Saddam’s list of crimes. It can hardly be surprising that someone with his history of murder and terrorism would manipulate a humanitarian program. Nevertheless, UN officials let him oversee himself and clearly provided little external oversight. While many may be angered at how much money he was able to take through oil-for-food, the real story cannot possibly be about Saddam. Everyone knew full well that he was quite mad.

The question is, who gives a self-seeking tyrant $100 billion to conduct a humanitarian program? Answer: Only the United Nations.

A three-member panel led by Paul Volcker, the former U.S. Federal Reserve chairman, has said it has evidence that dozens of people, including top UN officials, took kickbacks from the oil-for-food program (Fox News Network, June 28). Secretary Annan himself has been implicated in the scandal. There was even one company that hired Annan’s son Kojo as it prepared to bid for an oil-for-food contract (Fox News Network, May 19).

“A UN spokesman says all the internal audit reports on oil-for-food have now been turned over to the UN-authorized inquiry headed by former Fed Chairman Paul Volcker. But under terms drawn up by Mr. Annan, Mr. Volcker not only lacks the power of subpoena, but must submit his own report directly to Mr. Annan. And guess who has the final say over what we get to see—or not see. Why, Mr. Annan, of course” (Wall Street Journal, May 19).

The United Nations opposed the war in Iraq despite Saddam violating UN resolution after UN resolution. Germany, France and Russia were heavily involved in oil-for-food—and all opposed the war in Iraq. Even though that wasn’t the only factor involved, it’s impossible to ignore the obvious conflict of interests.

In the Commentary article quoted above, Claudia Rosett asked at what point the UN became complicit in Saddam’s activities. Some certainly were aware of what was occurring from early on. She pointed out that oil-for-food didn’t leave with the weapons inspectors, that reports of kickbacks were dismissed, and that Kofi Annan, the secretary general himself, personally signed off on projects “furnishing Saddam with luxury cars, stadiums and office equipment” before lobbying against the Iraq war along with other clients of Saddam. “We are left to contemplate a UN system that has engendered a secretary general either so dishonest that he should be dismissed or so incompetent that he is truly dangerous—and should be dismissed.”

In other words, this scandal isn’t exactly a big secret, but in terms of rooting out the problem in the UN, nothing has been accomplished.

A Flawed Institution

Such inefficacy has been a hallmark of the UN over the years. Why?

Simply because the UN, while supposedly accountable to everyone, is in reality accountable to no one.

The UN was founded to maintain peace after World War ii, or “to save succeeding generations from the scourge of war,” as the UN Charter puts it. While there has not been another world war since its founding, there has been war all over the world—more than 250 armed conflicts since 1945!

Clearly, the UN cannot bring peace. Its failure largely lies in its inability to enforce resolutions. The entire world watched as Saddam ignored resolution after resolution with no end in sight until the U.S. finally took matters into its own hands, also ignoring the UN. Had the U.S. not intervened, the UN would probably still be “punishing” Iraq through strongly worded resolutions—and with billions of dollars through the humanitarian program known as oil-for-food.

How many times would you allow a security service to fail in protecting your home before you found a new one?

And now, when it is time to inspect the damage from the biggest con job in history, the Iraqi in charge of running one of the investigations is blown up!

The amazing thing is that the United States, as the clear loser in this situation, hasn’t raised more of a stink about it. Not surprisingly, there were no U.S. customers on Saddam’s hand-picked customer list. One would think the obvious implication that other nations opposed the Iraq war because they were benefiting from oil-for-food in both legal and illegal ways would outrage U.S. leaders. Yet, the U.S. continues to provide funding to the UN while receiving little in return. This is a clear example showing that the U.S. has had the pride of its power broken (Leviticus 26:19).

Recognized and respected by leaders around the world, Herbert W. Armstrong attended the San Francisco Conference in 1945 at which the UN was formed. Mr. Armstrong wrote that at this conference, he heard chiefs of state “ring out the warning that this was the world’s last chance.” He went on to write, in his booklet The Wonderful World Tomorrow—What It Will Be Like, “But it has failed. The United Nations has no power over the nations. It has no power to settle disputes, stop wars or prevent wars. … Man has failed his last chance! Now God must step in—or we perish!” (Contact us to request your free copy of this booklet, which shows the solution to the UN’s inadequacy.)

By now, the problem should be obvious: Mankind simply cannot rule itself! The choices that even the highest leaders make are generally based on greed and a way of life that cannot bring peace or happiness. The UN, built on a mandate of peace, is still at its core deceitful, greedy, and crippled by the evil influence of by human nature. “The heart of man is deceitful above all things, and desperately wicked …” (Jeremiah 17:9). The UN might be designed to keep the peace between national governments as an international authority, but how sickening its failure is! What a powerful demonstration of the complete inability of man to rule successfully over man.

As Mr. Armstrong said, “God must step in—or we perish!”