NCPA - National Center for Policy Analysis

Oil For Food -- and Boats, Sport Supplies, Detergent

April 18, 2003

The call by U. N. Secretary General Kofi Annan to extend the oil-for-food program after economic sanctions are lifted against Iraq is controversial. Sanctions expire May 12, but there are questions about resuming the relief effort because of the secrecy surrounding administration of the program and its $12 billion bank account.

The U.N. program collects 2.2 percent on every barrel of Iraqi oil to cover administrative costs -- more than $1 billion since the program's inception in 1996. It employs 4,000. Despite its humanitarian mission, however, there are serious questions about U.N. oversight:

  • All contracts should be approved by the Security Council, but have tilted heavily toward Saddam Hussein's favored trading partners -- Russia, France and Syria.
  • Shipments under Annan's direct authority have included "boats and accessories" from France, "sport supplies" from Lebanon and "detergent" from Libya, Syria, Algeria, Lebanon, Yemen and Sudan.
  • Annan directly approved a request for broadcasting equipment from Russia, Jordan and France.

Secrecy surrounding the shipment of "relief" goods and the financial administration of the program has spawned suspicions of kickbacks, political back-scratching and smuggling.

  • Annan's office shares detailed records with Security Council members, but none of the countries make them public.
  • There is no independent, external audit of the program; financial oversight revolves among three member nations -- South Africa, the Philippines and France.
  • Kurdish leaders are entitled to 13 percent of program revenues, but cannot find out how much they are owed because U.N. officials won't give them access to program records.

Gen. Tommy Franks has derisively referred to the oil-for-food program as the "oil-for-palace" program. Lifting economic sanctions will strip the U.N. of its leverage in Iraq, but before extending the oil-for-food program, a lot of questions must be answered.

Source: Claudia Rosett, "Oil, Food and a Whole Lot of Questions," New York Times, April 18, 2003.


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