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Thursday, October 27, 2005

UN Oil for Food Coverage

Galloway's Wife - 4,500 Possible Defendants
Days after a US Senate committee tracked a $150,000 (£84,000) payment to the MP’s now estranged Palestinian wife, the UN inquiry reported that Amina Naji Abu Zayyad had earlier received a series of transfers totalling $120,000.

The revelation increases the pressure on the vocal anti-war politician, whom the report says was nicknamed “Abu Mariam” by the Iraqis, a reference to his anti-sanctions campaign, the Mariam Appeal.

The Respect MP for Bethnal Green and Bow already faces a parliamentary ethics inquiry and possible criminal charges for making “false or misleading” statements during his celebrated confrontation with US Senators in May.

The new details of Mr Galloway’s alleged involvement in the oil-for-food scandal were contained in a 620-page report issued at the end of an 18-month UN inquiry by a panel led by Paul Volcker, a former chairman of the US Federal Reserve.

The report also contained details of an unexplained payment of 20,000 Swiss francs (£8,800) to the son of Kofi Annan, the UN Secretary- General. And Jean-Bernard Merimée, France’s former UN Ambassador, admitted receiving $165,725 in commissions on an Iraqi oil sale in January 2002 while serving as a special adviser to Mr Annan.

M Merrimée told investigators that Tariq Aziz, Iraq’s former Deputy Prime Minister, had offered him the commissions because he was a “fair negotiator” as Paris’s UN envoy in setting up the oil-for-food system in the mid-1990s.

The report found that Marc Rich & Co financed oil purchases from Iraq and the associated kickbacks for the son of a French MP shortly after the company’s founder received a controversial pardon from President Clinton.

In all, about half the 4,500 companies that bought oil or supplied humanitarian goods under the UN scheme are suspected of having paid illegal kickbacks to the Saddam Hussein government. But only one oil company and 26 humanitarian suppliers actually admitted doing so.

BBC: More than 2,000 companies
More than 2,000 firms linked to the UN oil-for-food programme in Iraq were involved in making illicit payments to the Iraqi government, a report says.
It found Saddam Hussein received $1.8bn (£1bn) from firms including Daimler Chrysler and Volvo, and it also named individuals said to have benefited.

Some of those issued denials or declined to comment at this stage.

The UN report said the firms would not necessarily have known about the bribes and surcharges.

Paul Volcker, who led the inquiry, said corruption would not have been so pervasive had there been better discipline by UN management and he emphasised the need for wide-ranging UN reforms.

Claudia Rosett
Business as Usual
Corruption and conflicts of interest at the U.N.

Thursday, October 27, 2005 12:01 a.m. EDT

Few outside U.N. circles have heard of IHC Services, a private company that for years was one of hundreds of firms selling goods and services to the U.N. As a rule, the U.N. keeps secret most details of these deals. But scandals involving IHC have begun lifting the lid on how the U.N. handles taxpayers' money.

The IHC story suggests that the U.N.'s failures of governance are not confined to such special projects as the Oil for Food program. If anything, Oil for Food looks more and more like a large outcropping of U.N. business as usual. And as with Oil for Food, which ran from December 1996 until the fall of Saddam in 2003, the timeline of IHC business with the U.N. starts in December 1996. That was the month before Kofi Annan took over as secretary-general, and it is on his watch that the IHC-U.N. tale has unfolded.

Headquartered on the sixth floor of a modest midtown Manhattan high-rise, with additional offices in Milan, IHC was, until this June, one of many companies approved by the U.N. as a registered vendor to its procurement division--which handles U.N. contracting for everything from office supplies to rations for peacekeeping troops. IHC signed some deals directly with the U.N., and on others served as a go-between for third-party contractors--despite the U.N.'s officially stated preference for avoiding middlemen.

Since the U.N. handles its contracts with secrecy, the full extent of IHC's involvement in U.N. business is hard to know. But from documents seen by this writer, the amounts around 1999 involved millions of dollars; a few years later they involved scores of millions; and in the past year or two--counting IHC business partnerships--the totals reached hundreds of millions.
IHC's CEO Ezio Testa, has denied any wrong-doing. But IHC's history includes hiring the son of a U.N. official who later (and unrelated to the hiring) pled guilty to corruption in federal court. In addition, a star U.N. diplomat served as chairman of the IHC board of directors while also holding a post as personal representative of the U.N. secretary-general. On top of that, IHC appears to have had access to valuable inside information on U.N. contract bids, which in at least one documented case it shared with a company involved in the bid.

Last year, information was bubbling around in unofficial quarters that something was amiss in the U.N. procurement department. Together with Fox News executive editor George Russell, I began looking into it. A name that came to our attention was Alexander Yakovlev, a Russian staffer in the procurement department. Imagine our surprise when Mr. Yakovlev was depicted in a Feb. 3 interim report from Paul Volcker's Oil for Food probe as a defender of integrity in the U.N. procurement department, where he'd handled Oil for Food inspection contracts.


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