U.N. OIL BIZ GETS $LIMIER

May 20, 2004 -- WASHINGTON - A secret internal audit found serious irregularities in a business deal tied to the United Nations' oil-for-food program - but top officials in New York ignored the report, it was revealed yesterday. The audit by the world body's Office of Internal Oversight Services in April last year found that the Swiss-based firm Cotecna overcharged the United Nations for its services, violated the terms of its contract, and recommended that the world body seek new bidders for the important private customs service.

Here's an interesting link. From the link:

They have also recently been convicted of bribing senior Third World officials to secure PSI contracts. For example, as we'll see, in the case of Pakistan, a recent Swiss magistrate's decision in a long-fought court case indicates that SGS and Cotecna Inspection SA, two of the industry’s long-time leaders, really did bribe Benazir Bhutto, the former Prime Minister of Pakistan and leading members of her family throughout the 1990s, with the help of major Swiss, American UK, and French banks and a coterie of Swiss lawyers.

In effect, all these "Western" institutions helped to undermine Pakistani democracy and its chances for providing a democratic alternative to Islamic fundamentalism and military dictatorship. In these times, when the cause of Islamic democracy has belatedly become a rallying cry for US foreign policy, this is an important missed opportunity for us to understand.

Despite this dubious track record, the World Bank, the IMF, and the UN have failed to discipline these PSI companies. Indeed, they have often even insisted that developing countries hire them, and have hired several of these companies themselves, to police programs like the World Bank’s “anti-corruption” standards and the UN’s (pre-invasion) Iraqi “food-for-oil” program!

The UN had to know who it was dealing with. Gee, wonder why Toon and Congress didn't put a stop to this.

Here's another link with some Oil For Food info. From the link:

C. United Nations accounts pertaining to the Iraq programme

65. The United Nations accounts pertaining to the Iraq programme are divided into seven separate funds pursuant to paragraph 8 (a) to (g) of Security Council resolution 986 (1995). As at 31 January 2000, $740.8 million had been deposited into the account for phase VII as authorized under resolutions 1281 (1999) and 1284 (1999), bringing the total oil sale since inception to $21,476.5 million. Annex I to the present report shows the allocation of the total oil revenues among the various funds and the corresponding expenditures as at 31 January 2000. Annex II shows the number and value of the letters of credit pertaining to oil proceeds and humanitarian supplies.

Balances with BNP Paribas

66. As at 31 January 2000, the closing balance in the United Nations Iraq account with BNP Paribas was $6.2 billion. A total of $2.3 billion of the balance in the account was segregated for approved and issued letters of credit. Approximately $3.5 billion remains available for the issuance of letters of credit as soon as contracts are approved by the Security Council Committee.

67. Included in the above balance is accrued interest of $211 million earned on the United Nations Iraq account. These funds are being used to purchase additional humanitarian supplies.

68. The concentration of funds in one bank remains an issue of concern, as was brought to the attention of the Committee on 26 January by the United Nations Treasurer. Further, as noted in previous reports, the risk of depending on a single issuer for humanitarian letters of credit is an operational vulnerability.

69. The United Nations Treasurer, in consultation with all concerned, has continued to address the concerns raised regarding the banking arrangements for the programme. As a result, delays between the issuance of Committee approval letters and the opening of letters of credit have been reduced.

III. OBSERVATION AND MONITORING ACTIVITIES

A. Inspection and authentication of humanitarian supplies

70. The inspection and authentication of the arrival of humanitarian supplies pursuant to Security Council resolution 986 (1995) and related resolutions was initiated in February of 1997 by the tendering of a contract to Lloyd's Register, which continued as the inspection agent until the end of January 1999. The authentication process began with the establishment of sites at Trebil, at the border of Jordan, at the seaport of Umm Qasr and at Zakho, on the border of Turkey. A fourth site, Al?Walid, on the Syrian border, was added to accommodate the increase in humanitarian shipments to Iraq. Subsequently, the authentication and inspection contract was awarded to Cotecna Inspection Service SA of Geneva in January 1999; Cotecna is currently the United Nations independent inspection agent for humanitarian supplies.

Sounds like this Lloyd's Register has some 'splainin' to do, too.

Well, the excrement just hit the fan. But first...FNC was just doing a report on Oil For Food. Cotecna has apparently written a letter to Benon Sevan asking to be released from its confidentiality clause so it can co-operate with investiogators. Isn't that nice? But why was Cotecna required to sigh a confidentiality clause for its participation in Oil For Food? Anyway, the F&f crew then got to questioning their correspondent (Jonathan Hunt, Brit accent and glasses?), and Chalabi's name came up. Here's where the feces meets the fan. Apparently, the idea that the raid on Chalabi might be Oil For Fod doc related is gaining currency. And the gang wondered why Bremer has ordered up a new accounting team, and why he seems to be impeding the investigation.

Not good.....

"...the gang wondered why Bremer has ordered up a new accounting team, and why he seems to be impeding the investigation."

I videotaped that segment. Just before they went to the break, I was surprised to hear Brian Kilmead say something that I've believed all along.

He said that it could be that they don't want too much to come out about that Oil for Food program "because they want the UN to help with the transition on June 30th." E.D. [realizing the implication of what he had just said] shot him a look and said, "Oh, no."

I have thought all along that we will use the evidence we have against all those "oil for food" scammers in the UN and elsewhere, as a big stick [read 'blackmail tool'] over their heads to induce them to co-operate with us --- OR ELSE.

That brings me to that raid on Chalabi's home in Baghdad.

We took a lot of records out of his home that, some think, could have something to do with his 'personal investigation' of the oil for food program.

Bremer said that Chalabi didn't have authorization to engage in any such 'investigation'.

Chalabi probably compiled a lot of 'sensitive' records - (as insurance) - they don't want him to have. Since they cut off his monthly funding, maybe he threated to do a "document dump" to the media soon and they had to head him off.

At least that's my take on it.

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