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AP Exclusive: Oil-for-Food Probe Finds Gross Mismanagement in U.N. Compensation Commission
Associated Press ^ | Jul 15, 2005 | Nick Wadhams

Posted on 07/15/2005 6:19:31 PM PDT by Pharmboy

UNITED NATIONS (AP) - Investigators probing the U.N. oil-for-food program have found evidence of "gross mismanagement" and possible corruption by the U.N. agency that oversaw compensation for victims of Iraq's 1990 invasion of Kuwait, Iraq's deputy U.N. ambassador said Friday. Investigators with the Independent Inquiry Committee had been investigating $5 billion in questionable expenditures by the U.N. Compensation Commission for months. It had denied any wrongdoing.

But Fesial al-Istrabadi told The Associated Press that the investigators believe some of the allegations were legitimate, particularly in how the commission handled currency exchange rates with the Iraqi dinar.

"There appear to have been some irregularities that are at the very least gross mismanagement at the level of currency exchange," al-Istrabadi told The Associated Press.

The line of inquiry comes as the probe, led by former Federal Reserve Chairman Paul Volcker, examines whether several other United Nations agencies overcharged Iraq for their work under the oil-for-food program. The committee is considering if the Iraqi government should be compensated.

Those agencies helped implement humanitarian operations in Iraq under oil-for-food, a $64 billion program created in 1996 to alleviate the suffering of ordinary Iraqis caused by U.N. sanctions imposed on Iraq after the Kuwait invasion. It was dismantled in 2003.

The executive director of the probe, Reid Morden, refused to confirm al-Istrabadi's claim but said investigators had long wanted to scrutinize the U.N. Compensation Commission.

"It's a program which so far has submitted itself to very little in the way of transparency," Morden said.

The U.N. Compensation Commission, a subsidiary body of the U.N. Security Council, was founded in 1991, well before oil-for-food. U.N. audits released in January concluded that the commission overpaid various parties more than $5 billion, a claim the commission disputed.

The Volcker committee's first interim report, released in February, described a turf war between the internal U.N. watchdog and the commission, which objected to the watchdog's audits and repeatedly rejected its findings.

For example, the Office of Internal Oversight Services that the commission should pay claims according to the exchange rate at that time of payment. But the commission had decided that payments should be made based on the exchange rate from the time when the losses occurred.

U.N. spokeswoman Marie Okabe said the United Nations would have no comment on the latest allegations until the final Volcker report comes out. It is expected in September.

On July 6, commission spokesman Joe Sills appeared to question the jurisduction of Volcker's team, noting that its mandate is the oil-for-food program.

"I want to say this very, very clearly, the U.N. Compensation Commission has nothing to do with the oil-for-food program," he said.

Al-Istrabadi said Iraq had been following the claims of corruption and wrongdoing by the commission for some time.

The commission announced in late June that it had approved claims worth $52.2 billion and would take no more. Of that, it has disbursed $19.2 billion so far.

Before the U.S.-led war to topple Saddam Hussein, 25 percent of Iraq's oil proceeds were reserved for compensation. But after the invasion ended and oil-for-food was shut down, the Security Council lowered that to 5 percent of oil sales.

During oil-for-food and after, U.N. agencies repeatedly lamented how difficult it was to do business in Iraq at the time. A major problem was the fluctuating dinar, which made it difficult to determine expenses and administrative costs.

Al-Istrabadi said Iraq would demand the return of the money if mismanagement and corruption were proven. He rejected the argument that managing the exchange rates might prove difficult.

"These are supposed to be sophisticated international operators with real responsibility over real people," al-Istrabadi said. "If they weren't up to the task, they should have said so."

At the same time, U.N. investigators have focused on nine U.N. agencies that did humanitarian work during oil-for-food.

Investigators have conducted interviews and collected documents from the agencies over the last several months to learn more about their handling of $482 million they were either advanced or reimbursed for administration costs. The agencies have defended their work.

In its February report, the Independent Inquiry Committee said there had been "little transparency and oversight" of the money advanced to the nine agencies to pay for administration costs.

The nine agencies are the U.N. Development Program, UNESCO, the World Food Program, the Food and Agriculture Program, the World Health Organization, UN Habitat, the U.N. Office for Project Services, the International Telecommunication Union and the U.N. Children's Fund.

"The committee's been there, they've asked lots of questions and we've supplied all the answers and documents that they've asked for," said Christine McNab, spokeswoman for the World Health Organization.


TOPICS: Crime/Corruption; Culture/Society; Extended News; Foreign Affairs; News/Current Events
KEYWORDS: kofi; oilforfood; probe; sevan; un; uncorruption
Ha.
1 posted on 07/15/2005 6:19:33 PM PDT by Pharmboy
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To: Pharmboy

>>>...evidence of "gross mismanagement" and possible corruption by the U.N. agency...

Imagine that. And the sky is blue, the Pope is Catholic, and bears crap in the woods...


2 posted on 07/15/2005 6:21:45 PM PDT by Keith in Iowa (Life's a beach - and Liberals are like the sand that gets in your swimsuit...)
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To: Pharmboy; Lijahsbubbe; dennisw

"Gross mismanagement" and the UN in the same sentence. Not even one single microblip on the shock-o-meter.


3 posted on 07/15/2005 6:22:55 PM PDT by Thinkin' Gal
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To: Keith in Iowa

I dunno, but I cannot help but believe that a large part of the money that goes to the UN buys an awful lot of champagne and caviar. Call me crazy...


4 posted on 07/15/2005 6:24:32 PM PDT by Pharmboy (There is no positive correlation between the ability to write, act, sing or dance and being right)
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To: Thinkin' Gal

For the UN, "gross mismanagement" is a compliment (that is, it's not indictable).


5 posted on 07/15/2005 6:26:13 PM PDT by Pharmboy (There is no positive correlation between the ability to write, act, sing or dance and being right)
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To: Pharmboy

Good God...where has AP BEEN??? FOX NEWS and The Wall Street Journal have been digging and reporting on this for OVER A YEAR...month after month uncovering the ugly facts of the complete corruption of the UN.

AP...ppftttt..


6 posted on 07/15/2005 6:30:53 PM PDT by SE Mom (God Bless those who serve)
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To: Pharmboy

from a slightly different AP article:

Al-Istrabadi said Iraq had been following reports of corruption and wrongdoing by the commission for some time. He said that included reports of claimants approaching the commission and "asking lets say for a dollar and being given two."


http://news.yahoo.com/s/ap/20050716/ap_on_re_us/un_oil_for_food


7 posted on 07/15/2005 6:34:44 PM PDT by james500
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To: Pharmboy

This story has dried up. Even Congress is bored with it. Why the hell hasn't Bush named Bolton to the U.N. by now? He had so many chances to recess appoint him. Bush really missed an opportunity.


8 posted on 07/15/2005 6:39:24 PM PDT by montag813
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To: Pharmboy

do I REALLY have to say it???

9 posted on 07/15/2005 7:32:52 PM PDT by Chode (American Hedonist ©®)
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To: Pharmboy
$5 billion in questionable expenditures

This keeps up, pretty soon they're going to be talking about real money, aren't they? ;)
10 posted on 07/15/2005 7:40:28 PM PDT by Fawnn (Canteen wOOhOO Consultant and CookingWithPam.com person - Faith makes things possible, not easy.)
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To: Pharmboy

Don't forget the child prostitutes for UN "peacekeepers."


11 posted on 07/15/2005 7:54:22 PM PDT by ellery (The true danger is when liberty is nibbled away, for expedience, and by parts. - Edmund Burke)
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To: Pharmboy
Well no shiite.

Us out of the UN-UN out of the US.

12 posted on 07/15/2005 8:08:52 PM PDT by processing please hold (Islam and Christianity do not mix ----9-11 taught us that)
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To: Pharmboy
Don't they ever pick up a paper or listen to Talk Radio or Cable News?

. Claudia Rosett's been writing and talking about the oil-for-food scandal and UN corruption for over a year.

Opinion Journal -- Claudia Rosett archive

She investigates real scandals, unlike the libs, who like to concoct scandals.

13 posted on 07/15/2005 8:14:57 PM PDT by syriacus (To WHICH entity does Joe Wilson pledge allegiance?)
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To: Pharmboy
The committee is considering if the Iraqi government should be compensated.

By whom? The ones who stole it or the ones from whom it was stolen? Most likely us taxpayers whose money goes to the UN.

14 posted on 07/15/2005 8:24:22 PM PDT by Mind-numbed Robot (Not all that needs to be done needs to be done by the government.)
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To: Pharmboy

Corruption X corruption X corruption = UN (say Kofi).


15 posted on 08/02/2005 8:22:28 AM PDT by sandydipper (Less government is best government!)
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To: montag813
Why the hell hasn't Bush named Bolton to the U.N. by now? He had so many chances to recess appoint him. Bush really missed an opportunity.

LOL, just came across this post from last month.

16 posted on 08/02/2005 8:25:59 AM PDT by eyespysomething ("Old Hippies" re-living their activist youth - the first time nostalgia had a body count attached.)
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