Martin Walker

Gunning for Kofi

Martin Walker says that the UN oil-for-food scandal is as much about the anger of US nationalists as it is about bribes

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Two of the world’s most impressive spin machines are locked in deadly combat. On the one side is the mob that Hillary Clinton once called ‘the vast right-wing conspiracy’, a bunch of conservative US senators and congressmen, Rupert Murdoch’s Fox News and his New York Post, the Wall Street Journal’s editorial page, and the National Review, all calling for the head of United Nations secretary-general Kofi Annan.

Kofi must go, they thunder, because Saddam Hussein was allowed to trouser over $20 billion in the UN’s oil-for-food scandal which happened on Annan’s watch. This is a serious matter and there is a great deal of blame to go around a large number of people — and the UN administration that Annan runs. But what really offends the nationalist Right is Annan’s wimpish effrontery in calling Bush’s Iraq war ‘illegal in terms of the UN charter’. (In fact this was the fault of the BBC, whose reporter badgered poor Annan into using the word ‘illegal’ — which he now privately regrets.)

On the other side is the huge amorphous mass of the global great and good, all clucking in unison that Kofi Annan is the best UN secretary-general since Dag Hammarskjold — although a list that includes Kurt Waldheim and Boutros Boutros-Ghali is not much competition. Led by Tony Blair and the outgoing and therefore lame-duck US Secretary of State Colin Powell, and reinforced by the governments of China, Russia, Germany and France, the editorial boards of the New York Times and Washington Post and the news bulletins of National Public Radio and the BBC, the international establishment has rallied to Annan as the first African to run the world body, and as the first secretary-general to bring forward thoughtful and even bold plans for UN reform.

Kofi Annan must stay, they all cry, most of them thrilling to the symbolism of a clash between President George Bush, who proudly sports a small American flag on his lapel, and Nobel peace prize laureate Kofi Annan, whose equally well-tailored lapel sports a discreet dove, tastefully wrought in white enamel.

But Bush himself has yet to pronounce on Annan’s fate, which in itself speaks volumes when he is the only head of government of a permanent member of the Security Council to hold his tongue. So far, Bush has said only that the UN must ‘get to the bottom of the matter’ of the oil-for-food scandal, which means that Bush is content for Annan to twist slowly in the wind. His fellow Republicans show no such restraint, with a resolution now before the US Congress that demands that Annan resign. This is backed up by a bill that would enforce the will of Congress by cutting 10 per cent from the US contribution next year, 20 per cent the year after and so on, until the institution comes to heel.

That is fairly mild, in terms of American conservativism. A bill was slipping quietly through the New York state senate last week that would have handed over a small New York city park to the UN for a new office building adjoining the current site at Turtle Bay on Manhattan’s East river. With Murdoch’s Post baying at their heels, the senators balked and suddenly started introducing a new resolution suggesting that the entire UN staff come out with their hands up, surrender the site to some deserving hedge fund company and remove the entire UN operation to Paris.

‘Let the French deal with all the UN diplomats and their unpaid parking tickets,’ said Brooklyn’s Senator Martin Golden. ‘We have a UN here that has a tendency to just ignore us, insult us, be a bad neighbour, and not do what it should do. This guy Kofi Annan could have stood with us in Iraq, decided not to. He oversaw $21 billion being robbed from oil-for-food.’

The worthy Senator Golden, more usually famed for the attention he pays to the potholes of Brooklyn, has summed it up. First Kofi let the White House down. Then he screwed up Saddam’s oil money. The first offence is unforgivable to the Bush administration, but the rest of the world will not make him pay for that. The rest of the world might, however, agree that his head should roll for the second offence, the oil-for-food scandal.

This scandal is a topic of labyrinthine complexity, involving billions of dollars, appalling mismanagement and possibly some serious fraud. Most ominously, because this is at least one part of the affair that ordinary people can comprehend, Annan’s son Kojo has, well into this year, been taking small sums of money, $2,500 a month, from a Swiss company that was meant to be monitoring the oil-for-food deal. Annan did not know that his son was still getting the money until a few days ago, and now admits that this has provoked ‘the perception problem for the UN, or the perception of conflict of interests and wrongdoing’.

All this started 15 years ago, when Saddam Hussein invaded Kuwait. In the four years after his defeat in the first Gulf War, sanctions continued against Iraq until it agreed to meet various UN resolutions. These included accounting for the Kuwaitis who disappeared during Saddam’s 1990–1991 invasion and occupation, restoring the loot from Kuwait, allowing continued inspections to end Iraq’s various WMD programmes and so on. Saddam Hussein was less than forthcoming.

But the sanctions, which were hurting Iraq’s civilian population, became politically very difficult to sustain as Saddam Hussein’s propaganda machine artfully exploited the heart-rending images of starving children and hospitals without drugs. There need have been no such suffering. Saddam was smuggling at least $2 billion a year of oil through Jordan and Turkey and Syria, but nobody wanted to know. The Turks, who had suffered heavily from the closure of the oil pipeline from Iraq, were thought in Washington to deserve the compensation, and Jordan also suffered from the sanctions. So everybody ignored the smuggling, and then the Clinton administration agreed that something had to be done to stop the Iraqi propaganda.

So in 1995 an oil-for-food scheme was devised, under which the UN sold Iraq’s oil and used the money to buy food and medical supplies which were then handed over to Saddam’s government for distribution. This system lasted for over seven years, involved the sale of up to two million barrels a day of Iraqi oil, and, at an average $20 a barrel (those were the days), the total take was $60 to $70 billion.

It has long been known that Saddam was trying to skim some money from this, demanding that tanker owners paid in cash for the right to load the UN-sponsored crude, and trying to shake down the banks and oil trading companies that were handling the sales for the UN. Saddam could do so because the UN accepted that Iraq was still a sovereign nation and could thus choose to whom it sold the oil and from whom it bought food and drugs. The money was paid into a UN escrow account — but there were constant rumours that favoured companies had to pay discreet commissions to Saddam. The UN itself took a total of $1.4 billion in administrative fees.

When Baghdad fell in April last year, the regime’s own paperwork became available and a list emerged of 265 beneficiaries of Saddam Hussein’s generosity in giving out oil vouchers to potentially useful friends. Some of these vouchers were worth millions. Among those listed were Indonesia’s then President Megawati Sukarnoputri; Russia’s Vlad ‘The Mad’ Zhirinovsky; Charles Pasqua, a former French interior minister; and Benon Sevan, a Cypriot who ran the UN’s oil-for-food programme and is listed as having been granted 13 million barrels of oil. All deny any wrongdoing. Moreover, the list itself came from sources close to a man with n o reason to like the UN — Ahmed Chalabi, once Washington’s favorite Iraqi exile and the Bush administration’s initial nominee to run Iraq’s interim government. It is not hard to see that Chalabi and his neoconservative chums in Washington might have an interest in discrediting the UN, and the French and Russians who had helped sustain Saddam’s regime. Chalabi called it ‘the biggest political bribery scandal in history’.

So last April, a British financial adviser to Chalabi named Claude Hankes-Drielsma testified to a Congressional committee of inquiry in Washington that the UN’s oil-for-food program had become Saddam’s ‘convenient vehicle through which he bought support internationally by bribing political parties, companies, journalists and other individuals of influence’.

The talk then was of some $10 billion having gone adrift. Five separate Congressional inquiries have continued throughout the year, and last week the publicity race was won by Senator Norman Coleman, a Republican of Minnesota. He rushed to judgment by claiming that the staff on his wonderfully named Permanent Sub-Committee on Investigations had established that Saddam Hussein had accumulated at least $21.3 billion by fooling the UN sanctions operation and its oil-for-food programme. This sum would include the proceeds from smuggling $2 billion a year for seven years to Turkey and Jordan, with tacit US connivance. So the oil-for-food scam is less gargantuan than it looks in the headlines.

Senator Coleman accordingly demanded that Kofi Annan resign. The leading Democrat on the same committee, Senator Carl Levin, said that shameful things had taken place, but he had yet to see evidence that Annan was in any way responsible. Indeed, a useful analysis by Michael Pan, a researcher at the Center for American Progress, notes that all the trades in the oil-for-food programme had to be approved by a committee of the UN Security Council on which US, British, French, Russian and Chinese officials sat. And they raised no objections, even when UN staff flagged 70 separate transactions as potentially suspicious.

‘Good old Norm — it appears there’s nothing he won’t do for a headline,’ commented Senator Coleman’s home-town newspaper in Minnesota this week. It has a point. Senator Coleman is ‘outraged’ that the UN would not hand over all the evidence that its own internal inquiry into the matter had uncovered, and would not make its staff available for the US Senate committee to interrogate, despite the convention that US officials have diplomatic immunity. But the Americans are equally guilty. The man assigned by Kofi Annan to run the UN’s own inquiry, the former head of the US Central Bank Paul Volcker, an American chosen for his formidable reputation for integrity, complains that the US government is not helping his inquiries. Volcker also points out that his own interim report is coming out in January, so those who want to get to the bottom of the scandal have not long to wait.

But this is not entirely about getting the facts, or even about Kofi Annan. For the American nationalists, it is about taming the only international institution with even the moral authority to make the US pay a price for unilateral decisions like going to war against Iraq. For the internationalists, it is about restraining the White House and promoting the one institution with the prestige to do it — witness the way that Bush’s reliable Tony Blair has rushed to Annan’s defence.

The irony is that Kofi Annan was installed at the UN by the Americans as their trusty when the Clinton administration determined to ditch Boutros Boutros-Ghali. On the whole, Annan has performed to American satisfaction, getting some sound financial reforms through the UN and ditching 350 years of international law on national sovereignty to assert that genocide or extreme wickedness towards one’s own people justifies international intervention. Only last week, Annan issued a historic report of the wise men that swallows the Bush’s administration’s principal argument — that the combination of rogue states, super-terrorists and nuclear weapons is so new and so dangerous that pre-emptive military strikes might be needed.

Annan’s offence was to insist that some fig leaf of a UN mandate from the Security Council must first be obtained. American nationalists reject this as giving France, Russia and China a veto over America’s right to defend itself and its allies against nuclear 9/11s. That is the core of the problem, not Saddam’s $20-odd billion, and why it would be risky to bet that Annan will serve out the remaining two years of his term of office. At least Annan still has a sense of humour. At a gala evening for the UN Correspondents Association last week, Annan began his speech by saying ‘I have resigned ...’ A stunned silence fell over the assembly. Then Annan grinned and continued ‘...resigned myself to having a good time this evening.’ There were cheers and cries of relief, and lots of mobile phones were unobtrusively slipped back into pockets. But it may be Annan’s last agreeable evening for quite some time. Once it gets rolling, Hillary’s ‘vast right-wing conspiracy’ is very hard to stop.