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01-15-2005, 03:35 PM
http://www.newsday.com/news/local/state/ny-bc-ny--oil-for-foodinves0114jan14,0,2323875.story?coll=ny-region-apnewyork
Oil-for-food investigators probing independence of U.N. internal auditors
By DESMOND BUTLER
Associated Press Writer
January 14, 2005, 8:48 PM EST
NEW YORK -- Investigators probing allegations that administrators at the U.N. oil-for-food program for Iraq took bribes and allowed Saddam Hussein to skim money from the program are raising concerns that U.N. officials discouraged internal auditors from focusing on the program's central office.
On Sunday, an independent committee looking into the allegations released more than 50 audits of the program carried out by the United Nation's internal watchdog. The audits detail how U.N. agencies working under the oil-for-food program allegedly squandered millions of dollars through suspect overpayment to contractors, mismanagement of purchasing and assets, and fraud by its employees.
But the committee said auditors neglected the oil and humanitarian supplies contracts and transactions through the program's account at the French bank BNP Paribas. Investigators say Saddam Hussein's government used its control over contracting to corrupt the program, which allowed Iraq to sell a limited amount of oil in exemption from sanctions to purchase humanitarian goods.
In a briefing paper that accompanied the release of the audits, the committee led by former Fed Chairman Paul Volcker questioned why the auditors neglected the New York headquarters of the Office of the Iraq Program (OIP), which oversaw the $60 billion program.
Investigators have tried to determine the accuracy of Iraqi oil ministry documents, which indicated that the program's director, Benon Sevan, allegedly accepted oil allocations as bribes.
Volcker's committee reported in its paper that the auditors interviewed by its investigators suggested Sevan's office influenced their decisions. The auditors said they viewed auditing U.N. operations in Iraq as the best use of scarce resources.
"They also noted that the advice of OIP management was to emphasize scrutiny of activities in Iraq," the paper states, referring to Sevan's office.
Congressional investigators said they expect the committee will determine whether the role the head office played regarding the audits when the panel releases an expected preliminary report at the end of this month.
"The House International Relations Committee is interested in learning who, if anyone, limited the scope of the audits to bar reviews of UN Headquarters, oil surcharges, contract kickbacks, and the U.N.'s French bank, BNP," the committee said in a statement issued to The Associated Press Friday.
The Volcker committee's paper said that the New York office spent nearly $400 million on administrative costs during the program, which ran for seven years from 1996 to 2003 and was responsible for approving contracts.
"There were no examinations of the oil and humanitarian contracts by IAD during the OFFP," the committee wrote, referring to the Internal Audit Division of the U.N. and the oil-for-food program.
"Oil contracts were not examined with an eye to the enforcement of contract requirements, despite the fact that U.N. officials had contract-approval responsibilities," the panel said.
The paper said a closer monitoring of the contracts could have prevented much of the Iraqi government's success in subverting the program.
A U.N. spokesman, Stephane Dujarric, deferred questions about the auditors' decisions, saying the United Nations is awaiting the committee's determination.
The committee said in the paper that it would critique the auditors' work in its preliminary report later this month.
Oil-for-food investigators probing independence of U.N. internal auditors
By DESMOND BUTLER
Associated Press Writer
January 14, 2005, 8:48 PM EST
NEW YORK -- Investigators probing allegations that administrators at the U.N. oil-for-food program for Iraq took bribes and allowed Saddam Hussein to skim money from the program are raising concerns that U.N. officials discouraged internal auditors from focusing on the program's central office.
On Sunday, an independent committee looking into the allegations released more than 50 audits of the program carried out by the United Nation's internal watchdog. The audits detail how U.N. agencies working under the oil-for-food program allegedly squandered millions of dollars through suspect overpayment to contractors, mismanagement of purchasing and assets, and fraud by its employees.
But the committee said auditors neglected the oil and humanitarian supplies contracts and transactions through the program's account at the French bank BNP Paribas. Investigators say Saddam Hussein's government used its control over contracting to corrupt the program, which allowed Iraq to sell a limited amount of oil in exemption from sanctions to purchase humanitarian goods.
In a briefing paper that accompanied the release of the audits, the committee led by former Fed Chairman Paul Volcker questioned why the auditors neglected the New York headquarters of the Office of the Iraq Program (OIP), which oversaw the $60 billion program.
Investigators have tried to determine the accuracy of Iraqi oil ministry documents, which indicated that the program's director, Benon Sevan, allegedly accepted oil allocations as bribes.
Volcker's committee reported in its paper that the auditors interviewed by its investigators suggested Sevan's office influenced their decisions. The auditors said they viewed auditing U.N. operations in Iraq as the best use of scarce resources.
"They also noted that the advice of OIP management was to emphasize scrutiny of activities in Iraq," the paper states, referring to Sevan's office.
Congressional investigators said they expect the committee will determine whether the role the head office played regarding the audits when the panel releases an expected preliminary report at the end of this month.
"The House International Relations Committee is interested in learning who, if anyone, limited the scope of the audits to bar reviews of UN Headquarters, oil surcharges, contract kickbacks, and the U.N.'s French bank, BNP," the committee said in a statement issued to The Associated Press Friday.
The Volcker committee's paper said that the New York office spent nearly $400 million on administrative costs during the program, which ran for seven years from 1996 to 2003 and was responsible for approving contracts.
"There were no examinations of the oil and humanitarian contracts by IAD during the OFFP," the committee wrote, referring to the Internal Audit Division of the U.N. and the oil-for-food program.
"Oil contracts were not examined with an eye to the enforcement of contract requirements, despite the fact that U.N. officials had contract-approval responsibilities," the panel said.
The paper said a closer monitoring of the contracts could have prevented much of the Iraqi government's success in subverting the program.
A U.N. spokesman, Stephane Dujarric, deferred questions about the auditors' decisions, saying the United Nations is awaiting the committee's determination.
The committee said in the paper that it would critique the auditors' work in its preliminary report later this month.