The U.N. Oil-For-Food Program: Cash Cow Meets Paper Tiger

Tuesday, October 05, 2004 11:00 AM

Congressman Christopher Shays (CT-4), Chairman of the Subcommittee on National Security, Emerging Threats, and International Relations, will convene an oversight hearing to examine operation and management of the United Nations Oil-for-Food Program in Iraq. The Tuesday, October 5, 2004 hearing will convene at 11:00 am in room 2154 of the Rayburn House Building in Washington, D.C.

Witnesses from the major contractors hired by the U.N. to operate the Oil-for-Food Program will testify.

Authorized in 1995 by UN Resolution 986 with the support of the US, the Oil-for-Food Program began operations in 1996 and finished in late 2003. During the life of the program there were allegations of Iraqi authorities corrupting the program. Since the end of the program, a number of alleged abuses have come to light, including Iraqi-run schemes to sell vouchers to participate in the program, place surcharges on oil sales, increase port and other service fees, and require kickbacks from suppliers of authorized goods. In addition, allegations of negligence and misconduct have been made against UN personnel.

The General Accounting Office (GAO) estimates that the former Iraqi regime extracted more than $5 billion in illegal revenues from unauthorized surcharges on oil sales and kickbacks on commodity purchases. The Defense Contract Audit Agency concluded half of at least 368 of 759 contracts examined were overpriced by at least 5% of the contract value.

“From the outset, this program was structurally vulnerable to manipulation and abuse by Saddam’s regime,” Shays said. “Over time, he learned how to exploit weaknesses in U.N. oversight of the program confident his sympathizers on the Security Council would cynically look the other way.”

Shays said the hearing will examine how U.N. program managers and contractors addressed persistent reports of Oil-for-Food program abuses.

“The U.N. Oil for Food Program: Cash Cow Meets Paper Tiger”

Tuesday, October 5, 2004
11:00 am
2154 Rayburn House Office Building

WITNESS LIST

PANEL ONE

Ambassador Patrick F. Kennedy
United States Representative to the United Nations
for U.N. Management and Reform
U.S. Mission to the U.N.
U.S. Department of State

PANEL TWO

David L. Smith
Director
Corporate Banking Operations
BNP Paribas

Peter W.G. Boks
Managing Director
Saybolt International B.V.

André E. Pruniaux
Senior Vice President
Africa & Middle East
Cotecna Inspection S.A.

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