Corruption In The United Nations Oil-for-Food Program: Reaching a Consensus on United Nations Reform

The October 31st hearing was the fourth hearing the Permanent Subcommittee on Investigations  held on the United Nations’ Oil-for-Food Program (“OFF Program”). The Subcommittee’s first hearing on the OFF Program laid the foundation for future hearings by describing how the OFF Program was exploited by Saddam Hussein. A second hearing examined the operations of the independent inspection agents retained by the United Nations in the OFF Program and examined issues related to inadequate management, audit, and procurement oversight. The hearing also examined issues related to why the U.S. and U.N. did not interfere with Iraq’s open exports of oil to Jordan and Turkey, in violation of U.N. sanctions. The Subcommittee’s third hearing detailed how Saddam Hussein manipulated the OFF Program to win influence and reward friends in order to undermine sanctions. In particular, the hearing presented evidence detailing how Saddam rewarded foreign officials with lucrative oil allocations that could be converted to money. The hearing also examined the illegal surcharges paid on Iraqi oil sales, using examples involving the recently indicted U.S. company, Bayoil. In addition, more detailed information was provided on the nature and extent of the 2003 Khor al-Amaya incident in which oil tankers loaded a large amount of Iraqi oil circumventing U.N. sanctions. The Subcommittee’s October 31st hearing addressed: (1) the findings of the Subcommittee’s October 25, 2005, Oil-for-Food Program Report covering illegal payments to individuals; (2) the findings of the October 27, 2005 final report of the Volcker Independent Inquiry Committee (IIC) on the United Nations Oil-for Food Program; (3) a Government Accountability Office (GAO) status report on two Subcommittee requested investigations of the United Nations Office of Internal Oversight Services (OIOS) and the United Nations Procurement System; (4) the findings of a supplemental Minority report on Bayoil oil diversions; and (5) progress toward implementing United Nations management reforms resulting from the September 2005 UN Summit on Reform. The hearing also examined the oversight by the U.S. Office of Foreign Assets Control (OFAC) to stop misconduct by U.S. persons doing business under the OFF Program.

The following 2 Subcommittee Staff Reports were issued in conjuction with this hearing.  All reports are available in the final Printed Hearing Record which can be accessed via the link at top left of this webpage.

Report Concerning the Testimony of George Galloway Before the Permanent Subcommittee on Investigations (Report of the PSI Majority Staff – Report appears on p. 126 of the October 31, 2005  hearing record.)

Bayoil Diversions of Iraqi Oil and Related Oversight Failures (Report of the PSI Minority Staff – Report appears on p. 396 of the October 31, 2005 hearing record.)