Transcript: Rep. Chris Shays on 'FNS'

The following is an excerpt from FOX News Sunday, April 25, 2004.

CHRIS WALLACE, HOST, FOX NEWS SUNDAY: For more on Iraq, including the scandal over the U.N.'s oil-for- food program, we turn now to Congressman Chris Shays, who's just back from Iraq and is leading a House investigation of the U.N. program.

Congressman, welcome. Thanks for coming in today.

U.S. REPRESENTATIVE CHRIS SHAYS, R-CT: Good to be with you.

WALLACE: First, I want to get your reaction to what you just heard. Do you think that Dr. Chalabi is part of the solution in Iraq or part of the problem? And what do you think the U.S. relationship should be with him?

SHAYS: Well, I think we should be very careful with this man. I think he's partly the solution and a significant part of the problem. He's not trusted in Iraq, and yet he's part of the government.

WALLACE: And briefly, I know that you're just back from Iraq. How do you assess the political and military situation there?

SHAYS: Well, we made some big mistakes. I mean, we should have kept the government in place and then routed out the bad folks. We should have left the army in place and gotten rid of the bad folks there.

In order to survive in Iraq, you had to be part of the system. But if you didn't do bad things, why should you be punished?

WALLACE: All right. Let's turn to the big subject we want to talk to you about today, and that's the U.N. oil-for-food program.

SHAYS: Yes.

WALLACE: And let's just remind people exactly what we're talking about. The U.N. set up the oil-for-food program in 1996 to allow Saddam Hussein to buy food and medicine for his people while maintaining overall economic sanctions. But U.S. investigators now say Saddam skimmed more than $10 billion from the program through illegal sales of oil and through bribes and kickbacks. And a member of Iraq's Governing Council says he's seen evidence that Hussein bribed not only foreign governments, but even a U.N. official who was supposed to oversee the program.

All right. Let's start, before we get into the details, with a big picture. When you look at how the U.N. administered this program, how much confidence do you think we should have in the U.N. helping in rebuilding the new Iraq?

SHAYS: Oh, very little confidence. I mean, the bottom line is, we allowed Saddam to run the program. He undersold his oil, so he could get kickbacks. He overbought for commodities, sometimes never getting these commodities, so he could get kickbacks. And we all knew it. And we all knew that almost everyone who participated in the program, the only way you could participate is if you basically were a player.

WALLACE: And what was the U.N.'s role or lack of role in overseeing all this?

SHAYS: Well, their job was to — and the United States was part of it — their job was to make sure it was run honestly. There's accusations that Benon Sevan, the person who actually ran the program, there are documents evidently that show him kind of placing the order, having a transaction, and then completing the order with his name on it. He was in charge.

WALLACE: But what was the U.N. supposed to be doing that they didn't do that allowed all of this money, billions and billions of dollars, to be handed out to various...

SHAYS: It's an easy answer. They were supposed to make sure it was run honestly. They were supposed to make sure that there were no kickbacks, that the people who bought the oil paid a legitimate price, and that the program was run well.

The problem you have in the U.N., though, is, any member can veto looking into it. Any member can veto disclosing information. And so I think they all thought that no one ultimately would find out.

I'll give you an example. The Russians set the oil price. They were supposed to have two other members on that board. When we tried to get other people on the board, they would veto whoever was selected. So they unilaterally got to set the price.

WALLACE: And do we have indications that Russia and other countries, or officials in those countries, benefited from the corruption in this program?

SHAYS: We have information that everyone who participated in this program benefited. The Russians...

WALLACE: What do you mean, everyone?

SHAYS: Everyone who was involved, every middle man had to have a kickback to Saddam. And everyone who sold commodities oversold those commodities. The program worked — you were not a player unless you were giving something to Saddam. I mean, that's what's being alleged, and that's what I believe, and I think that's what the facts will show.

WALLACE: And do we believe, for instance, that these Russian officials who were vetoing other people and keeping control of the oil prices, that they were getting part of the action?

SHAYS: Oh, Russian, the French, the French bank. Americans got 45 percent — almost 45 percent of all the oil. We weren't the middle men there, but we still, in a way, involved.

We know that our best allies, Turkey and Jordan, they were able to survive through these 12 years because of some of the illegalities that took place. We turned, you know, the other way because we wanted them to get some benefit. So we even knew that...

WALLACE: Well, let me ask you about that. Because you keep saying when the whole story is told, that the Americans are not going to look so good in this either. Do you believe that some Americans along the line were involved in...

SHAYS: I don't think Americans got money. I think that we just knew how sick this program was, but we didn't want to upset it. We wanted Iraqis to get food; we wanted them to get medicine; we wanted the sanctions to stay in place; we wanted Jordan and Turkey to survive. And, you know, they had lost a lot of trade with the sanctions, so we tolerated their playing a bit of a game.

WALLACE: The U.N. announced this week that they are going to have an investigation led by former Fed chairman Paul Volcker. Do you trust the U.N. to investigate itself?

SHAYS: I trust Paul Volcker to do a great job. And I trust him to speak out if he's not getting cooperation.

And I believe in my heart of hearts that the U.N. realizes that if they don't clean this up, they're going to just continue to deteriorate in terms of their influence in the world and certainly with the United States.

So the U.N. looks terrible now. It has a way to redeem itself. And the only way is to have a very aggressive investigation and let the chips fall where they may.

WALLACE: Well, let me ask you about your part of that though. How much can Congress do? In fact, will you call the secretary general, Kofi Annan, to testify? Will you call Benon Sevan, the man who was supposedly running the program, to testify?

SHAYS: Well, I mean, we would invite them. But, I mean, to call the secretary general before us, I don't think that it's necessary. I think we can get people below him.

I think that our job is to put enough light on this so the U.N. is forced to deal with it.

WALLACE: Can you subpoena, for instance, Benon Sevan?

SHAYS: We can subpoena Americans. It's a little difficult to subpoena diplomats from other countries.

WALLACE: And is it true that even if they agree to testify, that you couldn't put them under oath?

SHAYS: No. Our committee swears in everyone. We're an investigative committee. But the U.N. has a practice that we can't swear them in. So...

WALLACE: So you're saying they have diplomatic immunity from the truth?

SHAYS: They have diplomatic immunity from being sworn in.

WALLACE: Congressman Shays, thanks so much for helping shed some light on this story that's only going to get bigger as time goes on. We appreciate it. Come back and talk about your investigation.