Sources: Volcker May Be Too Close to U.N.

Several lawmakers are concerned Paul Volcker (search) is too close to the United Nations to carry out a truly objective investigation of the Oil-for-Food program.

"He's more interested in protecting the United Nations than investigating what happened," one congressional source familiar with the investigation told FOX News.

Volcker, who is heading up a U.N.-appointed commission probing the scandal-ridden Oil-for-Food (search) program, was tapped by U.N. Secretary-General Kofi Annan (search). That in itself worried some congressional investigators.

But Volcker's longstanding ties to the international organization and a new revelation uncovered by FOX News have heightened those fears.

The latest news centers on Volcker's relationship with the UNA-USA Business Council, a powerful group that has been highly vocal in its support for the United Nations since news came out that Iraq's Oil-for-Food program was plagued with mismanagement problems and lack of oversight.

Volcker was on the board of directors of the council until last year and hasn't ruled out going back once he concludes his investigation. One congressional source said, "That's really scary."

FOX News has also learned that one of the three biggest financial contributors to the UNA-USA Business Council in 2003 was the French bank BNP Paribas, which handled all Oil-for-Food transactions and is at the center of Volcker's investigation.

Sources on Capitol Hill also expressed concern about playing down the significance of the internal U.N. audits released last week. Before they were made public, Volcker told the New York Times that "there are no flaming red flags in this stuff." But congressional investigators doing their own review of the program found what they called a "forest of red flags."

Those investigators also were furious with Volcker's characterization. "He's trying to minimize his own investigation's findings. That's inappropriate spin. It legitimately brings into question what's his purpose," one investigator told FOX News.

John Danforth, former U.S. ambassador to the United Nations, said he had confidence in Volcker's veracity. "He is a very, very able person who is trying to do an excellent job and will do an excellent job with those tools that are available to him," he said.

Danforth, whose last day on the diplomacy job was Tuesday, had earlier told FOX News that despite Volcker's good intentions, he did not have the tools necessary — such as subpoena power — to effectively investigate the multibillion-dollar program.

A spokeswoman for the Volcker commission, formally known as the Independent Inquiry Committee, would not respond to specific questions asked by FOX News about potential conflicts of interests, saying simply that the panel will let the report speak for itself. That report is due to be released by the end of the month.

Minnesota Sen. Norm Coleman (search) told FOX News on Wednesday he saw signs that the investigation is going in the right direction.

Coleman, a Republican who is leading one of five congressional probes into Oil-for-Food, saw progress with Tuesday's guilty plea by an Iraqi-born American citizen, Samir Vincent (search), to several charges tied to the program. He said Vincent's plea is further proof that former Iraqi dictator Saddam Hussein was illegally bilking millions from the program that was aimed at feeding and clothing Iraqi civilians in his country.

"First it shows that there is some validity to the list we got from the Iraqis that said that Saddam Hussein was bribing people to act as agents of his government … we've got someone now who's pled guilty to doing what our investigators have understood for quite a while now," Coleman said.

When asked if Volcker was the right man to head such a high-profile probe, Coleman had nothing less than personal accolades for the former Federal Reserve chairman, but said he was waiting to see the results of Volcker's investigation.

"I think he has challenges in trying to do what he's going to do, but we'll see. We've gotten some preliminary documents from him so far, which we're pleased to get, but in terms of what he's produced we're waiting to see," Coleman said.

"But there's a lot here in this Oil-for-Food scandal and it's a scandal … I wish Paul Volcker the best. We're certainly willing to work with him. But this is more then just one person, one investigation, to get to the bottom of it."

FOX News' Jonathan Hunt contributed to this report.