Oil-for-Food a Failure From the Start?

Richard Spertzel (search) knew from the start that danger lurked in the U.N. Oil-for-Food program.

Spertzel isn't another lawmaker complaining about the multibillion-dollar program. Nor is he a notable critic of all things tied to the United Nations. A recognized expert in biological warfare and bio-terrorism, Spertzel was a U.N. weapons inspector working in Iraq to monitor Saddam Hussein's (search) government.

"I went to the U.N. as a die-hard supporter of that organization. I left as one of its most outspoken critics," Spertzel told FOX News. With an education that includes three advanced biology degrees, he's also worked with numerous U.S. agencies, including the State Department and CIA.

Spertzel led the U.N. biological weapons inspection team in Iraq after the first Gulf War, allowing him to get a closer look at the Oil-for-Food (search) program. Although he said his team used to joke about the program in Baghdad and said the Oil-for-Food team was a joke among United Nations Special Commission inspectors, they soon realized that it was no laughing matter.

"The Oil-for-Food people spent most of their time in the cafeteria, as opposed to being out in the field making sure that the material was going to the locations that it was supposed to," Spertzel said. "It was such common knowledge it had to be known."

In an arrangement negotiated by U.N. Secretary-General Kofi Annan (search), the United Nations collected 2.2 percent of every oil sale — totaling $1.4 billion in all — to ensure Oil-for-Food was on the up-and-up. Instead, Saddam stole billions, collecting kickbacks from oil buyers and dishonest aid suppliers who often stuck the Iraqi people with third-rate food and medicine that was unfit for human consumption.

This is all enough to make Abdul Wadood Al-Talibi (search), an Iraqi health official, ill.

"This is a sickening problem," Al-Talibi said.

Al-Talibi told FOX News of shipments of spoiled food, expired medicine and useless equipment that apparently were never checked by the U.N.'s Oil-for-Food team in Iraq.

"The U.N., they are telling me that they don't know. I don't buy that," Al -Talibi said. "When it comes to the millions of Iraqi money, and they don't know? God forgive them."

Richard Williamson, who served as the U.S. deputy ambassador to the United Nations during much of the program's run, said Annan was concerned about the stories of deprivation of many Iraqis and thought sanctions that were in place after the 1991 war were, in part, causing that.

"I think history shows that a lot of that deprivation was a result of Saddam Hussein taking his country's wealth before Oil-for-Food and after Oil-for-Food to build his palaces, to pay for his personal guard, to pay for his torture chambers, in other words, to, for the instruments that helped him stay in power," Williamson said.

Spertzel's main concern at the time was that Saddam could be re-arming if the Oil-for-Food inspectors weren't paying attention. That's why weapons inspectors tried to take it upon themselves — rather than leaving it up to the Oil-for-Food team — to make sure any shipments that might have military applications didn't end up with Saddam's military.

"Our resident inspection team was tasked with basically doing the work that should have been done by the Oil-for-Food people," Spertzel said.

Bolstered by the increases in Oil-for-Food revenues that Annan negotiated, Saddam booted the weapons inspectors out of the country in 1998. Oil-for-Food became, increasingly, "Oil-for-Arms."

"Saddam was using ... some of the Oil-for-Food money, basically to re-stock," Spertzel said, adding that the money the United Nations was supposed to be controlling and overseeing was being "siphoned off" by the former Iraqi dictator so he could buy weapons.

After Operation Iraqi Freedom — the second Gulf War waged in 2003 — Spertzel returned to Iraq as part of the CIA's Iraqi Survey Group (search), led by former U.N. weapons inspector David Kay, then later by Charles Duelfer. The group was sent to determine what happened to the weapons of mass destruction Saddam admitted he had years ago, which he used to gas his own people, the Kurds.

CIA investigators recovered no stockpiles of weapons of mass destruction. But it was only part of the story.

"Baghdad exploited the mechanism for executing the Oil-for-Food program," Duelfer said.

Getting much less attention was the Duelfer report's lengthy and detailed analysis of how Oil-for-Food gave Saddam the resources and opportunity to re-arm with the help of foreign governments. Romania, North Korea, Belarus and even U.N. Security Council members like Russia and France were just some of the countries that sold Saddam everything from military spare parts to surface-to-air missile launchers.

Also under the guise of Oil-for-Food, Saddam was able to build underground bunkers so hardened that even dozens of missile strikes to palaces above them didn't do much damage.

The Iraqi Survey Group also found that supposed "humanitarian" imports under Oil-for-Food gave Saddam the ability to restart his biological and chemical warfare programs at a moment's notice. Spertzel said what scared him the most in Iraq was the discovery of secret labs to make deadly weapons like the nerve agent, sarin, and the biological poison, ricin, in spray form.

"If that were released in a closed [area], such as Madison Square Garden or, even some, some of your smaller closed malls, shopping malls, it would have a devastating effect … killing hundreds or thousands," Spertzel said.

But Spertzel believes Saddam was cooking up an even more sinister plan — putting the poisons on department store shelves across the United States and Europe. He said that plan was "actively pursued" as late as March 2003. And that plan was at least, in part, funded by Saddam's corrupt Oil-for-Food activities.

"Some of the photographs that were obtained from this same laboratory had multiple different shapes of glass spray bottles, perfume spray bottles — presumably to mimic different brand names," Spertzel said. "Can you imagine somebody going into Macy's department store and spray a little bit of a perfume to see whether they like the scent, only instead of perfume they're getting a face full of sarin?

"That would kill within, within a few minutes. If this were to appear at a couple different locations, imagine the economic impact in the U.S. — people would be afraid to buy anything."

Spertzel said the United Nations and the secretary-general could have done more to stop Saddam from acquiring deadly weapons and to oversee the program more efficiently.

"The two are tied together," he said. "They let the world down. No question about that."

FOX News' Jonathan Hunt, Per Carlson, Brian Gaffney, George Russell, Grace Cutler and Betsy Petrick contributed to this report.