U.N. Official Responds to Oil-for-Food Report

UNITED NATIONS – U.N. Deputy Secretary-General Louise Frechette (search) said the United Nations was unprepared for the mammoth task of providing humanitarian relief for 24 million Iraqis and hoped it would never be given a job like the Oil-for-Food (search) program again.

She said the responsibility was the equivalent of trying to oversee the entire import and export of goods for a medium-size country.

"We certainly have taken pride in the fact that the program has served to feed and provide basic necessities to people and that their own personal faith improved over the life of the program," Frechette said on Tuesday. "But we have also seen that the program has revealed some basic weaknesses in our own internal systems."

She was speaking at a press conference to respond to an interim report by former Federal Reserve Chairman Paul Volcker (search) of his investigation of corruption in the Oil-for-Food program. The report criticized the U.N.'s system of awarding contracts, its failure to follow-up some recommendations from auditors, and its policy of keeping documents from scrutiny by the 191 U.N. member states.

Frechette said some of the weaknesses, especially dealing with contracts, had been addressed before Volcker issued the report on Feb. 3, "but clearly, there were other weaknesses in that system, from which we are learning."

"Personally, I hope to God we never get another oil-for-food program or anything approaching that kind of responsibility, which was tantamount to trying to oversee the entire import-export regime of a country of 24 million people, which was a tall order," she said.

"If ever, God forbid, we were to be given that kind of responsibility in the future, we certainly would go about it differently and we certainly would apply the lessons that we are learning from the exhaustive investigations that are going on at the moment," Frechette said.

In his report, Volcker questioned whether the U.N. Secretariat headed by Secretary-General Kofi Annan (search) had the ability to monitor and follow-up on audit recommendations and criticized the U.N.'s watchdog, the Office of Internal Oversight Services, known as OIOS.

In December, the General Assembly changed procedures so that member states can now request copies of any OIOS audit or investigation, but Frechette said Annan intends to go further and undertake a comprehensive review of "the rules and guidelines pertaining to access to United Nations documentation."

"Right now there is not a very clear set of rules on that issue, and the intention would be to do a comprehensive review and, hopefully, to arrive at a clear set of rules as to what is accessible and what is not, and to bring some clarity and consistency into the practice," she said.

Frechette told reporters she believes Volcker identified "a weakness in our management system that we intend to correct" when he raised the issue of the U.N.'s ability to follow-up on audit recommendations.

In order to ensure that action is taken on recommendations of internal and external audit and oversight bodies, the United Nations is setting up an internal oversight committee that would constantly monitor management responses and implementation, she said.

"We expect to have this committee in place shortly," she said, adding that it would have at least one non-U.N. member "to ensure that we have the benefit of an outsider's view on how well our management teams are doing."

Volcker's report also found "convincing and uncontested evidence" that selection of three U.N. contractors for the Oil-for-Food program — Banque Nationale de Paris, Saybolt Eastern Hemisphere BV, and Lloyd's Register Inspection Limited — did not meet established financial and competitive bidding rules.

Frechette said that the U.N. procurement system "has become more transparent and professional" than it was when those companies were chosen in 1996.

On Tuesday, a U.S. diplomat told the Senate that American officials knew of problems in the U.N. Oil-for-Food program but were concerned international support for Iraqi sanctions could crumble if they insisted on stricter rules.

Patrick Kennedy, deputy ambassador to the United Nations, said the main goal of the United States was to preserve the sanctions, even if they were flawed.

"If we couldn't have a solid wall, then we wanted a screen," Kennedy told the Senate Governmental Affairs investigations subcommittee.