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Transcript: Paul Volcker Exclusive Interview

Paul Volcker, the chairman of a committee authorized by U.N. Secretary-General Kofi Annan to investigate the Oil-for-Food program, spoke with FOX News' Eric Shawn. Following is a partial transcript of their conversation:

SHAWN: What's your view on being too soft on Mr. Annan?

VOCKER: We are not meant to be soft or hard we are out to get the facts. And I've said from the beginning our responsibility is to follow the facts wherever they lead and I don't think there should not be and there has not been any question as to if whether the report itself reviewed all the investigative leads in some considerable detail. There shouldn't be any confusion about the fact that the first conclusion was we found no evidence that the secretary-general affirmatively affected the processes. No question about that so far as know. We found no evidence of that. We all agreed that his follow-up was inadequate. The investigation was, to say the least, informal. And that had consequences that were unfortunate.

SHAWN: Do you agree that the report was manipulated?

VOLCKER: No, I don't agree with that at all. There was no manipulation of the report. The Mouselli luncheon, which the secretary-general denies, didn't go directly to the point of whether he knew about Cotecna. He said that the discussion involved activities that he had with Kofi-Annan's son, Kojo, with Iraq and with oil but that's different from the Cotecna bidding, so that testimony didn't go directly to the issue. Its interesting, relevant, we are following the Kojo story as we said in the report, that isn't over yet so that is one of the things we are following up on.

SHAWN: Do you believe or agree that the committee was manipulated by ignoring that?

VOLCKER: Well there was nothing we ignored; everything we saw is in that report. But it does lead to further questions about Kojo's activity, no question about that, but it doesn't directly lead to questions about whether the secretary general knew Cotecna was involved in the bidding process in 1998.

SHAWN: Do you see a conflict of interest with you and Maurice Strong?

VOLCKER: I have an acquaintance with Maurice Strong as many people do over the years but this allegation of a conflict is rather odd. The argument is he was once chief executive of the power corporation and I was once on the advisory board. He was chief executive from 1964 to 1966. That was before Paul Demerie acquired his controlling interest in the power corporation. I was on the advisory board of the power corporation in 1988, 22 years after Maurice Strong was chief executive and I asked about it, they had no business interest with Maurice Strong in their whole ownership of the power corporation. It's a ludicrous stretch. There is no connection.

SHAWN: Do you see how people could think and say there is a conflict of interest?

VOLCKER: Well, when you just say Power Corporation, Power Corporation, but the other allegation is that Power Corporation has an ownership interest in total, which bought oil from Iraq. They acquired that interest after the last meeting that this advisory board, which met seven times, I think since 1997. You just put the names together and you try to make something out of nothing.

SHAWN: So in your view there is no conflict of interest at all?

VOLCKER: No, no. Absolutely no conflict of interest. It doesn't exist.

SHAWN: Do you think you were too soft on him (Kofi-Annan)?

Volcker: What did we say? We say he had no direct influence on the process. And we found no evidence, nobody found any evidence and there is no suspicion. Maybe we'll find something someday. I thought we criticized him rather severely, I would not call that an exoneration.

SHAWN: Do you think your report exonerated Mr. Annan?

VOLCKER: I would not have used that word.

SHAWN: So when Mr. Annan says he was exonerated, you don't agree with that?

VOLCKER: That is not the word I would use. We found no facts that he in effect corrupted the contract with Cotecna. He appears to have been removed from the whole process. We found that he should have been more aggressive and that he was not. The fact of the matter is he was not aggressive in following up and having a more thorough investigation when he found out there was an appearance of a conflict of interest.

SHAWN: Did Mr. Annan have any control over what your investigators saw?

VOLCKER: No, no. We had some question about that. We had full access to material in his office as well as the so-called 38th floor as well as throughout the U.N. There were the computer hard drives...we made a very considerable investment and it is reflected in the report.

One thing that this business has made clear is that if we didn't try to do it objectively it would become known, I think. Even when we do it objectively there are accusations that are made? (Laughing) You can't have that many investigators you cant have the press attention we have without doing it any other way than objectively.

SHAWN: Are you sorry you took the job?

VOLCKER: Occasionally, yes. More than occasionally but we'll see it through. (Laughing)

SHAWN: You may go through the summer? The final point is that this could go on?

VOLCKER: The assumption at this point is, better than 50/50 anyway, that if we can do a good report in the summer and we have followed a number of the outside contractors some of which have been in the news already and followed lines of investigation about Benan Sevan, which is left over from the first report, we'll have to talk somewhat further into Kojo's activities, as we promised.

So there are some lines of investigation as this whole question of Semir Vincent, which we have to follow up on. So, I hope this all comes to gel nicely in the summer but at some point we'll make a report on what we know and it will be pretty comprehensive and whether we stop it there or don't stop it there, we are going to have to go out and get more money and make a decision.