Committee: U.N. Allowed 'Corrupt Behavior' in Oil-for-Food Program

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A yearlong probe of the Iraq oil-for-food program has concluded that the United Nations (search) allowed "illicit, unethical, and corrupt behavior" to overwhelm the $64 billion operation.

The Independent Inquiry Committee's (search) final report, to be released Wednesday, says the U.N. must adopt sweeping reforms before taking on such tasks again, according to a draft forward. Read the document by clicking here (pdf).

Yet the committee, which is U.N.-appointed and supported, also found that the program succeeded in providing minimal standards of nutrition and health care for millions of Iraqis trying to cope with tough U.N. sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait. It also helped in the international effort to deprive Saddam of weapons of mass destruction, it said.

While the forward doesn't go into detail about U.N. Secretary-General Kofi Annan (search), an official familiar with the committee's final conclusions said it will criticize him, his predecessor Boutros Boutros-Ghali and the U.N. Security Council, especially Russia and France.

Annan's failure to properly manage the $64 billion program will be strongly criticized, but there is no new "smoking gun" linking him to an oil-for-food contract awarded to the Swiss company Cotecna that employed his son Kojo, the official said Monday, speaking on condition of anonymity because the report had not been released.

The new report will criticize Kojo Annan for trading on his father's name in the purchase of a Mercedes, for which he borrowed money from Michael Wilson, a Cotecna executive who is a friend of Kofi and Kojo Annan, the official said.

The final report is expected to detail the inner workings of oil-for-food over more than 700 pages. Volcker's 1,800-word forward speaks more broadly, assigning blame to nearly every branch of the United Nations, from Annan, to the U.N. agencies that did work in Iraq, to its member states and the 15-nation Security Council.

"As the years passed, reports spread of waste, inefficiency, and corruption even within the U.N. itself," inquiry chief Paul Volcker, former chairman of the U.S. Federal Reserve, wrote in a draft forward of the report. "Some was rumor and exaggeration, but much — too much — of it has turned out to be true."

Yet the forward says the United Nations is the only organization in the world with the expertise and authority to handle work like oil-for-food, established in 1996 to help Iraqis suffering under the burden of tough U.N. sanctions imposed after Saddam Hussein's 1990 invasion of Kuwait.

While the forward is critical of U.N. management, and by extension Annan, its overall tone toward him is not entirely critical. Volcker wrote U.N. secretary-generals are not chosen for management skills and they don't have the tools for strong executive oversight.

At the same time, Volcker strongly criticized the U.N. Security Council, which set the oil-for-food program and monitored its work. The 15-nation council, the most powerful decision-making body of the U.N., allowed Iraq too much room in establishing and implementing the program, he said.