Iraqis Blast U.N. Oil-for-Food Probe Funding

UNITED NATIONS – Iraqi officials are sending a message to the United Nations: "Don't spend our money."

The interim Iraqi government is objecting to U.N. Secretary General Kofi Annan's (search) decision to use money from the troubled Oil-for-Food program to pay for an investigation into the growing scandal surrounding the program.

Annan selected Paul Volcker (search ), the former chairman of the Federal Reserve, to investigate how Saddam was able steal billions from late 1996 until being ousted last year. The budget for the investigation is $30 million, which is coming from Oil-for-Food funds — money Iraqi officials say was only supposed to go to help the Iraqi people.

In a letter dated Nov. 19 to the president of the U.N. Security Council (search) — who this month is U.S. Ambassador John Danforth — the permanent representative from Iraq said the United Nations' 2.2 percent cut it took from Oil-for-Food to pay for its administration, should not now fund Volcker's effort. The letter from Samir S. Sumaidaie said doing so "victimizes the people of Iraq, twice."

"First, if the allegations of abuse prove true, by depriving Iraqis of needed financial resources during a time when they were suffering under a regime of total sanctions aimed directly at the civilian sector in its effect. Second, by requiring the people of Iraq to pay for an investigation into those alleged abuses, at a time when every available dollar should be spent on re-building Iraq's shattered infrastructure and economy," the letter said.

One person who agrees with the Iraqi point is Derek Baldwin, director of the global intelligence firm IBIS. Baldwin said he was hired to help the Volcker investigation but pulled out because of what he described as bureaucratic delays.

"The money to fund the Oil-for-Food investigation, the $30 million, is Iraqi money. It came out of the Iraqi account as I understand it. If that's true and I were Iraqi I'd ask for my money back," Baldwin told FOX News in an interview Monday.

Baldwin said that terrorists killing U.S. troops and murdering innocent Iraqis were being funded by the stash of money Saddam is accused of stealing through the Oil-for-Food program.

"Of course Oil-for-Food is funding the insurgents," Baldwin said. "The country is awash in arms. Those arms were paid for with Oil-for-Food profits. Vast amounts of money have gone into the insurgency from money that was defrauded out of Oil-for-Food."

United Nations officials won't comment on Baldwin's allegations but said his company was a subcontractor that was ultimately not picked to help investigate the program.

As for the Iraqi demand for the money being spent on the probe, a U.N. spokesman said Annan has said he believes the U.N. investigation is an appropriate use of Oil-for-Food funds.

FOX News' Eric Shawn contributed to this report.