This is a partial transcript of The Big Story With John Gibson, March 18, 2004, that has been edited for clarity.


UNIDENTIFIED MALE: Individuals made money off of it. Corporations made money off of this, and some countries benefited from — for the Oil for Food (search) program.


JOHN GIBSON, HOST: Chris Shays (search) of Connecticut, Congress is investigating the Oil for Food program the United Nations used to run in Iraq. You might be shocked, shocked, to learn that people were lining their own pockets instead of helping the Iraqi people. Heather Nauert is here with the mind- boggling details.

HEATHER NAUERT, FNC CORRESPONDENT: That's right, John. The story is absolutely shocking. According to the U.S. GAO, the government accounting office, Saddam Hussein illegally pocketed at least $10 billion from the Oil for Food program. And the U.N. official who led the program was listed on a document of alleged bribe takers which was found in Iraq's oil ministry.

Now, adding to the scandal, the son of U.N. Secretary General Kofi Annan (search), actually worked for a company that was supposed to make sure that the program wasn't corrupt. The U.N. is now beginning an investigation.

Former "Wall Street Journal" correspondent Claudia Rosett (search) is following the story, and I asked her, was the oil for food program simply a scam? And that's the big question.



NAUERT: How do we know that?

ROSETT: We know that because while there was a core relief program delivering things to the Iraqi people, what it turned into was a massive arrangement of bribes and kickbacks that was fundamentally a giant laundromat for Saddam's oil money, elicit earnings around U.N. sanctions, was a giant kickback setup for what was supposed to be humanitarian goods shipped to the Iraqi people who got actually inferior goods in lesser quantity than you would believe, if you looked at the numbers of the program. What it actually amounted to was giant employment program for the U.N., a tremendous opportunity for graft on behalf of — on the part of Saddam, his business partners...

NAUERT: So who allegedly took bribes here. We know Saddam got kickbacks — according to reports and documents coming forward, but I understand also some people in the international community, including possibly some French politicians, British politicians. Explain that.

ROSETT: A list surfaced from the Iraqi oil ministry naming some 270 individuals alleged to have received promises of oil from Saddam Hussein's regime. The most crucial name on the list is Benon Sevan who ran the United Nations Oil for Food program, who was hired by U.N. Secretary General Kofi Annan to run it for the last six years of its existence, and who in a big piece in the "Wall Street Journal" last week it was documented pretty clearly seems to have been on the take from Saddam Hussein.

NAUERT: Does this potential scandal or brewing scandal explain why France and some other countries would not back the U.S. at the U.N. last year?

ROSETT: It certainly should be factored in. Under the oil for food program via the U.N. Saddam heavily threw business toward crucial members — toward members of the permanent five of the Security Council (search), the veto- wielding numbers — France, Russia, and China. France and Russia especially being the big antagonists of U.S. policy and going into Iraq, and the U.N. to this day is sitting on the actual numbers of the amount of business that went their way. They know it. You and I don't.

NAUERT: So the smoking gun, so to speak, is this list that you mentioned, but not everyone on the list, not every company, every country on this list can be assumed to be a crook.

ROSETT: It hasn't been confirmed yet. What is needed at this point is a genuinely independent investigation. The U.N. will tell you — the U.N. has been saying for years it audits itself.

NAUERT: Can they have a good investigation?

ROSETT: If you have one from outside, if you have a truly independent investigation, possibly initiated by the U.S. government that really looks into what went on with this program. We do have access to the documents. And one question is why the U.S. government has not already raised these questions because strange doings were clearly apparent, including it's not just the list of politicians worldwide who are alleged by this list that pans out the case of the head for the oil for food program to have received something from Saddam. It's also huge kickbacks on the relief contracts. In other words ...

NAUERT: We're going to have to leave it there. Claudia Rosett, thank you very much.

As for Kofi Annan's son, the U.N. says the son resigned before his company ever worked on the oil for food program. But, John, we're going to keep on top of this, quite a story.

GIBSON: That stinks. Heather Nauert, thanks very much. Appreciate it.

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