Volcker Confident About Oil-for-Food Probe

For the first time since he began his investigation, the man charged with getting to the bottom of the oil-for-food scandal says he has uncovered "serious problems" with the program.

In an interview with FOX News on Wednesday former Federal Reserve Chairman Paul Volcker (search) said that he will be publishing an initial report in about two months, and it will likely be damaging for U.N. officials and many others involved in the oil-for-food program.

"There is a lot of smoke," Volcker said when asked if he feels the oil-for-food program was corrupt. "There are obviously big problems, and we want to see how big they were and why did they happen. Why did all this happen, in some sense, under everybody's noses?"

Volcker said there are a lot of questions that need to be answered regarding the handling of the program.

"If there were bribes, why did the bribes happen, why did the mal-administration happen ... why was money lost? All those are very relevant questions, and I owe the responsibility to deliver the most comprehensive report we can, explaining what happened and why, and what lessons should be drawn from it. That is our responsibility.

"There is enough smoke here, so there is a problem, no doubt about that."

Volcker also said he's concerned that some of the oil-for-food investigations being carried out by lawmakers on Capitol Hill might dilute his ability to get to the truth. For example, Sen. Norm Coleman (search), R-Minn., has served a subpoena on BNP Paribas, the bank that handled billions of dollars of oil-for-food money.

"I think an investigation like this attracts a lot of attention," Volcker said. "A lot of people want to get in. I think potentially, it's damaging to have too many people trying to investigate in a partial way."

Some of the efforts are helpful but others just clog up the system, he said.

"I think there is a legitimate responsibility to go after miscreants," he said, "but cooperation among firms involved in the program can be stymied if politicians issue subpoenas without telling us. But it's their choice, not ours."

As one of those leading the charge to get information from banks and oil companies involved in the scheme, Coleman says he and his colleagues have a duty to act alongside Volcker's investigation.

Volcker said he is optimistic he and his panel will get to the bottom of the oil-for-food program's problems.

"I am confident, if we are permitted to proceed, in an orderly way, that we can get the best explanation of the oil-for-food program, as administered by U.N., that it is possible to get," he said.

"The complete story. That is my expectation."

A three-member panel led by Volcker is investigating the oil-for-food scandal. The panel does not have subpoena authority and will rely instead on voluntary cooperation from governments, U.N. staff, members of Saddam Hussein's former government and current Iraqi leaders.

The panel says it has evidence that dozens of people, including top U.N. officials, took kickbacks from the $67 billion oil-for-food program.

The General Accounting Office (search), the U.S. Congress' investigative arm, estimated in March that the Iraqi government pocketed $5.7 billion by smuggling oil to its neighbors and $4.4 billion by extracting kickbacks on otherwise legitimate contracts.

Under the oil-for-food program, which began in December 1996 and officially ended in November 2003, Saddam's government could sell unlimited quantities of oil provided the money went primarily to buy humanitarian goods and toward reparations to 1991 Gulf War victims.

FOX News' Jonathan Hunt contributed to this report.