UN Oil-for-Food Program Scandal: Why Did it Happen?

As expected, media is getting frenzy on information provided in the interim report by Paul Volcker on corruptions in the UN led Oil-for-Food Program, without investigating fundamental reasons for such a mishap.

First a brief background: After the Gulf war in 1991, primarily the United States (under disguise of UN) imposed economic sanctions on Iraq. Ordinary and majority of Iraqis were already suffering under brutal dictatorial regime of Saddam Hussain for decades. During Gulf war they again had to pay insurmountable price in terms of life and property due to carpet and indiscriminate bombings by Allied forces. Once Allied won the war, they did not touch Saddam, rather left him in tact as a dictator. Further, UN (primarily USA) imposed economic sanctions on Iraq. As a result, ordinary and innocent Iraqis, especially children continued to pay untold price.

Long, perpetual suffering and untold misery especially of children who were dying due to malnutrition, lack of medicine, clean water and proper food brought from sanctions, was no longer tolerated by the Western public. As a result, UN had to devise smart sanction -” Oil-for-Food Program. The Program was implemented in December 1996. In the beginning, Iraq was allowed to sell $2 billion worth of oil every six months. In 1998, the limit was raised to $5.26 billion every six months and then ceiling was removed in December 1999.

Originally, two-thirds of the money raised from the program went to humanitarian programs in Iraq and 30 per cent went to the Compensation Commission, which oversees payment for losses and damage as a result of the 1990 Iraqi invasion of Kuwait. The rest went to covering the costs of the program and of the weapons inspection program. In 2000, the distribution was changed slightly: 72 per cent of revenue going to humanitarian programs, 25 per cent to the Compensation Commission and the rest to administration.

Before the U.S.-led invasion of Iraq in 2003, an estimated 60 per cent of Iraq’s population depended on the food, medicine and humanitarian supplies bought with money from Iraqi oil sales. The program was suspended during the Iraq war, and then ended in November 2003.

In April 2004, internal auditors found UN officials repeatedly overpaid contractors and inadequately monitored the program, resulting accusations of corruption of $73-Billion.

This misuse of oil fund resulted due to the reason that Saddam Hussain was allowed to determine/choose the country and company for selling oil and to buy and import food and medicines.

The most fundamental question is (that no one is asking): why did UN accept these requirements set by Saddam. From the past behaviour of Saddam administration, it was clear that a large portion of revenue would go to his coffer for personal and lavish waste. But the point is if UN would have not accepted Saddam’s requirements, untold sufferings of ordinary Iraqis and children would have continued, for which there was no more appetite in the Western public. But with Saddam’s requirements, at least half of the revenue was expected to be spent on needy ordinary Iraqis. As Sir Jeremy Greenstock, who was the United Kingdom’s ambassador to the UN, said that despite major flaws, the Oil-for-Food program was still worthwhile. It prevented starvation in Iraq.

One understands the UN need to continue the Program, but the question is why did UN senior officials involve in kickbacks and bribery (paid not in cash, but in kind: Saddam allocated x number barrel of oil to chosen people. It included politicians, journalists, diplomats, government and even Vatican officials)? The rational appears to be if the alleged participants would have not share the oil fund, that portion of revenue would also have gone to Saddam’s coffer, not to ordinary Iraqis. The choice before UN participants was to be morally and ethically sublime by saying “no” to Saddam and in the process, further increase the share of Saddam in oil fund. Or to be realistic, take your share and use it in some better humanity purpose.

In fact according to media reports, it appears that many did not spend the loot for their own luxurious consumption, rather were engaged in charity work or humanity need. After all, many of those who are alleged involvement in the scandal are not ordinary employees. They are very senior officials with spectacular record and long history of working for the humanity and global welfare.

There is another aspect to this scandal. World public, especially Muslims and Arabs were against Gulf war. Iraqis were already suffering since decades under the yoke of brutal dictator Saddam Hussain, a war was imposed on them. After the war, people of that region were horrified with economic sanctions on Iraq, while brutal dictator was left untouched. They were somewhat relieved with Oil-for-Food program, expecting at least some of the oil revenue was trickling down to ordinary Iraqis. They knew well that a large portion of the fund would be siphoned off by Saddam’s cronies. But they cared less, as long as ordinary Iraqis benefited with the Program.