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The United Nations Oil-For-Food Program: Issues of Accountability and Transparency

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The United Nations Oil-For-Food Program: Issues of Accountability and Transparency THE UNITED NATIONS OIL-FOR-FOOD PROGRAM: ISSUES OF ACCOUNTABILITY AND TRANSPARENCY HEARING BEFORE THE COMMITTEE ON INTERNATIONAL RELATIONS HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTH CONGRESS SECOND SESSION APRIL 28, 2004 Serial No. 108–110 Printed for the use of the Committee on International Relations ( Available via the World Wide Web: http://www.house.gov/international—relations U.S. GOVERNMENT PRINTING OFFICE 93–391PDF WASHINGTON : 2004 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2250 Mail: Stop SSOP, Washington, DC 20402–0001 VerDate Mar 21 2002 11:37 Jul 22, 2004 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 F:\WORK\FULL\042804\93391.000 HINTREL1 PsN: SHIRL COMMITTEE ON INTERNATIONAL RELATIONS HENRY J. HYDE, Illinois, Chairman JAMES A. LEACH, Iowa TOM LANTOS, California DOUG BEREUTER, Nebraska HOWARD L. BERMAN, California CHRISTOPHER H. SMITH, New Jersey, GARY L. ACKERMAN, New York Vice Chairman ENI F.H. FALEOMAVAEGA, American DAN BURTON, Indiana Samoa ELTON GALLEGLY, California DONALD M. PAYNE, New Jersey ILEANA ROS-LEHTINEN, Florida ROBERT MENENDEZ, New Jersey CASS BALLENGER, North Carolina SHERROD BROWN, Ohio DANA ROHRABACHER, California BRAD SHERMAN, California EDWARD R. ROYCE, California ROBERT WEXLER, Florida PETER T. KING, New York ELIOT L. ENGEL, New York STEVE CHABOT, Ohio WILLIAM D. DELAHUNT, Massachusetts AMO HOUGHTON, New York GREGORY W. MEEKS, New York JOHN M. MCHUGH, New York BARBARA LEE, California ROY BLUNT, Missouri JOSEPH CROWLEY, New York THOMAS G. TANCREDO, Colorado JOSEPH M. HOEFFEL, Pennsylvania RON PAUL, Texas EARL BLUMENAUER, Oregon NICK SMITH, Michigan SHELLEY BERKLEY, Nevada JOSEPH R. PITTS, Pennsylvania GRACE F. NAPOLITANO, California JEFF FLAKE, Arizona ADAM B. SCHIFF, California JO ANN DAVIS, Virginia DIANE E. WATSON, California MARK GREEN, Wisconsin ADAM SMITH, Washington JERRY WELLER, Illinois BETTY MCCOLLUM, Minnesota MIKE PENCE, Indiana BEN CHANDLER, Kentucky THADDEUS G. MCCOTTER, Michigan KATHERINE HARRIS, Florida THOMAS E. MOONEY, SR., Staff Director/General Counsel ROBERT R. KING, Democratic Staff Director JOCK SCHARFEN, Chief Counsel FRANK RECORD, Senior Professional Staff Member GREGG RICKMAN, Senior Professional Staff Member, Subcommittee on the Middle East and Central Asia LIBERTY DUNN, Staff Associate (II) VerDate Mar 21 2002 11:37 Jul 22, 2004 Jkt 000000 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 F:\WORK\FULL\042804\93391.000 HINTREL1 PsN: SHIRL C O N T E N T S Page WITNESSES Howar Ziad, Representative, Kurdistan Regional Government, United Nations Liaison Office ........................................................................................................ 10 Danielle Pletka, Vice President, Foreign and Defense Policy Studies, Amer- ican Enterprise Institute ..................................................................................... 50 John G. Ruggie, Ph.D., Evron and Jeane Kirkpatrick Professor of Inter- national Affairs, and Director, Center for Business and Government, John F. Kennedy School of Government, Harvard University .................................. 55 Claudia Rosett, Senior Fellow, The Foundation for the Defense of Democ- racies ..................................................................................................................... 61 Michael Soussan, Former Program Coordinator, United Nations Oil-for-Food Program ................................................................................................................ 65 Joseph A. Christoff, Director, International Affairs and Trade, U.S. General Accounting Office ................................................................................................. 126 LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING The Honorable Henry J. Hyde, a Representative in Congress from the State of Illinois, and Chairman, Committee on International Relations: Prepared statement .............................................................................................................. 3 Howar Ziad: Prepared statement ........................................................................... 11 Danielle Pletka: Prepared statement ..................................................................... 53 John G. Ruggie, Ph.D.: Prepared statement ......................................................... 57 Claudia Rosett: Prepared statement ...................................................................... 63 Michael Soussan: Prepared statement ................................................................... 68 The Honorable Mike Pence, a Representative in Congress from the State of Indiana: Article by Ms. Claudia Rosett entitled ‘‘Oil for Terror’’ from The Wall Street Journal, April 28, 2004 ............................................................ 90 Claudia Rosett: Material submitted for the record ............................................... 93 Joseph A. Christoff: Prepared statement ............................................................... 128 APPENDIX The Honorable Nick Smith, a Representative in Congress from the State of Michigan: Prepared statement ........................................................................ 169 The Honorable Ron Paul, a Representative in Congress from the State of Texas: Prepared statement .................................................................................. 170 (III) VerDate Mar 21 2002 11:37 Jul 22, 2004 Jkt 000000 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 F:\WORK\FULL\042804\93391.000 HINTREL1 PsN: SHIRL VerDate Mar 21 2002 11:37 Jul 22, 2004 Jkt 000000 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 F:\WORK\FULL\042804\93391.000 HINTREL1 PsN: SHIRL THE UNITED NATIONS OIL-FOR-FOOD PROGRAM: ISSUES OF ACCOUNTABILITY AND TRANSPARENCY WEDNESDAY, APRIL 28, 2004 HOUSE OF REPRESENTATIVES, COMMITTEE ON INTERNATIONAL RELATIONS, Washington, DC. The Committee met, pursuant to call, at 10:30 a.m., in Room 2172, Rayburn House Office Building, Hon. Henry J. Hyde (Chair- man of the Committee) presiding. Chairman HYDE. The Committee will come to order. Many times the Chair has announcements to make, some of which are perfunc- tory, some of which are enormously substantive, and I have one of the latter kind to make. One of our Members who is not here today, and you will under- stand why, Dana Rohrabacher, at 6 o’clock p.m., April 27, his wife Rhonda gave birth to triplets, Annika, Christian and Tristen. So I don’t expect we will hear from Mr. Rohrabacher today, but in absentia we congratulate him and wish him, and especially his wife, well. All right. The Committee will come to order. Of the long list of Saddam Hussein’s crimes, the most relentless were those com- mitted against the Iraqi people. A grim catalog of outrages range from mass killings at one extreme to the needless privation and steady grinding away of hope that formed the context of daily life. The elimination of his regime last year revealed a population ren- dered destitute by 2 decades of dictatorship and the results of the conflicts he initiated against neighboring countries. Unfortunately, efforts by the international community to counter the threat Sad- dam Hussein posed to his neighbors and others unavoidably added to the burden borne by the Iraqi people. In an effort to spare them, especially women and children, from the harshest effects of the em- bargo placed on the regime in the aftermath of Saddam’s invasion of Kuwait, the United Nations initiated a program in 1996 to pro- vide the Iraqi people with food, medicine and other aid. The hu- manitarian relief was to be paid for by monitored sales of Iraqi oil. This undertaking came to be known as the Oil-for-Food Program and is credited correctly with saving the lives of millions. Unfortunately, numerous allegations have been made that this humanitarian program was undermined by systematic abuse, in- cluding graft and outright theft, that is estimated in the billions of dollars. The latest and most authoritative report is that released by the General Accounting Office. It estimates that between 1997 and (1) VerDate Mar 21 2002 11:37 Jul 22, 2004 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 F:\WORK\FULL\042804\93391.000 HINTREL1 PsN: SHIRL 2 2002, Saddam’s regime obtained over $10 billion in illegal revenues from the Oil-for-Food Program through illicit surcharges and com- missions as well as smuggling. If these charges prove true, the most obvious victims are those Iraqis who failed to receive needed assistance. But the damage ex- tends much further. The massive windfall resulting from this al- leged organized theft allowed Saddam to maintain his grip on the country, line his pockets, and to make companies and countries dance to his tune with consequences we are still struggling to con- tain. But there is yet a deeper threat. Those who believe that the United Nations and its many programs play a vital role around the world, and I count myself among them, must also fear for the po- tential impact on the reputation and credibility of the U.N. as an institution. The institution’s work in other areas should not be needlessly impeded or placed in doubt by these still-emerging alle- gations. It is, therefore, incumbent upon those with responsibility for these programs, as well as those charged with investigating their failings, to ensure that the truth emerges however unpleasant that task or the results may be. Did U.N. officials responsible for administering the Oil-for-Food Program properly
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