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United Nations Oil for Food Program Hearing Committee

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United Nations Oil for Food Program Hearing Committee UNITED NATIONS OIL FOR FOOD PROGRAM HEARING BEFORE THE SUBCOMMITTEE ON ENERGY AND AIR QUALITY OF THE COMMITTEE ON ENERGY AND COMMERCE HOUSE OF REPRESENTATIVES ONE HUNDRED EIGHTH CONGRESS SECOND SESSION JULY 8, 2004 Serial No. 108–106 Printed for the use of the Committee on Energy and Commerce ( Available via the World Wide Web: http://www.access.gpo.gov/congress/house U.S. GOVERNMENT PRINTING OFFICE 95–451PDF 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 11-MAY-2000 10:36 Oct 12, 2004 Jkt 000000 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 95451.TXT HCOM1 PsN: HCOM1 COMMITTEE ON ENERGY AND COMMERCE JOE BARTON, Texas, Chairman W.J. ‘‘BILLY’’ TAUZIN, Louisiana JOHN D. DINGELL, Michigan RALPH M. HALL, Texas Ranking Member MICHAEL BILIRAKIS, Florida HENRY A. WAXMAN, California FRED UPTON, Michigan EDWARD J. MARKEY, Massachusetts CLIFF STEARNS, Florida RICK BOUCHER, Virginia PAUL E. GILLMOR, Ohio EDOLPHUS TOWNS, New York JAMES C. GREENWOOD, Pennsylvania FRANK PALLONE, Jr., New Jersey CHRISTOPHER COX, California SHERROD BROWN, Ohio NATHAN DEAL, Georgia BART GORDON, Tennessee RICHARD BURR, North Carolina PETER DEUTSCH, Florida ED WHITFIELD, Kentucky BOBBY L. RUSH, Illinois CHARLIE NORWOOD, Georgia ANNA G. ESHOO, California BARBARA CUBIN, Wyoming BART STUPAK, Michigan JOHN SHIMKUS, Illinois ELIOT L. ENGEL, New York HEATHER WILSON, New Mexico ALBERT R. WYNN, Maryland JOHN B. SHADEGG, Arizona GENE GREEN, Texas CHARLES W. ‘‘CHIP’’ PICKERING, KAREN MCCARTHY, Missouri Mississippi, Vice Chairman TED STRICKLAND, Ohio VITO FOSSELLA, New York DIANA DEGETTE, Colorado STEVE BUYER, Indiana LOIS CAPPS, California GEORGE RADANOVICH, California MICHAEL F. DOYLE, Pennsylvania CHARLES F. BASS, New Hampshire CHRISTOPHER JOHN, Louisiana JOSEPH R. PITTS, Pennsylvania TOM ALLEN, Maine MARY BONO, California JIM DAVIS, Florida GREG WALDEN, Oregon JANICE D. SCHAKOWSKY, Illinois LEE TERRY, Nebraska HILDA L. SOLIS, California MIKE FERGUSON, New Jersey CHARLES A. GONZALEZ, Texas MIKE ROGERS, Michigan DARRELL E. ISSA, California C.L. ‘‘BUTCH’’ OTTER, Idaho JOHN SULLIVAN, Oklahoma BUD ALBRIGHT, Staff Director JAMES D. BARNETTE, General Counsel REID P.F. STUNTZ, Minority Staff Director and Chief Counsel SUBCOMMITTEE ON ENERGY AND AIR QUALITY RALPH M. HALL, Texas, Chairman CHRISTOPHER COX, California RICK BOUCHER, Virginia RICHARD BURR, North Carolina (Ranking Member) ED WHITFIELD, Kentucky TOM ALLEN, Maine CHARLIE NORWOOD, Georgia HENRY A. WAXMAN, California JOHN SHIMKUS, Illinois EDWARD J. MARKEY, Massachusetts Vice Chairman FRANK PALLONE, Jr., New Jersey HEATHER WILSON, New Mexico SHERROD BROWN, Ohio JOHN B. SHADEGG, Arizona ALBERT R. WYNN, Maryland CHARLES W. ‘‘CHIP’’ PICKERING, GENE GREEN, Texas Mississippi KAREN MCCARTHY, Missouri VITO FOSSELLA, New York TED STRICKLAND, Ohio GEORGE RADANOVICH, California LOIS CAPPS, California MARY BONO, California MIKE DOYLE, Pennsylvania GREG WALDEN, Oregon CHRIS JOHN, Louisiana MIKE ROGERS, Michigan JIM DAVIS, Florida DARRELL E. ISSA, California JOHN D. DINGELL, Michigan, C.L. ‘‘BUTCH’’ OTTER, Idaho (Ex Officio) JOHN SULLIVAN, Oklahoma JOE BARTON, Texas, (Ex Officio) (II) VerDate 11-MAY-2000 10:36 Oct 12, 2004 Jkt 000000 PO 00000 Frm 00002 Fmt 6011 Sfmt 0486 95451.TXT HCOM1 PsN: HCOM1 C O N T E N T S Page Testimony of: Babbin, Jed, former Deputy Under Secretary of Defense ............................. 36 Christoff, Joseph A., Director, International Affairs and Trade, General Accounting Office .......................................................................................... 17 Flake, Hon. Jeff, a Representative in Congress from the State of Arizona . 9 Rosett, Claudia, Journalist-in-Residence, the Foundation for the Defense of Democracies, and Adjunct Fellow, Hudson Institute ............................. 31 (III) VerDate 11-MAY-2000 10:36 Oct 12, 2004 Jkt 000000 PO 00000 Frm 00003 Fmt 0486 Sfmt 0486 95451.TXT HCOM1 PsN: HCOM1 VerDate 11-MAY-2000 10:36 Oct 12, 2004 Jkt 000000 PO 00000 Frm 00004 Fmt 0486 Sfmt 0486 95451.TXT HCOM1 PsN: HCOM1 UNITED NATIONS OIL FOR FOOD PROGRAM THURSDAY, JULY 8, 2004 HOUSE OF REPRESENTATIVES, COMMITTEE ON ENERGY AND COMMERCE, SUBCOMMITTEE ON ENERGY AND AIR QUALITY, Washington, DC. The subcommittee met, pursuant to notice, at 9:50 a.m., in room 2123, Rayburn House Office Building, Hon. Ralph M. Hall (chair- man) presiding. Members present: Representatives Hall, Whitfield, Shimkus, Shadegg, Walden, Rogers, Issa, Otter, Sullivan, Barton (ex officio), Allen, McCarthy, and Strickland. Also present: Representative Ose. Staff present: Bill Cooper, majority counsel; Mark Menezes, ma- jority counsel for energy and the environment; Peter Kielty, legisla- tive clerk; and Sue Sheridan, minority counsel. Mr. HALL. I want to thank everyone for coming to the hearing on the United Nations Oil for Food Program, and I especially want to thank the panelists for attending and for their written testimony and for the time that they are giving to this subcommittee, to the committee, and to the Congress, and to the Nation. I look forward to hearing from each of you. We invited the State Department to testify today, but they didn’t show enough interest to decide to attend. I suppose we will hear from them at a later time one way or the other. This subcommittee will come to order and, without objection, the subcommittee will proceed pursuant to committee Rule 4(e), and that is so ordered. The Chair recognizes himself for an opening statement. The United Nations’ Oil for Food Program was spawned out of good intentions. As someone once said, the road to perdition is paved with good intentions. Such is the case for the Oil for Food Program. As we see the trail of corruption unfolding on the world stage, it seems that the only folks with, ‘‘good intentions,’’ were those not running the program. Several congressional committees are inves- tigating the Oil for Food Program, as is the United States Justice Department. Finally, the U.N. got into the act with the appointment of the Volcker Commission. I am encouraged to read that Chairman Volcker sees the importance of such an independent inquiry with a lot of good public disclosures surely to follow. He is a good man and a good chairman, and we are anxious to see the results of his investigation. (1) VerDate 11-MAY-2000 10:36 Oct 12, 2004 Jkt 000000 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 95451.TXT HCOM1 PsN: HCOM1 2 The General Accounting Office reports that over $10 billion have been illegally diverted to the old Iraqi regime. I suspect that any other nonsovereign organization even hinting of a scandal of that magnitude would be shut down and out of business overnight. By allowing such fraud and deception to continue and for U.N. employees to participate in it has probably resulted in the deaths of thousands of Iraqis through malnutrition and lack of appropriate medical supplies. We have a name for that in the United States, it is called murder. This hearing today is the second hearing this subcommittee has held in the 108th Congress on the Oil for Food Program, and it probably won’t be the last. Such widespread corruption has to be stopped, and those responsible must face justice. It is only by shin- ing the light of full public disclosure on an otherwise dark and se- cretive process that we can purge corruption. We need to hurry while there is still something to save. With that, I recognize Mr. Allen for an opening statement. Mr. ALLEN. Thank you, Mr. Chairman. Today’s hearing is on the allegations of mismanagement in the U.N. Oil for Food Program, an appropriate topic. My concern is really what is the overall purpose of this hearing? Is it to conduct proper oversight and ensure accountability so that Iraqi oil reve- nues get to the Iraqi people? Or is it, to be blunt about it, simply to bash the United Nations? Past statements and records of our witnesses provide an indication. My gym buddy, my friend from Arizona, Mr. Flake, has intro- duced legislation to withhold U.S. Contributions from the United Nations until the Oil for Food Program issues are investigated. Last night, he voted for an amendment to eliminate all U.S. con- tributions to the U.N. Claudia Rosett wrote in January 2002 in the Wall Street Journal Europe that, quote, New York is a great city, a crossroads accus- tomed to hosting all sorts of nonsense. It is, after all, home to the United Nations. Jed Babbin recently authored a book titled, ‘‘Inside the Asylum: Why the U.N. and Old Europe are Worse Than you Think.’’ The book’s inside flap declares, ‘‘The U.N. is more of an international criminal than a dispenser of legitimate international law.’’ By contrast, we have no testimony from the State Department, from the United Nations, from the independent inquiry committee chaired by Paul Volcker, and I agree with the chairman, he is a good man and will do an excellent job. We have no testimony from KPMG or any other auditor. I have no objection to hearing from the witnesses who are here today, but the hearing panel does not reflect the breadth of views, the balance of views we should have. Currently, nine separate investigations are looking into allega- tions that the U.N. mismanaged $65 billion in Iraqi oil sales under the Oil for Food Program, including those by several other congres- sional committees. I welcome more congressional oversight, but I question the majority’s investigative priorities. By contrast, there have been no public hearings as far as I am aware on the administration’s prewar Iraqi WMD claims. There have been few, if any, hearings on the overextension of Guard and VerDate 11-MAY-2000 10:36 Oct 12, 2004 Jkt 000000 PO 00000 Frm 00006 Fmt 6633 Sfmt 6633 95451.TXT HCOM1 PsN: HCOM1 3 Reserve forces, the sole source contracting to companies like Halli- burton, and allegations now under U.N.
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