[Congressional Record Volume 150, Number 96 (Tuesday, July 13, 2004)]
[House]
[Pages H5627-H5636]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
OIL-FOR-FOOD PROGRAM
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 2003, the gentleman from Connecticut (Mr. Shays) is
recognized for 60 minutes as the designee of the majority leader.
Mr. SHAYS. Mr. Speaker, at this time I would just introduce our
remarks by saying I do not think I have done a special order this
entire session, but I am doing one tonight because I feel very strongly
about an issue, and that is the Oil-for-Food Program. And my
subcommittee is working, as is the Committee on International
Relations, on the whole issue of oil for food and the outrageous rip-
off, probably the biggest rip-off in the history of rip-offs, the $10
billion plus events over the course of many years that Saddam was
involved in.
At this time I would like to recognize the gentleman from New Jersey
(Mr. Smith) for whatever time he would like to consume.
Mr. SMITH of New Jersey. Mr. Speaker, I thank my good friend for
yielding and join him in this very strong concern about one of the
biggest scandals known in history and thank him for his good work as
chairman of the subcommittee in trying to get to the truth as to what
happened.
{time} 2045
Mr. Speaker, tonight, we are discussing the recent disclosures about
problems with the U.N.'s Oil-for-Food program. As my colleagues know,
in 1995 the U.S. worked with the U.N. to create a program to allow
Saddam Hussein to sell his country's oil in what was purported to be a
controlled manner in return for shipments of humanitarian goods for the
Iraqi people. Tragically, we now know that this noble effort was
grotesquely undermined by scandal. The GAO estimates that some $10
billion in oil revenue was stolen from the people of Iraq.
The laudable purpose of the Oil-for-Food program was to alleviate
massive human suffering by innocent Iraqi civilians whom Saddam Hussein
was deliberately starving in order to generate international support
and sympathy for lifting U.N. Security Council sanctions against Iraq.
The system to be implemented by the U.N. and by member states was
supposed to carefully monitor all sales of oil and make sure that these
petrol dollars were placed in a trust fund at the French Bank, the PNB-
Paribas.
The system was supposed to be transparent. It was supposed to be
above board. It was supposed to be open, but it was anything but. As
the coverup and the lack of transparency crippled efforts that continue
to this day, efforts to establish all of the facts and to hold the
corrupt to account.
New York Times columnist William Safire noted in June of 2004 that
there are some 5,000 Oil-for-Food file folders stored at BNP-Paribas
storage facilities in New York and in my home State of New Jersey with
documentation on the letters of credit, the notice of arrival
documents, descriptions of the contracts; and yet the U.S.
investigators are not being allowed access to these vital documents.
In theory, Mr. Speaker, the trust funds were supposed to be out of
the Hussein regime's control and were to be used to purchase civilian
consumer goods and basic infrastructure. The justified fear manifested
in the 1990s by the United States and the United Kingdom was that
Hussein's agents would try to misuse oil funds to purchase banned
weaponry and luxury items for the regime. History has proven these
fears to be well founded. Unfortunately, the United Nations apparently
presided over a system that was rife with loopholes and opportunities
for Hussein and his thugs to corrupt and bribe their way towards
enrichment at the expense of the very people he was to feed, clothe,
and provide health care for.
For example, the Clinton administration estimated in the year 2000
nearly $2 billion of the Oil-for-Food assistance was diverted to build
nine lavish palaces for Saddam Hussein and his Baath Party supporters,
all of this while children went hungry and without medicines. The
Congressional Research Service, Mr. Speaker, in April 2004 did an
analysis of the various estimates to try to get a handle on the scale
of the Iraqi sanctions cheating and the U.N. failure to stop them.
CRS notes said, ``There are no authoritative figures for the value of
illicit trade with Iraq. However, the most widely cited estimates come
from a study released in May 2002 by the GAO. According to the GAO
study, Iraq earned $6.6 billion in illicit revenue from oil smuggling
and surcharges during 1997 to the year 2001. Of that total, GAO
estimates that $4.3 billion was from illicit oil sales and $2.3 billion
from surcharges on oil and commissions from its contracts to buy
civilian goods (kickbacks). The study estimated that during 2001, Iraq
earned $1.5 billion from illicit oil sales from Jordan, Syria, Turkey,
and the Persian Gulf; and about $700 million from surcharges and
contract kickbacks.''
Mr. Speaker, as we all know, Congress and the Bush administration are
actively investigating allegations of large-scale U.N. corruption in
complicity with Iraqi sanctions violations. But we have not been
allowed the access to information that would make these efforts
successful. One problem, Mr. Speaker, with the U.N. program, and I
would underscore this, is that it seems that the firm which signed the
contracts with the U.N. to inspect the humanitarian aid shipments,
Cotecna, appears to not have had enough inspectors at their posts to
make sure that the transactions were handled properly.
According to internal U.N. audits, Cotenca overcharged the U.N. while
understaffing the inspection positions. In other words, part-time work
for full-time pay. This particular allegation was included in a report
written by auditors from the Office of Internal Oversight at the U.N.
This report, we are now told, is one of 55 that the U.N. auditors did
on the Oil-for-Food program. Amazingly and shamefully, all 55 audits
were kept from the U.N. membership, including the United States
mission. This is just plain wrong; and to the best of my knowledge, no
one in the Congress has seen the other 54 reports.
At the very least, these reports should be released immediately by
the United Nations to the U.S. and other interested governments, and
this stonewalling must end. I would point out to my colleagues that the
distinguished chairman of the House Committee on International
Relations, the gentleman from Illinois (Mr. Hyde), wrote to Secretary
General Annan: ``The U.S. Congress, which provides 22 percent of the
U.N.'s budget and which has publicly requested copies of the 55
internal audits, should not be required to depend on media leaks for
source documents.''
The report on Cotecna, I would point out, was leaked and was placed
on the Internet. If it were not for the bravery of one unnamed
official, we would not even have this one report.
Mr. Speaker, let me just conclude by noting that while the United
Nations looked the other way, or worse was complicit and corrupt,
Saddam Hussein was underselling his oil in return for kickbacks and
providing commercial favors to the companies from countries which did
his bidding in his ongoing propaganda war against the United States.
The scheme was rotten to the core. In my mind, it also raises some very
serious questions about two of our Security Council countries which
most adamantly opposed the U.S. multinational coalition military
commitment, and they were France and Russia. They were among those
getting the greatest sweetheart deals during the Oil-for-Food
situation.
For example, the Russia diplomatic representatives, we are told, were
instructed to do everything they could to push for contracts with
Russian companies. There are hundreds of Russian companies dealing in
Iraq. Some were even front companies for Iraqi officials steering the
proceeds into offshore bank accounts. Some companies took open bribes.
One Russian company, Lakia, paid bribes to Iraqi officials to get their
contracts through; but when the contract fell apart, Lakia asked for
[[Page H5628]]
its bribe money to be paid back and even complained to the U.N. about
the situation.
What did Benon Sevan, director of the U.N. office overseeing the Oil-
for-Food program do about this? He notified Saddam's officials before
he even told the U.N. about it.
Investigators are now hearing that the U.N. officials were open to
bribes by suppliers if those vendors wanted their contracts to move up
in priority for consideration there. They are hearing that U.N.
officials would disclose the details behind the holes that U.S.
officials were placing on contracts in return for the right amount of
money. They are hearing that inspectors at Iraq's posts were also open
for bribes and overfilling oil tankers beyond the contracted amount and
then selling the extra oil and lining their pockets with the profits.
Under pressure, Mr. Speaker, as we all know, in April 2004 the U.N.
appointed a commission headed by Paul Volcker, the former Chairman of
the U.S. Federal Reserve, to independently investigate this massive
scandal.
Mr. Volcker is currently assembling his staff and beginning his
inquiry. That sounds good, because Mr. Volcker enjoys a great deal of
respect. But even with the best of intentions, if he is not given all
the tools to unearth the truth, the probe will fall short. I will point
out to my colleagues that Mr. Volcker and his commission do not have
subpoena power, a deficiency in his powers that will undoubtedly
cripple his access to information. How is he going to compel U.N.
officials to provide the hard evidence of corruption?
Let us face it, Mr. Speaker, corrupt officials are not going to
voluntarily hand over boxes of files filled with incriminating
evidence. Instead, those boxes are likely to be shredded or redacted.
Without subpoena power, the U.N.'s internal investigation will be
stymied and will likely raise more questions than it answers, and the
hard truths about this mother of all scandals are likely to be lost and
remain elusive.
Secretary General Kofi Annan says he will fire any U.N. employee who
does not cooperate. Sounds good. Let us see. We will see. How do we
define cooperate? How do we know what remains secret when we do not
have that ability to compel evidence? Mr. Annan's own son may be
involved in this scandal since he was Cotecna's consultant, and that
raises serious questions as well.
These are tough questions, Mr. Speaker; and I understand that the
answers will not come overnight, and under the current glideslope,
perhaps they will never come.
Congress needs to demand real answers, as we are doing; and there
needs to be real and meaningful reforms made at the United Nations.
Mr. Speaker, I am glad we organized this very important night to
focus on this terrible scandal. I thank my good friend, the gentleman
from Connecticut (Mr. Shays), for yielding to me.
Mr. SHAYS. Mr. Speaker, I thank the gentleman for a wonderful
introduction and outline of the problem.
I now yield to the gentleman from Michigan (Mr. McCotter), a new
member to Congress and one who is very active in this issue.
Mr. McCOTTER. Mr. Speaker, we are engaged in a great debate in a
great and dangerous time. At the heart of this debate dwells the United
Nations' scandalous Oil-for-Food program, for it constitutes not merely
a matter of dollars and cents, but truly a matter of life and death.
I would like to quote to prove the point a copyrighted article by the
writer Claudia Rosett, who is a Fellow at the Hudson Institute, in
which she cites Claude Hankes-Drielsma, a British advisor to the
interim governing council, in which he says of the scandal, ``It is
expected to demonstrate the clear link between those countries which
were quite ready to support Saddam Hussein's regime for their own
financial benefit at the expense of the Iraqi people and those that
opposed the strict applications of sanctions and the overthrow of
Saddam Hussein.''
Clearly this proves the scandal not only has disgraceful fiscal
consequence but has also had dire martial consequences.
The resolutions regarding the weapons of mass destruction that the
U.N. passed and yet lacked the resolve to fully and fairly and truly
enforce, that lack of resolve will remain a question in the minds of
many as long as this scandal lingers; for we will have to ask
ourselves, did the U.N. come to their decisions, come to their lack of
resolve with clean hands or with the money of Saddam Hussein in them?
How much better would intelligence have been had the U.N. been actively
and forcefully trying to get Saddam Hussein and Iraq to comply with
those sanctions rather than finding one excuse or another not to do so?
In terms of our U.S. coalition and the buildup to the war, how many
other countries would have been willing to join us had not many in the
U.N. undermined our efforts to enforce those resolutions? And again, we
ask ourselves, Did those countries that undermined our efforts to build
a coalition come to that with clean hands or with Saddam Hussein's Oil-
for-Food money in those very hands?
As for our soldiers, we now have to ask ourselves, how much of the
potentially $10 billion that was skimmed, stolen, misplaced, misspent,
gone, how much of that money wound up in the hands of contractors who
were front groups, as the U.S. Treasury has just designated one, of
contractors who did business under the Oil-for-Food scandal? How much
of that money that was stolen is currently being used by Saddam's
insurgents and terrorists to kill America's sons and daughters in Iraq?
So much of the debate that we have heard internally in this country
cannot have a resolution or even properly be addressed until we
determine the extent of the corruption, the venality and the moral
bankruptcy that lurks at the heart of this scandal, especially because
the great debate I mentioned in many quarters these days hinges on
this.
There are those in this country who believe the United States should
be more like the United Nations. I for one am not ashamed or abashed to
say I believe the United Nations should be more like the United States.
If they had been, perhaps the sanctions would have worked, perhaps the
dictator would have been deposed through democracy and other soft
means; but we were not given that chance to see that because we were
not dealing with an ally at the United Nations. We were dealing with an
adversary. We were dealing with an adversary bent on their own
financial gain at the expense of the Iraqi people and democracy
throughout the world.
Mr. SHAYS. I thank the gentleman very much. I want to say before
yielding to the gentleman from California (Mr. Ose), who has been very
active on our committee's investigation, the National Security
Committee's investigation, that one of the intriguing things about the
whole Oil-for-Food program was that while people knew it was a problem,
it did not really catch the attention of the international community
until a paper, Al Mada, printed the names of 270 people alleged to be
involved in this program.
{time} 2100
I smiled because this was an Iraqi newspaper, not an American
newspaper, not a European newspaper, and they got their information
from a government leak within the Iraqi Governing Council. As I think
of Iraq emerging into democracy, I smile a bit thinking that this was
one of the first attempts I think of this new Iraqi community to start
to enjoy the incredible protection of a free press and a press that has
the capability to print what needs to be said.
So they printed the names of 270 individuals. They included Kofi
Annan's son. They included Benon Sevan, who ran this program, run by
the United Nations, to make sure it was free of any corruption.
I think my colleague, the gentleman from California (Mr. Ose), would
agree it is kind of hard to imagine how a program that basically was
run in essence by Saddam Hussein but overseen by the U.N. would be a
program that would be run well.
Saddam Hussein decided that he did not want to deal in U.S. dollars.
So he decided that it would be in euros. So that is what it was. He
decided who would buy and who would sell his products. He decided to
undersell oil and get a kickback and overpay for commodities and get a
kickback.
[[Page H5629]]
In the end, we estimate that approximately $5.7 billion was smuggled
out of the country through Jordan, through Turkey and primarily through
Syria, and that 4.4 were oil surcharges and kickbacks and so-called
humanitarian purchases and kickbacks.
There is no innocent explanation for how this could happen, and there
is no question that people in the U.N. knew what was happening, and I
think we can say, as I recognize now the gentleman from California (Mr.
Ose), that there is no doubt that the Security Council knew, including
the Americans, the Russians, the French, the British, the Chinese, or
most people knew that this program was really not working properly, but
it took a small paper, Al Mada, printed in Baghdad, to awaken the world
to this horrendous scandal.
At this time, I yield to my colleague, the gentleman from California
(Mr. Ose), for any comments he would like to make.
Mr. OSE. Mr. Speaker, I thank the gentleman from Connecticut for
yielding.
Mr. Speaker, sometimes we work here in the hallowed halls of
Congress, and we come upon things that almost come out of a Tom Clancy
novel. I do not know of anything in my few years here that even begins
to rival the complexity or the obvious opportunities that existed in
this so-called Oil-for-Food Program set up by the United Nations.
I want to go back and just kind of visit as to the genesis of the
Oil-for-Food Program. If my colleagues recall, after the Gulf War, we
imposed sanctions on Iraq hoping that those sanctions, in fact, would
bring the Hussein regime down. Over time, the caloric intake for the
people of Iraq, men, women and children, still stuck there under the
regime of Hussein was reduced to about 1,200 or 1,300 calories a day.
The United Nations, in its wisdom, after significant input from any
number of the member states, decided to undertake a program, the
objective of which would be to raise the average daily caloric intake
for the folks who lived in Iraq under the same regime.
Interestingly enough, the first time the U.N. proposed this, Iraq
declined the opportunity. It was only after the second time that the
U.N. proposed this that Iraq undertook to participate in this; and it
was, frankly, a pretty clever scheme.
It took the oil that exists in surplus in Iraq relative to its
domestic needs and put it on the market, directed the funds from that
sale of the oil to an escrow account under the control of the United
Nations from which food and medicine could be bought for delivery and/
or distribution to the people of Iraq.
Lo and behold, a couple of years passed and all of a sudden the
questions started rising as to whether or not there were surcharges,
kickbacks, corruption and the like.
Well, the U.N. had actually set up a committee to examine or to make
sure that this program proceeded according to the rules and regulations
that it laid out in its resolutions, and that committee was called the
661 Committee, and the membership of the 661 Committee was composed of
the five permanent members of the Security Council, plus the additional
10 revolving members of the Security Council who move in and out of
those seats as the elections or the pattern allows.
Over the ensuing years from the Gulf War, the five permanent Security
Council members sat on the 661 Committee and a revolving number of 10
additional States sat on that 661 Committee.
Now, the contracts, the way it worked was you had to get a contract
for the purchase of oil. That had to be approved by the members of the
661 Committee, and then the transaction would be allowed to go forward,
and upon delivery of the oil, there would be a third-party inspector in
Iraq to ascertain the exact compliance with the contract. That person
was supposed to send notification to New York so that in New York the
escrow account could collect the funds from the buyer of the oil and
disburse the funds for the purchase of food and medicine.
Well, keep in mind the name of this program, I just want to make this
point, because the Oil-for-Food Program was about the most inaccurately
named welfare effort of the United Nations as one can imagine. Let me
tell you some of the things the Oil-for-Food Program managed to procure
for the benefit of the Iraqi people. Keep in mind the purpose having
been food and medicine.
The government of Iraq was able to persuade the United Nations' 661
Committee that the people of Iraq needed 1,500 ping-pong tables. I
guess apparently they needed fiber. So one of the contracts called for
the delivery of 1,500 ping-pong tables.
We heard earlier from the gentleman from New Jersey (Mr. Smith) the
testimony about the nine presidential palaces that were constructed by
virtue of the money that was skimmed from the Oil-for-Food Program.
But in addition to the nine presidential palaces that were financed
through the Oil-for-Food Program, there were also roughly 300 Mercedes
that were purchased, again for the benefit of the people of Iraq and
their food and medicine requirements. Now, 300 Mercedes Benz, what do
you suppose they did with those? I have not figured that part out.
Here is a good one. This is actually close to using some dairy
products. There were soft ice cream machines authorized for purchase
under the Oil-for-Food Program.
There were overpriced dental chairs from China purchased in the Oil-
for-Food Program. This is like a Tom Clancy novel. I am not making this
stuff up. There was a warehouse full of undelivered wheelchairs
purchased under the Oil-for-Food Program, again for the benefit of the
people of Iraq.
The one that I find is perhaps best, we are worried about infant
mortality, infant survivability in some of these Third World countries.
So one of the things that the United Nations undertook to provide was
equipment for the medical needs of newborns. So they went and bought
defective ultrasound machines from Algeria. Algeria rounded up all
these ultrasound machines that did not work and sold them to the U.N.
for premium dollars.
There was perfume. I guess the people, I do not know, they needed
perfume in the Oil-for-Food Program.
Now, there were additional things that were in the Oil-for-Food
Program or at least on the contracts it allowed for the purchase of
water pumps, piping and other supplies; and, unfortunately, what we
find 9 years in when we have to go into Iraq, we find that none of the
water pipe for drainage systems or other things that are so essential
to civil life here in the United States have been installed. In fact,
those water pumps and pipes have basically been hijacked for use in
Saddam's various palaces for water improvement.
Now, I want to go back to my friend from Connecticut because I know
he has quite a bit to offer, but before I do I just want to remind the
folks in this Chamber about the preamble for the United Nations, the
purpose of the United Nations. In part it says, we the peoples of the
United Nations determine to establish this is the first thing, to
establish conditions under which justice and respect for the
obligations arising from treaties and other sources of international
law can be maintained; and to promote social progress and better
standards of life in larger freedom; and, finally, to unite our
strength to maintain international peace and security.
I would submit to my colleagues that the schemes that evolved from
the original U.N. Oil-for-Food Program, that the scheme of corruption
and apparent fraud basically served to undermine each of those three
principles, and I hope to come back to that in the course of this
evening's discussion.
Mr. SHAYS. Mr. Speaker, before yielding to the gentleman from Indiana
(Mr. Pence), who is on the Committee on International Relations, we
heard from the gentleman from New Jersey (Mr. Smith) of the Committee
on International Relations and also the gentleman from Michigan (Mr.
McCotter) on the Committee on International Relations. I would like to
recognize the gentleman from Indiana (Mr. Pence) as well.
That committee, the full committee, is conducting its investigation
of the Oil-for-Food Program. Our Subcommittee on National Security,
Emerging Threats and International Relations of the Committee on
Government Reform is doing that same investigation. We are working
together. We
[[Page H5630]]
are comparing notes. We are trying not to be duplicative but trying to
make sure that we are able to pierce the veil of what is truly the most
outrageous scandal, certainly world scandal, that anyone to date has
ever uncovered.
This again is a $5.7 billion smuggling ring and a 4.4 oil surcharge
and kickbacks on the sale of oil and the purchase of commodities that
were overpaid for and then kickbacks were provided to Saddam.
What is really outrageous about this whole horrific exercise is that
the U.N. was in charge to guarantee that it would be run properly, the
U.N. comprised of member States like France and Germany and Russia and
China, as well as the United States and Great Britain. At times, the
United States and Great Britain voiced concern about this program, but
the program continued, and it was not until, again, an Iraqi newspaper,
Al Mada, really outed 270 people that the world started to think that
they needed to pay attention to this issue.
Besides talking about the incredible rip-off, the U.N. was making
legitimate dollars, billions of dollars running the program, and we
understand why there was a reluctance to no longer have that
opportunity. Then what we began to realize is people in the U.N. and
member states were making billions of dollars in illegal activities.
It is hard pressed to know why particularly the Russians and the
French were so involved in this program, but when you recognize how
involved they were, it does give you some indication of their
reluctance to want to confront Saddam since he knew so well their
involvement in these illegal schemes, and it does suggest, I think, a
very real motive for why France in particular and Russia and China were
so reluctant to see this dictator's regime end.
If the French had stuck with us, as they had in December through
January, instead of being the apologist for Saddam but had stuck with
us, it is unlikely we would ever have had to go in because it is very
likely and it is very clear Saddam knew we believed we were not going
to come in and remove him because the French and the Russians and the
Chinese were not with us.
{time} 2115
That gave him the confidence to think he could continually stonewall
us.
So besides the incredible rip-offs that have been mentioned by the
gentleman from California (Mr. Ose), the gentleman from New Jersey (Mr.
Smith), and others, there is the whole issue of why there was not
greater cooperation to force Saddam to do what was required in the 1991
signing of the cease-fire: Fully cooperate with the U.N. and
demonstrate and prove that his programs of weapons of mass destruction
had ended.
Mr. Speaker, I now yield to my colleague, the gentleman from Indiana
(Mr. Pence), and thank him for his work in this important
investigation.
(Mr. PENCE asked and was given permission to revise and extend his
remarks.)
Mr. PENCE. Mr. Speaker, I rise tonight to join the gentleman from New
Jersey (Mr. Smith), and thank him as well as the gentleman from
Connecticut (Mr. Shays), for their extraordinary efforts in bringing
what is very likely the largest scandal in the history of the United
Nations into the public domain.
Mr. Speaker, a very limited fan of the Larry King Live program would
know that the gentleman from Connecticut (Mr. Shays) is one of the most
eloquent and compelling Members of Congress in the national media, and
I, for one, am grateful that the chairman is willing to dedicate so
much of his energy to calling the Nation's attention to this issue and
wish to commend him for doing that.
There seems to me to be an opposite impulse afoot in both the
international community as well as here in our Nation's capital.
Despite the fact that this multibillion dollar Oil-for-Food program,
which operated from 1996 to 2003, resulted in billions of dollars lost
in graft and payoffs, there seems to be an impulse among some quarters
within our own diplomatic community here in Washington and even around
the world to simply move on.
Clearly, I would be, as a strong supporter of Operation Iraqi
Freedom, I would be the very first to say we ought not to let the
mistakes of the past interfere with opportunities for alliances in the
future. And I, for one, am extraordinarily encouraged to see the United
Nations Security Council embracing a new role of partnership in the
development of a free and stable and Democratic Iraq. But it seems to
me to be all together consistent with the aims of a vital and important
role of the United Nations on the world scene, especially in difficult
areas like Iraq, or even in Sudan, of which we may well be talking in
the near future, it seems to me we ought to always seek to defend the
basic reputation of integrity of the United Nations.
As we gather here today, we reflect, Mr. Speaker, on this program,
which was, as the gentleman from California (Mr. Ose) just said very
eloquently, a program born of compassion. It was about trying to
provide assistance, both food and medical supplies, to a beleaguered
people in the difficult years that followed the first Persian Gulf War,
and to no less extent the decades of oppression and abuse by the
tyrannical dictator Saddam Hussein. It was to provide them with
resources and assistance by letting the regime of Saddam Hussein sell
oil, the payments for which would go into an escrow fund that would
then purchase medical supplies and food stores to be then delivered
back into Iraq.
Sounds like a pretty flawless arrangement, like a triangle, if you
will. The only problem, and I believe hindsight is 20/20, and I
understand why these decisions were made, but as we learned in the
Committee on International Relations, at the end of the day this Oil-
for-Food program deferred to the principle of sovereignty of Saddam
Hussein's government in Iraq. And why that was problematic, we believe,
is because it permitted Saddam Hussein to choose who he would sell oil
to and to choose who he would buy supplies from.
Allowing this deplorable dictator and his corrupt government to
choose to pick the winners in this multibillion dollar Oil-for-Food
program created an environment, the preliminary evidence of which
created opportunities for graft on a global scale. And as Chairman
Shays just suggested, the interrelationship between this program and
some countries who were loathe to support our efforts militarily
against Iraq is troubling and intriguing and bears fleshing out.
I believe that is what we are about here tonight, simply doing our
part in this chamber, the people's House, to raise public awareness
about this extraordinary scandal and an attempt by a dictator to siphon
off an estimated $10 billion from a program that was truly simply
designed to help people.
A few brief points, and then I will yield back to my betters on this
issue.
The role of Congress. I think what we are about tonight, Mr. Speaker,
is an important role. It is to at least be that one quarter of the
national government in the most powerful and freest Nation in the
history of the world that says, yes, we do care what happened to the
billions of dollars that went out of the Oil-for-Food program; we want
to know who benefited through those illicit profits and kickbacks.
And let me hasten to add that I serve a heartland district in central
Indiana where I grew up seeing the billboards that would read ``get out
of the U.N.'' This is not a ``get out of the U.N. move'' in the
Congress. This is rather a move about saying, if we are not prepared to
demand a full accounting of the resources that move through the United
Nations in the programs that they are charged with governing, I think
that is a greater threat to the long-term vitality of the United
Nations as a legitimate forum for addressing grievances in the free
world than any billboard or any accusation could ever be.
Congress, it seems to me, has a role, and there are a couple. Number
one, to do everything in our power to strengthen the position of the
chairman of the independent investigating committee, the former Federal
Reserve Chairman, Paul Volcker; to do that by the means of the
pocketbook in the Congress. And I am confident that we have done that
and will continue to do that.
Secondly, it is to ensure that the Iraqi interim government and
congressional investigators are able to conduct an effective and
exhaustive investigation. We have heard tonight on the floor about some
of the barriers that
[[Page H5631]]
the U.N. has not yet been willing to waive in contract arrangements
that need and must be waived to permit our government and the Iraqi
government to get to the bottom of the facts.
Lastly, something of what we are doing tonight is to push the State
Department within the Bush administration to ensure that the Oil-for-
Food scandal is thoroughly investigated. I understand, as I said
before, and with this I close, I understand that we have bigger fish to
fry, as we like to say on the Flat Rock River in Bartholomew County,
and those fish to fry include moving forward in a multilateral way in
Iraq and bringing the family of freedom-loving nations together in that
project. But I hasten to add that I simply do not believe that
demanding a strict accounting of the administration of the Oil-for-Food
program that took place in the last decade in the United Nations is in
any way inconsistent with bringing the United Nations and the countries
represented on the Security Council more to bear on the challenges that
we face in Iraq and elsewhere in the world.
If we can find out where the illicit profits went, and if in fact
there were misdeeds done within the United Nations itself by United
Nations personnel, we need to hold them accountable, create new systems
whereby that kind of abuse is no longer as possible as it apparently
was in the 1990s, and I think that will bolster world opinion for the
United Nations and bolster the confidence in future programs, whether
they be in Iraq or elsewhere around the world. So that when the United
Nations says they are going to oversee a program that is designed to
accomplish humanitarian aims, that it will accomplish those aims and it
will not do so in a way that involves graft or the enrichment of
individuals at the public expense.
So once again I commend Chairman Shays for his extraordinary
leadership on the public stage on this issue. I commend him for being
willing, as he candidly in his career frequently is, willing to swim
upstream against what may be the current of the day, but to seek, as he
so doggedly does, as the gentleman from California (Mr. Ose) does, and
all of us I believe in our hearts do, to seek the truth, knowing that
the truth is the only foundation upon which the international community
should ever come together in the United Nations or in any project that
faces us in the 21st century.
Mr. SHAYS. Mr. Speaker, I thank the gentleman for his generous words,
but also for his caring about the U.N. I think it is so important to
reemphasize the fact that we want a better U.N., and it is absolutely
essential that the U.N. do what it can in every way to cooperate. There
will then be a redemption, and the U.N. will have greater impact and
greater moral authority in the future. Failing to do that, I think the
opposite is true.
I thank my colleague for being here, and at this time I wish to
reengage my colleague from California in regards to the Oil-for-Food
program.
Mr. OSE. Mr. Speaker, I thank my colleague. It is interesting that
the gentleman from Indiana (Mr. Pence) was frankly very thorough in his
remarks. One of the things that I continually try to do is bring to
focus why this is important for my constituents. Because, frankly, the
Oil-for-Food program, paid for by oil revenues from the sale of Iraqi
oil, okay, big deal. We needed it.
But let me share why I think this is so important. First of all, in
addition to the reasons elucidated by the gentleman from Indiana (Mr.
Pence), the money that was skimmed was supposed to go to the benefit of
the Iraqi people for the purpose of purchasing food and medicine. In
the absence of that money, somebody else must step in and fill that
void. Somebody else must step in and buy the food or buy the medicine
that the Iraqi people need. Now, is that the United States? Is that the
United Nations? Is that Europe? Whoever it is, they are having to buy
something that should have been funded by money that belonged to the
people of Iraq by virtue of the sale of oil that had belonged to the
people of Iraq.
That is a very important point, because if the United States is going
to have to fill the gap created by the loss of these funds, then my
colleagues and I are going to have to take it out of the Treasury of
the United States. And that is important to each and every one of our
constituents.
I want to return, Mr. Speaker, to what we are trying to accomplish
here. If we look at current events around the world, we find that in
addition to Iraq we have a burgeoning issue in Sudan, and we have them
in various places at different times around the world. Today's event is
Sudan, out by Darfur. If we cannot figure out how to run these programs
under the auspices of the U.N., in a manner that is transparent and
full of accountability, then at some point or another in the future we
are going to lose our will or our interest to do it again, and that
would be a problem. Because that would only compound the tragedy or
tragedies of a future nature as they are now occurring in the Sudan.
Now, Mr. Speaker, I have asked for a couple of things. I think these
are central to getting to a resolution in this matter. First of all, we
need to know the contracts, and there are somewhere between 30,000 and
60,000 individual contracts. We need to have a listing of the contracts
that were involved in the Oil-for-Food program. How much oil was sold
at the point of embarkation in the ports of Iraq? How much money was
then wired from the buyer of that oil to the escrow account under the
control of the United Nations? And then from that escrow account, what
were those funds used for, item by item, dollar amount by dollar
amount, in purchasing goods for the people of Iraq?
{time} 2130
Somebody earlier, I think the gentleman from New Jersey (Mr. Smith),
mentioned the 661 committee. We need to have a copy of the minutes of
the various meetings of the 661 committee. As Members recall, the 661
committee was comprised of the five permanent members of the Security
Council and the 10 rotating members of the Security Council. So day
after day, week after week, month after month, the Security Council and
the 661 committee were the same body. They had regular meetings to
review these contracts. Undoubtedly there are minutes of those
meetings. We have been told there are minutes of those meetings. We
have also been told by the United Nations we may not have copies of the
minutes of those meetings, either redacted or not. We are seeking
copies of those minutes because in addition to the evidence we have
available to us today that shows that the United States brought to the
attention of the 661 committee in March of 2001 the potential
allegation of fraud or corruption, we would like to know whether or not
those allegations were brought to the attention of the 661 committee
prior to that point in time and what was done about it. Interestingly
enough, one of the previous speakers spoke about the office of internal
oversight at the U.N. We have come to find out over the last week or 10
days that there were 55 separate audits of the performance of different
contractors under the Oil-for-Food program, both the program as a whole
and the individual components. We would like to get a copy of those
audits. We have asked for a copy of those audits. We have been told
that we may not have them. What we are looking for is a source for
those audits. And, in fact, we have found one of those audits. In that
audit's recommendations are a list of significant suggested
improvements to the manner in which the program is run.
Mr. SHAYS. Mr. Speaker, our staff has been through some of the
minutes of the U.N. 661 committee of the Security Council members
responsible for the sanction monitoring and oversight of the Oil-for-
Food program. Those minutes have told our staff a story of diplomatic
obfuscation and an obvious purposeful unwillingness to acknowledge the
program was being corrupted. Questions about oil or commodity contracts
were dismissed as dubious media rumors beneath the dignity of the U.N.
to answer while Saddam was given the undeserved benefit of every doubt.
That is what is really striking about this whole program.
Bottom line. After the war in the gulf, after we got Saddam Hussein
out of Kuwait, and I would say parenthetically, somehow he never
thought we would seek to get him out of Kuwait, he had an obligation.
His obligation was to cooperate with U.N. inspectors in terms of
chemical, biological and nuclear program. He simply chose not
[[Page H5632]]
to. So the sanctions were put in place until he cooperated. The problem
was Iraqis were starving and they were not getting their health care.
What was obvious to us is Saddam did not care that his own people were
dying. He was simply not going to cooperate. In a sense he kind of
pushed the world community into doing its best to make sure that Iraqis
did not starve and they got some medicine by saying that there would be
this Oil-for-Food program that he basically would run with the
supervision of the U.N. As has been pointed out, Saddam got to
basically choose who could buy from him and he got to choose who he
would buy from. He would undersell his oil and then get a kickback
because there was so much money to be made in his undervaluing of oil
by the parties that could give him a kickback. He would overbuy for
commodities as the gentleman from California points out, commodities
that were not even necessary, not related to Oil-for-Food. But he did
more than that. In some cases he would buy so-called foodstuffs but
they were animal stuffs, so they paid far more than would be logical
for something that was for animals. In some cases he would purchase
things that were never delivered.
One of the things that we are obviously aware of is the U.N.
investigation by Mr. Volcker, and I believe he is going to put his
heart and soul and is putting his heart and soul in this, he is only
looking at the oil surcharges and kickbacks and the humanitarian
purchases and only somewhat looking at the $5.7 billion involved in the
smuggling of oil through Syria, Turkey and Jordan.
The problem that we have is the following, and I would love to say
this in a more lengthy way by first saying that I have been to Iraq
five times since the end of the removal of Saddam. I was there a year
ago April, in August, December, January, again in April, four times
outside the umbrella of the military. I spoke with everyday Iraqis,
literally hundreds of them. I went to an Iraqi wedding of over 400 men
in attendance. I had a hard time finding the bride at that wedding. I
went and met with religious leaders, community leaders, teachers,
businessmen and some businesswomen. I met with the poorest of the poor
in their homes. Almost every Iraqi told me thank you for ridding us of
Saddam and in the same breath they would say, and when are you leaving?
It was said with a smile and it was said with this eagerness. They
wanted us to go as quickly as possible. They had some criticisms of us
and I think it is important to note, because the Oil-for-Food program
relates to what we are talking about in Iraq. They were suspicious of
us because we were the government. No hard feelings but they never had
a government they could trust. Why would they trust us? They blamed us
for telling them to rebel against Saddam but we left in place the
Republican Guard that annihilated so many of their family members. They
blamed us for the sanctions and the program of Oil-for-Food because
they basically acknowledged the fact that their world was different
after the Gulf War. They could not have commerce with other nations, at
least legally. They could only get their food and their medicine from
Saddam and he gave it out to the peoples he wanted to give it out to.
So many people suffered not just in the early stages before the Oil-
for-Food but continually. The Iraqi people were questioning why we
broke apart the government and said to the Baathists they could not
participate because many of the Iraqis I spoke to had family members
that said, how else did you survive in Saddam's world in Iraq unless
you could be part of the government, the police or the army? We
disbanded all of them.
Mostly they wanted this to be an Iraqi revolution. I say that because
I take tremendous satisfaction that this fledgling nation no longer
having Saddam, they were the ones that forced the world community to
address this issue. They are the ones that forced Kofi Annan to
convince the Russians to allow for this investigation. They are the
ones that have resulted in Mr. Volcker being hired with a budget and
with personnel to do the jobs. The Iraqi people are demanding what
happened to $10.1 billion of their money. It is a good question for us
as well, because we have put in far more than that. If they had $10.1
billion right now, that would be $10.1 billion we would not have to put
into this country.
I am more than grateful that we have moved towards sovereignty for
Iraq and I am hoping that when my subcommittee goes into Iraq this
August and when we interact with this new Iraqi government that we will
get their continued cooperation in helping us pull away the veil of
this unbelievably obscene corruption that was managed by Saddam but
basically protected and facilitated by the United Nations and many of
its member states, particularly some of the biggest apologists for
Saddam, particularly some of those that were most vociferous against
our forcing Saddam to cooperate and against our removal of this hideous
regime, a regime where hundreds of thousands of people lost their lives
and can be found in killing fields all throughout Iraq. When you see an
Iraqi clutching the clothes and bones of a loved one whom they can
identify by the clothes and by the identifications in their pockets,
you have to understand beyond a shadow of a doubt what a noble effort
this has been on the part of the United States to have freed them from
this regime and how important now it is for the United States to do
whatever it can to facilitate this investigation.
I yield to my colleague for any remarks that he would like to make.
Mr. OSE. I thank the gentleman. I think his point about lessons
learned, the implicit point that he makes, is an exceptional one,
because we have learned here. We have learned that anything we do must
be watched very carefully, because the purposes for which it was set up
can be hijacked. We have learned that there are people in this world
who wish to utilize our charitable efforts or our efforts at building
the future prospects of different countries and the opportunity for
people around this world to enjoy freedom, we have learned that people
will take advantage of that.
One of the things I want to do tonight with permission of the Speaker
is to enter into the Record the list that was printed in the newspaper
in Iraq which I think the gentleman from Connecticut's point was what a
remarkable thing that one of the first occasions for a free press to
exist in the country of Iraq since the early seventies dug out a
potential scandal. What better check and balance can you argue for than
the fact that we have reestablished a free press in Iraq to hold the
government there accountable. I would like to enter into the Record the
list of alleged participants in the scheme that was set up by Saddam
Hussein and implemented under the auspices of the United Nations.
----------------------------------------------------------------------------------------------------------------
Data
-------------------------
Recipient Country Barrels
(MM) Value ($MM)
----------------------------------------------------------------------------------------------------------------
The Russian State................................. Russia............................ 1,366 $273.2
Zarubezhneft...................................... Russia............................ 175 34.9
Communist Party Companies......................... Russia............................ 137 27.4
Al-Fayco (Russian Foreign Ministry)............... Russia............................ 129 25.8
Russneft Ampex.................................... Russia............................ 87 17.4
Liberal Democratic Party (Zhirinovsky)............ Russia............................ 80 16.0
LUKoil............................................ Russia............................ 63 12.6
Mastek (Fa'iq Ahmad Sharif)....................... Malaysia.......................... 57 11.4
Amircom (Unity Party/Ministry for Emerge)......... Russia............................ 57 11.4
Zan Gaz........................................... Russia............................ 49 9.8
Ibex.............................................. France............................ 47 9.4
Mawlana Abd Al-Manan.............................. Bangladesh........................ 43 8.6
Mr. Juan.......................................... China............................. 39 7.8
Mujahideen Khaiq.................................. United Kingdom.................... 37 7.3
Rosneft Company................................... Russia............................ 36 7.1
Peace and Unity Party............................. Russia............................ 34 6.8
[[Page H5633]]
Yatumin (Russian Foreign Ministry)................ Russia............................ 30 6.0
Zayn Al-Abideen Ardam............................. Turkey............................ 27 5.4
Gasprom........................................... Russia............................ 26 5.2
Soyuzneftgaz (Yuri Shafrannik).................... Russia............................ 26 5.1
Slayneft.......................................... Russia............................ 26 5.1
Nafta Moscow Company.............................. Russia............................ 25 5.0
Trafigura (Patrick Maugein)....................... France............................ 25 5.0
Roberto Formigoni................................. Italy............................. 25 4.9
Elkon [or Elcon].................................. Switzerland....................... 23 4.6
Al-Huda........................................... United Arab Emirate............... 23 4.6
Onaco Company..................................... Russia............................ 22 4.4
Socialist Party................................... Yugoslavia........................ 22 4.4
Sidanco Company................................... Russia............................ 21 4.2
Finar [Holdings].................................. Switzerland....................... 21 4.2
Salvatore Nicotra................................. Italy............................. 20 4.0
Romain (son of former ambassador to Ba............ Russia............................ 20 3.9
George Galloway/Nawwaf Zuraiqat................... United Kingdom.................... 19 3.8
Awadh Ammura...................................... Syria............................. 18 3.6
Noresco........................................... China............................. 18 3.5
Bassim Qaqish..................................... Spain............................. 18 3.5
Muhammad Al-Hawny................................. Cyprus............................ 17 3.4
Michel Grimard.................................... France............................ 17 3.4
Khaled Gamal Abd Al-Nasser........................ Egypt............................. 17 3.3
Italian Party..................................... Yugoslavia........................ 16 3.2
Techfen........................................... Turkey............................ 16 3.1
Leith Shbeilat.................................... Jordan............................ 16 3.1
Franco-Iraqi Friendship........................... France............................ 15 3.0
Alias Al-Gharzali................................. France............................ 15 2.9
Belminal Company.................................. Belarus........................... 14 2.8
Ancom Co (Muhammad Shatta)........................ Egypt............................. 14 2.8
Imad Al-Jilda..................................... Egypt............................. 14 2.8
Hamad bin Ali Al-Thani............................ Qatar............................. 14 2.8
Biorg............................................. China............................. 14 2.7
Nefta Petroleum................................... Cyprus............................ 13 2.6
Zank Ronk......................................... China............................. 13 2.6
Nikolayi Ryzhkov.................................. Russia............................ 13 2.6
Muhammad Aslan.................................... Turkey............................ 13 2.6
Russneft-Gazexport................................ Russia............................ 13 2.5
Russian Association of Solidarity with Iraq....... Russia............................ 13 2.5
Fa'iq Ahmad Sharif................................ Malaysia.......................... 13 2.5
The Socialist Party of Bulgaria................... Bulgaria.......................... 12 2.4
Beshara Nuri...................................... Syria............................. 12 2.4
Charles Pasqua.................................... France............................ 12 2.4
Glencore.......................................... Switzerland....................... 12 2.4
Sevan............................................. Panama............................ 12 2.3
Abu Al-Abbas...................................... Palestine......................... 12 2.3
Ahmad Mani' Sa'id Al-Utaiba....................... United Arab Empire................ 11 2.2
Riyadh Al-Taher................................... Ireland........................... 11 2.2
Chief of the President's Bureau................... Belarus........................... 6 1.2
Russia............................ 5 1.0
Jean-Bernard Merimee.............................. France............................ 11 2.2
de Souza.......................................... France............................ 11 2.2
Ghassan Shallah................................... Syria............................. 11 2.2
Samir Vincent..................................... U.S.A............................. 11 2.1
Muhammad Othman Sa'id............................. Kenya............................. 11 2.1
Fuad Sirhan....................................... Brazil............................ 10 2.0
Javier Robert..................................... Spain............................. 10 2.0
Arthur Millholland................................ Canada............................ 10 1.9
Left Party........................................ Yugoslavia........................ 10 1.9
Transneft......................................... Russia............................ 9 1.8
Al-Rashid International (Ahmad Al-Bashir)......... Jordan............................ 9 1.8
Kokostancha Party................................. Yugoslavia........................ 9 1.8
Imvume Management (Sandy Majali).................. South Africa...................... 9 1.8
Hamida Na'na'..................................... Syria............................. 9 1.8
Uralinvest (Stroyev).............................. Russia............................ 9 1.7
Social Democratic Party........................... Ukraine........................... 9 1.7
Caspian Investment................................ Russia............................ 9 1.7
ADDAX............................................. France............................ 8 1.7
Sibneft........................................... Russia............................ 8 1.6
Taurus............................................ Switzerland....................... 8 1.6
Samasu............................................ Sudan............................. 8 1.6
Abdullah al-Hourani............................... Palestine......................... 8 1.6
Neftogas.......................................... Ukraine........................... 8 1.6
Megawati.......................................... Indonesia......................... 8 1.6
Abd Al-Karim Al-Aryani............................ Yemen............................. 8 1.6
Raz Company....................................... Nigeria........................... 8 1.5
Kamaneft Company.................................. Russia............................ 8 1.5
Jewan Oil......................................... United Arab Emirate............... 8 1.5
Hayson............................................ Nigeria........................... 7 1.4
Abdallah Al-Sallawi............................... Morocco........................... 7 1.4
Hawala............................................ Malaysia.......................... 7 1.4
Zayyad Al-Ragheb.................................. Jordan............................ 7 1.4
Shaker Al-Khaffaji................................ U.S.A............................. 7 1.4
George Tarkhaynan................................. Lebanon........................... 7 1.4
Shaher Abd Al-Haq................................. Yemen............................. 7 1.4
Muhammad Salah.................................... Egypt............................. 7 1.4
Mahmoud Mahdi Al-Ma'sarawi........................ Egypt............................. 7 1.4
Madex Petroleum................................... Tunisia........................... 7 1.3
Shaker bin Zayd................................... Jordan............................ 7 1.3
Russian Committee of Solidarity with the P........ Russia............................ 7 1.3
Mr. Feloni........................................ Italy............................. 7 1.3
Abd Al-Adham Manaf................................ Egypt............................. 6 1.2
Fawwaz Zuraiqat................................... Jordan............................ 6 1.2
Vinafod........................................... Vietnam........................... 6 1.2
Ghassan Zacharia.................................. Syria............................. 6 1.2
Ukraine Communist Party........................... Ukraine........................... 6 1.2
Stroyneftgas...................................... Russia............................ 6 1.2
Liberal Party..................................... Belarus........................... 6 1.2
Fakhri Qa'war..................................... Jordan............................ 6 1.2
Adel Al-Jablawi (I.N.M. Airways).................. Russia............................ 6 1.2
Shukri Ghanem..................................... Libya............................. 6 1.2
Farras Mustapha Tlass............................. Syria............................. 6 1.2
Arab Company limited.............................. Egypt............................. 6 1.2
Nadhel Al-Hashemi................................. Morocco........................... 6 1.1
Romanian Labor Party.............................. Romania........................... 6 1.1
Biham Singh....................................... India............................. 6 1.1
Issa bin Zayed Al-Nahyan.......................... United Arab Emirate............... 5 1.0
Liberation Organization (Political Bureau)........ Palestine......................... 5 1.0
Shanfari Group.................................... Oman.............................. 5 1.0
Hugh Company (Sokolov)............................ Ukraine........................... 5 1.0
Russian Orthodox Church........................... Russia............................ 5 1.0
[[Page H5634]]
Khrozolit......................................... Russia............................ 5 1.0
Popular Front for the Liberation of Palestine..... Palestine......................... 5 1.0
Petrogas.......................................... Switzerland....................... 5 1.0
Ministry of Energy (Jordan)....................... Jordan............................ 5 1.0
Minister of Forestry.............................. Myanmar Federation................ 5 1.0
Hungarian Interest Party.......................... Hungary........................... 5 0.9
Father Benjamin................................... Italy............................. 5 0.9
Akht Neft Company................................. Russia............................ 5 0.9
President Lehoud's son............................ Lebanon........................... 5 0.9
Orshansky......................................... Ukraine........................... 5 0.9
October 8 Movement (Chavez)....................... Brazil............................ 5 0.9
Muhammad Hilmi.................................... Egypt............................. 5 0.9
Trader Babar...................................... Malaysia.......................... 4 0.8
Muhammad Amin Rayyis.............................. Indonesia......................... 4 0.8
Tokyo Saxwele Holdings (MVL)...................... South Africa...................... 4 0.8
The Duleimy Group................................. Qatar............................. 4 0.8
Muhammad Ma'moun Al-Sab'i......................... Syria............................. 4 0.8
Surgut Neftegas................................... Russia............................ 4 0.8
Sultan bin Zayed Al-Nahyan........................ United Arab Emirate............... 4 0.8
Muhammad Saleh Al-Hourani......................... Jordan............................ 4 0.8
Liberation Organization........................... Palestine......................... 4 0.8
Mashhur Haditha................................... Jordan............................ 4 0.8
IOTC (Claude Caspert)............................. France............................ 4 0.8
Montega........................................... South Africa...................... 4 0.8
Mayudor........................................... Tunisia........................... 4 0.8
Belfarm Company................................... Balarus........................... 4 0.8
Indian Congress Party............................. India............................. 4 0.8
Pitmall Company................................... Malaysia.......................... 4 0.8
Comeback.......................................... Nigeria........................... 4 0.8
Omni Oil.......................................... South Africa...................... 4 0.8
Farnaco........................................... Tunisia........................... 4 0.7
Zuhair Al-Khatib.................................. Lebanon........................... 4 0.7
Zarabsneft (Gobkin University).................... Russia............................ 4 0.7
Wafa Tawfiq Sa'igh................................ Palestine......................... 4 0.7
Muhammad Amar Nofel............................... Syria............................. 4 0.7
Lid Guarantees.................................... Syria............................. 4 0.7
Moscow Science Academy............................ Russia............................ 4 0.7
Salim Al-Toon..................................... Syria............................. 4 0.7
Zarbshneft & Gas (Mr.............................. Russia............................ 3 0.6
Makram Hakim...................................... Indonesia......................... 3 0.6
Osama Ma'rouf..................................... Lebanon........................... 3 0.6
Ali Al-Muslim Company............................. Bahrain........................... 3 0.6
Nile & Euphrates Co............................... Egypt............................. 3 0.6
Trader Nafta...................................... Russia............................ 3 0.6
Tojan Faisal...................................... Jordan............................ 3 0.6
Faisal Darniqa.................................... Lebanon........................... 3 0.6
Sy Bolt........................................... Netherlands....................... 3 0.6
Philippines Production Group...................... Philippines....................... 3 0.6
Najah Company..................................... Saudi Arabia...................... 3 0.6
Chad Foreign Minister............................. Chad.............................. 3 0.6
Najah Wakim....................................... Lebanon........................... 3 0.6
Salem Al-Na'ass................................... Jordan............................ 3 0.6
Russian National Democratic Party................. Russia............................ 3 0.6
International Company for Trade and Investment.... Lebanon........................... 3 0.6
Napex Company..................................... Switzerland....................... 3 0.6
Ozia.............................................. Turkey............................ 3 0.5
Lutfi Fawzi....................................... Syria............................. 3 0.5
Lada Company...................................... Belarus........................... 2 0.4
Fadi Al-Alamiyya (International) 2 million........ Lebanon........................... 2 0.4
Darlink Med....................................... Vietnam........................... 2 0.4
Fazmash Ampex..................................... Ukraine........................... 2 0.4
Media............................................. Switzerland....................... 2 0.4
Maqdar Sarjeen.................................... Turkey............................ 2 0.4
F.T.D............................................. Ukraine........................... 2 0.4
Natuna Oil........................................ Indonesia......................... 2 0.4
Asiss Company..................................... Saudi Arabia...................... 2 0.4
Megawati Sukarnoputri............................. Indonesia......................... 2 0.4
Gulf Petroleum.................................... Qatar............................. 2 0.4
Samir............................................. Turkey............................ 2 0.4
Concrete Contracting Company...................... Bahrain........................... 2 0.4
Laka.............................................. Switzerland....................... 2 0.4
Nordvest Group.................................... Russia............................ 2 0.4
International Multaqa Foundation.................. Egypt............................. 2 0.4
Zayyad Yaghmour................................... Jordan............................ 2 0.4
Hawa Atlantic..................................... Indonesia......................... 2 0.4
Arak Paul......................................... Bulgaria.......................... 2 0.4
Delta Service..................................... Switzerland....................... 2 0.4
Afro-Eastern...................................... Ireland........................... 2 0.4
Yukos............................................. Russia............................ 2 0.4
B.B. Energy....................................... Lebanon........................... 2 0.4
Anwar Al-Aqqad.................................... Syria............................. 2 0.4
Energy Resources.................................. Ukraine........................... 2 0.4
Petroleum Wells Maintenance....................... Qatar............................. 2 0.4
Petrolina Oil..................................... Qatar............................. 2 0.4
Hassan Al-Kayal................................... Syria............................. 2 0.4
Haitham Seidani................................... Lebanon........................... 2 0.4
Socialist Party of Ukraine........................ Ukraine........................... 2 0.4
Chechna Administration............................ Russia............................ 2 0.4
Grand Resource.................................... Jordan............................ 2 0.4
Al-Hami Bashanti Foundation....................... Egypt............................. 2 0.4
Muhtashem......................................... Turkey............................ 2 0.4
Kadherm Al-Darazi Company......................... Bahrain........................... 2 0.4
Fal Petrol........................................ United Arab Emirate............... 2 0.4
KCK Company....................................... Turkey............................ 2 0.3
Tawfiq Abd Al-Raheem.............................. Yemen............................. 2 0.3
Vinapco........................................... Vietnam........................... 1 0.2
Mishinoimport..................................... Russia............................ 1 0.2
Delta Petroleum................................... Turkey............................ 1 0.2
Thai Rice Trader Jaiporn.......................... Thailand.......................... 1 0.2
South Holken...................................... China............................. 1 0.2
A.A.G. Company (Nigerian Ambassador).............. Nigeria........................... 1 0.2
Tatneft........................................... Russia............................ 1 0.2
The Ukranian House................................ Ukraine........................... 1 0.2
Slovak Communist Party............................ Slovakia.......................... 1 0.2
Lufti Dughan...................................... Turkey............................ 1 0.2
Fim Oil Company................................... Lebanon........................... 1 0.2
Plant [Blunt?] Petroleum.......................... Lebanon........................... 1 0.2
Sita.............................................. Turkey............................ 1 0.2
Trans Isko........................................ Ukraine........................... 1 0.2
Tamam Shehab...................................... Syria............................. 1 0.2
Ali To'ma......................................... Lebanon........................... 1 0.2
[[Page H5635]]
Delf Aderlink..................................... Romania........................... 1 0.2
Fideralty Torkovy................................. Ukraine........................... 1 0.2
IPS (Italian Petroleum Assoc)..................... Italy............................. 1 0.2
Al-Hilal Co (Adnan Al-Hanani)..................... Lebanon........................... 1 0.2
Wamidh Hussein.................................... Jordan............................ 1 0.2
Siberia Oil & Gas company......................... Russia............................ 1 0.2
Iblom............................................. Switzerland....................... 1 0.2
Sipol............................................. Switzerland....................... 1 0.2
Continental....................................... Cyprus............................ 1 0.2
Bony Fiol......................................... United Arab Emirate............... 0
West Petrol....................................... Italy............................. 0
O.S.C............................................. Vietnam........................... 0
Hetralk........................................... Italy............................. 0
Abu Abd Al-Rahman................................. Pakistan.......................... 0
Millenium......................................... United Arab Emirate............... 0
Petroleum Prdoucts Co............................. Sudan............................. 0
Oil & Gas Group................................... Pakistan.......................... 0
Sayyed Azzaz...................................... Pakistan.......................... 0
Belarus Communist Party........................... Belarus........................... 0
-------------------------
Grand Total................................. ................................ 4,044 $808.8
----------------------------------------------------------------------------------------------------------------
Finally, I want to close my portion of this by just reminding
everybody that when the Security Council set this scheme up, they
charged the Secretary-General with the responsibility of oversight. In
fact, they said that the Secretary-General is ``required to supervise
the sale of Iraqi oil and to monitor the spending of the proceeds on
specific goods and services for the benefit of the Iraqi people.''
Ladies and gentlemen, Congress is entitled to ask in response to these
allegations, where was Kofi Annan when this was going on? Exactly what
was he doing? What issue was he dealing with that was more important
than the welfare of the Iraqi people that was to be funded from this
program? The fact of the matter is, there was not anything else he was
doing that was more important. There was nothing else he was doing that
was more important. The danger in not addressing this situation and
bringing transparency and accountability to it is that we will replay
this over and over and over again to the detriment of the peoples of
various other countries that struggle to make it in this world. I thank
the gentleman from Connecticut.
Mr. Speaker, the following are excerpts from the U.N. Goals--
Preamble:
We the peoples of the United Nations determined:
to establish conditions under which justice and respect for
the obligations arising from treaties and other sources of
international law can be maintained, and
to promote social progress and better standards of life in
larger freedom,
to unite our strength to maintain international peace and
security
Mr. Speaker, the Oil for Food Program contradicted all of these
principles stated in the United Nations preamble and tarnished the
reputation of this important international organization. Throughout the
past year, the scandal, corruption and deception that was blatantly
ignored by the U.N. for over 7 years was finally exposed.
The U.N.'s Preamble mentions a goal of unifying countries in order to
strengthen international peace and security. Mr. Speaker, we succeeded
in strengthening Saddam's terror regime through this U.N. administered
Oil for Food Program.
Lack of disclosure of documents, contracts, and audits, as well as
lack of oversight of Iraq's dictatorial, abusive and corruptive
leader--Saddam Hussein--led to the most corrupt U.N. program in the
history of the U.N.
Benon Sevan, executive director of the Iraq Program, reported to the
U.N. 661 Committee in July of 2001 that the U.N. was doing its best to
``cut costs in order to make additional funds available to the
humanitarian program,'' with respect to the 2.2 percent oil export
revenue the U.N. received for administrative and operational costs.
However, audits reveal that the U.N. Iraq Program wasted funds by not
charging the primary contractor, Cotecna, for office space, equipment,
and medical services. The U.N. Oil for Food program paid Cotecna for
staff that didn't show up to work and amassed fees for not paying bills
on time.
Mr. Speaker, the U.N. Iraqi Program did not re-open the bidding
process when contractors raised their costs to estimates equal to the
second lowest bidders after contracts were awarded. The U.N. Board of
Audit's 1997 report revealed that the first inspection contractor
successfully added new inspection employees at $1,275 per day versus
the original contract price of $770. No re-bid was required. A year
later, in January 1998, Cotecna unilaterally increased its per-man-day
fee by 20 percent from $499 to $600, the rate of the next lowest
bidder. Despite the U.N.'s failure to keep costs down, they still
received 2.2 percent for every recorded oil barrel Saddam sold.
Mr. Speaker, the U.N. lacks the accountability and transparency that
is required to ensure faithful execution of its programs. In 1997, OIP
hired Cotecna to verify and confirm the commodity, value, quantity and
quality of supplies arriving in Iraq in accordance with the
requirements of the 661 Sanctions Committee resolutions. The U.N. Board
of Audit's 1998-2002 reports, the 2002 OIOS audit, and OIP field
missions reported that Cotecna provided insufficient numbers of point-
of-entry inspectors and failed to deliver, inspect, sample, verify and
report goods imported into Iraq. Instead, Cotecna relied on suppliers
for data and documents, such as cargo manifests.
Furthermore, neither Kofi Annan nor Cotecna bothered to declare a
possible conflict of interest, considering the Secretary-General's son
had worked for Cotecna.
In a statement made by Secretary-General Kofi Annan on the closure
date of the Oil for Food Program, Mr. Annan stated that the Secretary
General is, ``required to supervise the sale of Iraqi oil, and to
monitor the spending of the proceeds on specific goods and services for
the benefit of the Iraqi people.'' Mr. Speaker, where was Kofi Annan
when Saddam scripted and carried out his scheme to skim off millions of
dollars from oil sales and to buy junk instead of legitimate
humanitarian goods from his cronies abroad?
Additionally, the 661 Commission, made up of members of the Security
Council, was responsible for overseeing contracts, yet only the United
States and Britain voiced concerns about potential fraud within the
program. China, France and Russia remained silent in order to protect
their interests in the extensive lucrative contracts that Saddam was
offering them. We are not asking that the United Nations be dissolved,
for we value cooperation and friendship among nations. However, we will
not allow this organization which is supposed to be a beacon of
``justice and respect for the obligations arising from treaties and
other sources of international law,'' to turn a blind eye to the
scandals of this failed program.
We respect the Volcker commission for their investigation but are
skeptical that with the track record of U.N. inaccessibility and lack
of disclosure with regard to this Oil for Food Program, they will be
given full access to the information they need. Mr. Volcker does not
have subpoena power over the U.N. Nor does he have subpoena power over
the former Baathist regime or the thousands of contractors that may
have participated in the fraud. Lastly, Mr. Volcker cannot subpoena the
government or various involved companies from China, France and Russia.
We are demanding full cooperation and disclosure of all relevant
documents by the United Nations, U.S. agencies or any international
organizations affiliated with the Oil for Food Program. Let's restore
faith in the U.N. by restructuring the organization to include more
accountability and transparency in order to prevent this type of
scandal from occurring again.
In his 2001 speech to the U.N. 661 Committee, Sevan stated that given
security concerns and the arduous lifestyle in Iraq, he found it odd
hearing that ``a mission to Iraq is one of the most cherished and
sought-after assignments by the United Nations Secretariat staff.''
Well, Mr. Speaker, it may not have been so odd after all.
Mr. SHAYS. Mr. Speaker, with the 2 minutes or so I have left, I would
just like to summarize. From its inception in 1996, the United Nations
Oil-for-Food program was susceptible to political manipulation and
financial corruption. Trusting Saddam Hussein to exercise
[[Page H5636]]
sovereign control over billions of dollars of oil sales and commodity
purchases invited illicit premiums and kickback schemes now coming to
light. But there is still much that is not known about the details for
the Oil-for-Food transactions and that is why our committee and other
committees of Congress are investigating.
This much we know, something went wrong. Saddam Hussein's regime
reaped an estimated $10.1 billion from this program, $5.7 in smuggling
oil and $4.4 in oil surcharges and kickbacks on humanitarian purchases
through the Oil-for-Food program. There was just simply no innocent
explanation for this. We want the State Department and the intelligence
community and the U.N. to know there has to be a full accounting of all
Oil-for-Food transactions even if that unaccustomed degree of
transparency embarrasses some members of the Security Council. I
appreciate Kofi Annan's call to me to tell me that he wanted to restore
faith in the ability of the U.N. to do its job and subsequent
appointment of Paul Volcker to lead an independent panel.
{time} 2145
But we know Mr. Volker has to depend on the goodwill of the U.N., and
we do not have the kind of faith where we believe that some in the U.N.
will cooperate, since they were so clearly involved in these illegal
acts. But we also need to know more than just what happened at the U.N.
We also need to know what happened at the U.S. mission, we need to know
what our intelligence community knew and now knows. We need their
cooperation as well.
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