[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.

                          ____________________