Volcker blames UN's problems on its structure

Paul Volcker

WASHINGTON - The chairman of an independent commission probing the UN's oil-for-food programme has blamed lapses at the world body on a "systemic problem" instead of UN Secretary-General Kofi Annan.

Paul Volcker, who chaired a year-long investigation of the scandal-plagued US$64 ($92.63) billion humanitarian programme for Iraq, also disputed a senator's description of a "culture of corruption" at the United Nations, saying he found "limited" corruption.

Volcker testified to the Senate Homeland Security and Governmental Affairs subcommittee on investigations, chaired by Minnesota Republican Norm Coleman who has called for Annan's ouster and for a drastic overhaul of the United Nations.

Last week, Volcker's panel issued a report that showed 2200 companies from around the world that did business with Iraq in the oil-for-food programme fed Saddam Hussein's regime nearly US$2 billion either through straight bribes or surcharges on oil sales.

Pressed by Coleman on whether Annan should be fired for corruption in the oil-for-food programme and other problems, Volcker said, "I think it is a systemic problem."

The secretary-general's job has become too broad, Volcker said, and cannot focus enough attention on administering the world body.

"The structure needs to be strengthened in a way so there are fewer excuses for escaping responsibility," said Volcker, a former US Federal Reserve chairman.

Volcker also warned against a rush to try to force the United Nations to undertake drastic reforms this year, saying: "I'd rather get it right than get it next month."

He rejected calls from some Republicans in Congress to slash US dues to the United Nations. "I don't like the idea of the United States unilaterally cutting off money," he said.

Sen. Carl Levin of Michigan, the subcommittee's senior Democrat, blamed the oil-for-food programme corruption partly on lax oversight by the United States and other countries.

Levin asked Robert Werner, director of the Treasury Department's Office of Foreign Assets Control, why it took eight months for OFAC to contact Texas company Bayoil USA after UN overseers who suspected illegal activity sought the US government's help in 2001.

Werner, who was not at OFAC at the time, said, "There was a serious problem with the way OFAC addressed this issue," and that "there was true confusion as to the way this programme was to be administered".

He also noted the agency is strained by demands of sanctions programmes, which currently total about 30.

Bayoil was the first US company to be indicted in the oil-for-food probe, on criminal charges of a scheme to pay millions of dollars in secret kickbacks to Iraq.

- REUTERS