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Oil for Food Corruption

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Location: Washington, DC


OIL FOR FOOD CORRUPTION -- (House of Representatives - December 07, 2004)

The SPEAKER pro tempore. Under the Speaker's announced policy of January 7, 2003, the gentleman from New Jersey (Mr. Garrett) is recognized for 60 minutes as the designee of the majority leader.

Mr. GARRETT of New Jersey. Mr. Speaker, I thank the Speaker for the opportunity, I think, to be the last speaker of the 108th Congress, if I am not mistaken.

I want to take this opportunity before I begin just to reflect back, to reflect back on the 108th Congress, to think where we began at the beginning 2 years ago, all what seemed at the time insurmountable issues that this Congress would have to address. And we overcame them, addressed major issues, and passed significant legislation for the benefit of the people of this United States. And as we wrap up this 108th Congress now and look forward to the 109th Congress, here, this evening, we were actually able to pass the intelligence bill, to hopefully reorganize and restructure the Intelligence Community in this country for the benefit of the people, for the benefit of the liberties of this Nation as well, and the free world for that matter. It is a daunting task that lies ahead for us, but it is one that we can look back with great accomplishment that we have already achieved in the 108th Congress.

But as we do this, as we reflect back, we have to remember one problem that was just beginning to rear its head at the start of this session, and that grew out of the corruption, anti-Americanism, the inefficiencies of the United Nations and what we know now as the United Nations's food-for-oil scandal. And as the photo to my left shows, a steady diet of corruption, the U.N. oil-for-food scandal, oddly we see with Saddam Hussein on one side and the oil container on the other side, leaving out, of course, of the picture the very people of his nation that the food-for-oil dollars were supposed to benefit.

The U.N. Food-for-Oil Program was a program that was poorly structured from the very beginning. Basically it was one that was set up to allow for the egregious abuses that came. The nature and scope of this scandal is turning out to be, what I believe to be and what others have already said, the greatest financial scandal in the U.N. history, and actually the greatest theft in the history of the world.

The United Nations created a program that, if we think about it for a moment in retrospect, was doomed for failure from the very beginning at best, and, at worst, for corruption; and apparently what we got was the worst, corruption along with the failure.

I just want to take a moment to reflect back how this all began. It was back in 1990, 1 week after Iraq invaded Kuwait, that the U.N. Security Council passed Resolution 661. That established a worldwide embargo on the exportation of oil from Iraq.

Well, obviously, that was put in place to make sure that he would not be able to use those oil dollars for his own benefit. Due do Saddam Hussein's continued defiance and disregard of the U.N. weapons inspectors, we recall that we were trying to find out what was going on in his nation; but due to his defiance of those U.N. weapons inspectors after the war, those sanctions remained in place throughout much of the decade of the 1990s.

Now the critics at the time that those sanctions were put in place argued that they were placing an extraordinary burden on the general population, the regular people of Iraq. And by not allowing the Iraqi Government to export oil and derive the money from that, the government was faced with a significant decrease in revenue, and, therefore, they were unable to, it was said, to provide humanitarian assistance, basically food and medical supplies for their own people.

In fact, back at that time it was UNICEF that was saying that 1 in 4 children in Iraq at the time were malnourished, that 4,000 children were dying every single month due to the sanctions being in place.

The U.N. responded to that sort of argument that UNICEF and others were saying and the critics were making, and so, in 1996, with the Iraqi people honestly suffering at the hands of their government and no end to the sanctions in place of being lifted because Saddam Hussein was not allowing his weapons inspectors to come back into the country, the Iraqi regime agreed with the U.N. to set up the program that we now know as the Oil-for-Food program.

If there was ever a way to set up a program that could have been more set for failure, I cannot think of one. Why do I say that? Because it allowed for Saddam Hussein to have all the decision-making in his hand and the U.N. basically to have none, and in addition to that, the U.N. had very little oversight. Saddam Hussein was able to say who he wanted to sell the oil to under the Oil-for-Food program, which became a scandal, and in addition to that, he could basically set the price. So he could say that he was going to sell the oil to the companies or countries of his choice at a price that he would determine, that the U.N. would be able to look over those transactions at that point, but the U.N. was not given any ability to make further inspection when that company or that country was able to then sell the oil probably at a much higher price, a handsome price, a price that enabled that company or country to then do what it is entirely possible for it to do and what it did do, kick back that money to the Iraqi government and Saddam Hussein.

Likewise, Saddam Hussein was able to and was given the power by the U.N. to decide who it would be who would provide this humanitarian aid for his people. What was this doing? This was saying that Saddam Hussein was able to choose this company or this company or this country or this country to be the ones that provide the humanitarian aid, and of course, if he was rolling out literally hundreds of millions of dollars of program payments to them, what was occurring under the table in form of kickbacks only became realized later on. The Oil-for-Food program only stayed in place, of course, until April of 2003, when his regime was toppled.

Many investigations have begun and have proceeded over the last several years to try to explore exactly what occurred during that, what fraud and abuses came about due to this program that was so poorly set up from the very beginning, and what, of course, is found out? It has found corruption and bribery. It has found literally billions of dollars being taken from the starving people of his country and given to himself and for other purposes.

In the area of bribery, investigations revealed that Hussein's regime bribed numerous foreign officials, companies and others, to curry favor to have the sanctions imposed on them lifted by the U.N. This is just not wild speculation. It comes back from Charles Duelfer, the top American weapons inspector in Iraq at the time, he testified, Mr. Hussein was successfully using illegal proceeds specifically from the Oil-for-Food program to undermine support for the sanctions that the U.N. imposed after the 1990 invasion of Kuwait. So some of the very money that was supposed to be going to the people was going to U.N. officials.

The first report came out in the spring of early last year, the GAO report, and that report cited that Saddam Hussein had generated over $10 billion, that is with a B, of illicit revenues by gaming the system since 1991. Recent reports we may have seen have more than doubled that estimate to around $21 billion. Where was the money going besides bribery? To weapons.

Further corruption was exposed after allegations surfaced that Saddam Hussein used a large portion of the money to purchase weapons for his regime, and so now, it is widely believed that those very same weapons are the weapons that are being used by the rebels over in Iraq to kill and attack American soldiers.

Where else did the dollars go besides bribery and weapons? There are also reports that Saddam Hussein used the money he acquired from the program to pay families of Palestinian suicide bombers who killed Israelis and Americans to the tune of $35 billion, and this was done through Jordanian banks. I think we have a chart that in a not too complicated manner puts this one example in play, just gives a little idea how he was able to do it.

On the top of the chart, we show three different areas. The first two are really the main ones of where the money came from from these illicit purposes. Ten percent, kickback payments from companies in Oil-for-Food programs. Those are the humanitarian programs that I spoke to just a moment ago, those companies that he was able to say that I would only pick this company or this company or this country to do business with so long as they were kicking money back to them.

The other is a fee for oil. In this one example, $3 per barrel fee for oil paid by the Jordanian government as part of their program of getting oil from Iraq. So these were basically, if you want to use the vernacular, kickbacks that were coming for every barrel of oil that they were able to export at a very low price, and the Jordanian government was able then to sell at a higher price, they were required to kick back to his regime around $3 per barrel. That money then went into the Rafidain Bank in Amman, Jordan, into a Central Bank account in that bank.

Item number four shows that came out of the account, and in this one example that we show in this chart at least, to the families of suicide bombers in the amount of, as this chart is showing around, $15- to $25,000 per family for suicide bombers.

So, for anyone out there who is still believing that Saddam Hussein had nothing to do prior to 9/11 and prior to the toppling of his regime, that he had nothing to do with terrorism, let this evidence now dismiss that thought of innocence by Saddam Hussein from their thoughts today.

So, instead of his using dollars to help starving people in his own country, Saddam Hussein used the money to bribe, buy weapons, support terrorists and, of course, to further his lavish lifestyle as a dictator. I will just say as an aside, earlier this year I had the opportunity to travel to Iraq to visit with the American troops that are over there, see the great job that they are doing, that many of these men and women are so proud of the accomplishments that they have already achieved and what they want to do in the future.

While we were traveling about Iraq we had the opportunity also of seeing the palatial mansions that Saddam Hussein had not only for himself but other leadership in his government, for his generals, for the lakes that he had made for himself, man-made lakes and palaces around the country. That is where some of the money from the Oil-for-Food oil was going to instead of the starving people of his own country.

There is also speculation or evidence that is coming out to say that not only did the money go to other countries and to other companies, for the purposes I have already cited, but also to members of the U.N. itself, to the executive director of the Oil-for-Food program it is asserted that received dollars back from Saddam Hussein's regime from the Oil-for-Food program. Each one of these examples is an example of corruption by this regime that is becoming more and more apparent as the facts begin to present themselves.

The fact that this such an ineffective body in the Oil-for-Food program, the U.N., really should not come as a surprise to any of us who know a little bit about the history of the U.N. It is really just another example of the long-running inefficiencies of the U.N.

I mentioned before that UNICEF was blaming the sanctions on the fact that 4- to 5,000 Iraqi children were dying every single month; that one in four children in that country were malnourished during that period of the sanctions. What these facts really reveal is that it was not the sanctions that were causing the malnourishment of his population, but rather, it was the corruption and complicity of men like Saddam Hussein and Kofi Annan and other U.N. officials who allowed this to go on year after year after year.

The fact that the U.N. is inefficient as an organization really has to look at their overall purpose. What their major overall purpose, of course, is the prevention of war. There have been over 300 wars since 1945 and over 22 million deaths resulting from these wars. So we have to ask, how efficient was the U.N. in preventing them?

The U.N. has authorized military action to counter aggression only twice really, in North Korea's invasion of South Korea and Iraq's invasion of Kuwait. So how efficient was the U.N. in doing what it was really set out to do? It was not.

Today, the most urgent threat to international peace and security today is terrorism, and yet, the U.N. cannot even agree upon a definition of what terrorism is. That is really in large part because it counts terrorist-sponsoring States and countries among its own membership. They are not going to define terrorism in the same way that their country is established.

How about finally human rights violations? The U.N. counts the world's leading human rights violators and repressive government among its membership. Worse, those members are disproportionately represented among the 53 countries elected to the U.N. Commission on Human Rights, with Libya as my colleagues recall serving as chairman just last year.

Coming back to the issue then of Oil-for-Food and what the U.N. says they should be doing about it, well, the U.N. and the leadership says they are looking at the issue right now. The most troubling fact, however, is the lack of cooperation that we are receiving from the U.N. to get to the bottom of the most recent scandal involving Oil-for-Food.

The United Nations has continuously denied U.S. government access to papers and internal records that concern the Oil-for-Food program, and they have repeatedly in addition to that shielded their officials such as their executive director of this program from ongoing investigations.

How about audits? There is something like 55 internal audits that the U.S. government has requested from the U.N. so we can see exactly what was going on with this program, and the U.N. leadership has denied turning those audits over.

I will point out that the U.N. does continue to claim that they are addressing this problem by the establishment of the Volker Commission, and I think most people would agree that Paul Volker is beyond question as far as his integrity is concerned, but that is not the issue here. The issue is the way the commission was set up by the U.N. in order to investigate the Oil-for-Food scandal and basically was set up just as the other program was, totally ineffective.

It is ineffective due to his inability to gain any significant results. For example, Paul Volker has no subpoena power, and so, therefore, he is clearly open to U.N. manipulation as to the documents that he needs to get. In addition to that, he has no power of contempt, and by that I mean he cannot, like a court can, order someone to testify, bring forth documents, and if they do not, file contempt charges against them and force them to do so. So, without those abilities, the Volker Commission really is an empty shell and will not produce any results that are verifiable or that this Congress can rely upon.

I mentioned before that the U.N. leadership has failed to allow people to testify. The U.N. failed to allow Benon Savan, executive director of the Oil-for-Food program, to testify before Congress, and Volker Commission's has rejected requests to make them available for us.

I will point out something to make sure that our whole focus on this issue remains focused where it should be in light of my comments so far.

The Washington Times today, Tuesday, December 7, headline is House Republicans call for Annan to step down, Kofi Annan to step down. This followed a press conference that we held here in the House with the gentleman from Arizona (Mr. FLAKE) and others who have sponsored a piece of legislation that I will speak to in just a moment, and we sort of worried that the take on that press conference would be just the one that it is in the paper, and that is, the focus is on whether or not Kofi Annan should step down or not, as far as the headline is concerned.

While that is certainly an issue that should be discussed and debated and finally come to grips with as to whether or not we want to have someone in power, in charge of the U.N., that it was in place and overseeing the Oil-for-Food scandal the entire time that it was operating, and also now is stonewalling and blocking the U.S.' ability to get to the bottom of it, that is one issue.

But the real reason that the gentleman from Arizona (Mr. FLAKE) and others here had the press conference yesterday to address this issue was not so much who is at the leadership today, who is going to be at the leadership, at the helm of the U.N. tomorrow, but overall whether this scandal existed, and of course, the evidence shows that it did; to what extent that scandal existed; and who was involved; and basically to just get to the bottom of it. Until we get to the bottom of it, we owe it to the American public, and here is the point, to say to the U.N. that they cannot continue operating as they have operated all these many years and doing it on the American dime.

And the American taxpayer is not going to be subsidizing the scandals that continue to go on in the U.N. We are going to withhold payment to the U.N. until we get to the bottom of these facts.

So to that end, legislation sponsored this year, H.R. 4284, in the 108th Congress, is a piece of legislation that would do just that. It would say that we are going to withhold 10 percent of American taxpayer dollars going to the U.N., 10 percent of America's responsibilities to them, and that number is around $340-some-odd million a year. So 10 percent of that, obviously, is $32 million or $34 million this year. That would go up to 20 percent next year, so around $72 million next year, until the U.N. becomes more forthcoming, provides the documentation, provides the audits allowing the President of the United States to certify that the U.N. is cooperating with all investigations so we can get to the bottom of this and find out who is responsible in each one of these instances.

During the course of the year, or just recently, I should say, some Members, myself, the gentleman from Arizona (Mr. FLAKE), and others, have sent around what is called a "Dear Colleague" letter to encourage our colleagues to sign on to that bill during this session of Congress. As we go into the 109th Congress, we will be encouraging other Members to sign on to that bill as well, the focus, of course, being that tax dollars should not be going to such a scandal-plagued organization as the U.N. until they begin to clean up their act.

The fact that this evidence is all coming to a head now, or coming more to light now, may be an explanation as to why earlier in this session, when some of us moved an amendment to an appropriation bill that basically did the exact same thing that this bill would do, and that is to say when we had a spending bill going through this House earlier in the 108th Congress, we said let us do it right then, let us withhold some or all of our funding to the U.N. until we get this information, that, unfortunately, all the information was not out and we did not have enough Members in the House to support this legislation. So in the spending bills this year, we completely funded the U.N.

But now the information is coming out. It started early enough, of course. I honestly believe there was enough evidence at that time for us to withhold funds earlier this year. It started way back in a report dated June 20, 2003. An article appeared that said, "The now defunct program, the Food-for-Oil Program, allowed Iraq to buy food and medicine with its oil proceeds under U.N. supervision. Although the oil proceeds were legal and approved by the U.N., several observers say the system involved kickbacks and was used to buy political support and to finance intelligence activities and even terrorist activities. That is going back to reports in June of 2003.

Of course, there is the one I mentioned earlier, the Food-for-Oil minister, Benon Sevan. At that time he was granted an allocation of 7.3 million barrels of Iraqi oil. By that, I mean that under this program, Saddam Hussein decided that Benon Sevan, the Food-for-Oil administrator, the person in the U.N. who is overseeing the entire program, would be able to buy 7.3 million barrels of Iraqi oil from its regime. But he was able to do so at an artificially low price that Saddam Hussein set. So he was then able to resell that oil, and he could expect to receive $3.5 million in profit. As somebody else said, not a bad deal.

Who else was on that list, besides officials at the U.N.? Well, reports also show that three countries were involved, and these probably should not surprise any one of us here. Overall, 248 companies purchased through the Oil-for-Food program, but three countries go to the top of the list:

First, Russia. Maybe that should not surprise us. Russia has had a vested interest, as related in some of the reports, for the last 15 years in Iraqi oil production. But what may be interesting is one notable recipient of one of those lucrative oil contracts was the director of the Russian President's office.

Now, we are trying to get information from Russia to what extent that was going on, and why someone within the President's office in Russia was receiving those dollars. So far we have been unsuccessful.

A second country that should probably also not be a surprise to any one of us is our old friend France, also involved in the Food-for-Oil scandal. France's oil vouchers account for 150.8 million barrels of oil. And the people involved in that reportedly include the French interior minister and also close friends of Chirac and others.

So what this means is that people close to Jacques Chirac and the interior minister were able to get the ability to buy 150.8 million barrels of oil from the Saddam Hussein regime, again at an artificially low price, and again able to resell it at whatever price they could, which would be market prices, and then make a killing in that market deal.

The third and final one, Syria, again just like France and Russia, should come as no surprise that they were also part of the deal with Saddam Hussein as far as getting oil at a low price. How much? 116.9 million barrels of crude oil that they also got at an artificially low price and that they were able to sell and get back at a much higher price.

So the examples of abuse and fraud are complete. The people who are involved in it is a growing list of some of the countries that we always suspected may have had a reason for trying to undercut us in the U.N. with regard to sanctions, countries that had a reason to undercut us with regard to the war in Iraq. The people involved were the very people who were involved with implementing the program at the U.N.

So it now is incumbent upon this Congress, as we go forward into the 109th Congress, to do all that we can to shine the light of day on this program, to make sure all the facts come out, and to hold all guilty parties responsible. But the only way we are ever going to put pressure on the U.N. is by putting pressure in the area they respond to, and that is their funding.

So as we go into the 109th Congress, the gentleman from Arizona (Mr. FLAKE) and myself will be supporting legislation to withhold U.S. taxpayer dollars going to the U.N. until they open up their books, provide the audits, allow the people in that organization to testify before Congress and to let all the information come out so that the American public knows exactly where their taxpayer dollars are going.

With that, Mr. Speaker, as we close the 108th Congress, I look forward to the challenges ahead in the 109th Congress. I know that, as Franklin said, the price of liberty is eternal vigilance. Well, this Congress has been vigilant in the past, and I am sure we are going to be ever vigilant with the taxpayers' dollars and the American public's interest as we go through the next 2 years as well and we get to the bottom of the Food-for-Oil scandal.

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