January 13, 2005

The Plot Thickens

And now cometh from the august pages of the FT:

For months, the US Congress has been investigating activities that violated the United Nations oil-for-food programme and helped Saddam Hussein build secret funds to acquire arms and buy influence.

President George W. Bush has linked future US funding of the international body to a clear account of what went on under the multi-billion dollar programme.

But a joint investigation by the Financial Times and Il Sole 24 Ore, the Italian business daily, shows that the single-largest and boldest smuggling operation in the oil-for-food programme was conducted with the knowledge of the US government.

“Although the financial beneficiaries were Iraqis and Jordanians, the fact remains that the US government participated in a major conspiracy that violated sanctions and enriched Saddam's cronies,” a former UN official said. “That is exactly what many in the US are now accusing other countries of having done. I think it's pretty ironic.”

Overall, the operation involved 14 tankers engaged by a Jordanian entity to load at least 7m barrels of oil for a total of no less than $150m (€113m) of illegal profits. About another $50m went to Mr Hussein's cronies.

In February 2003, when US media first published reports of this smuggling effort, then attributed exclusively to the Iraqis, the US mission to the UN condemned it as “immoral”.

However, FT/Il Sole have evidence that US and UK missions to the UN were informed of the smuggling while it was happening and that they reported it to their respective governments, to no avail.

You know, the U.N. has problems. Lots of them. But they are not the sole repository of evil scams on the planet. And Kofi isn't the devil incarnate. Also, of course, the story reminds us that the U.N. is really just a manifestation of the myriad machinations underway by its member states in any given week. All told, it will likely be proven out that very few of the states involved in 'oil for food' covered themselves with much glory through it all. Perhaps, the U.S. included. Though, and despite my respect for the FT, I suspect this is a story that will need a little more flesh on its bones by way of additional detail before any 'gotcha' pronouncements can be loudly, confidently proclaimed.

Posted by Gregory at January 13, 2005 04:59 AM

when FT says the USA knew, what they mean to say is that THE CLINTON ADMINISTRATION knew - remember that one? the one with personal ties to MARC RICH?

Posted by: reliapundit at January 13, 2005 07:10 AM | Permalink to this comment Permalink

Perhaps the US should have acted militarily to prevent the smuggling, that would have satis..... Oh wait, no that would be the US enforcing UN Resolutions, a lot of people don't agree with that one.

Posted by: Andrew Paterson at January 13, 2005 09:04 AM | Permalink to this comment Permalink

Good point about the Clinton administration. We can't be bound forever by whatever standards they may have applied or ignored.

Separately, the fact that some US government agency may have been informed (how reliably?) of a scam going down is a little different from being an active participant and profiting from it. You hate to suggest that the FT should 'discriminate', but in some cases like this it's, you know, appropriate.

Posted by: ZF at January 13, 2005 11:06 AM | Permalink to this comment Permalink

Duh. I've been saying this for months. Claudia Rossett, my ass.

Posted by: praktike at January 13, 2005 02:16 PM | Permalink to this comment Permalink

My understanding of the mechanics of the oil-for-fraud program was that the US and Britain decided they had to hold the line at preventing military or dual use equipment to slip through the net. If they had hve gone further in enforcing their bumptious, "unsophisticatied" views on public integrity the entire program would have collapsed. That's why, until 9/10/01, the primary aim of Powell's deplomacy was amending the program to "smart sanctions". Despite this possibly understandable compromise, I agree that the US probably does not have the moral authority to condemn the other players in the game, and should focus on demanding transparency in the future.

Posted by: wayne at January 13, 2005 02:37 PM | Permalink to this comment Permalink

I'm confident that the USG (and UK) were comfortable with a certain level of smuggling to particular states--Turkey and Jordan, in particular. They knew it was going on, kept track of it, and considered it no big deal. It was the price to be paid for keeping those states on-side.

But it certainly makes it awkward to condone some forms of smuggling while criticizing others. Consistency is something people expect from governments.

A flat-out admission of the facts of life, e.g., that some forms of smuggling were okay while others were definitely not, would have helped clarify the situation, but would have been almost impossible to do as a political act of will.

Posted by: John Burgess at January 13, 2005 03:33 PM | Permalink to this comment Permalink


So, the NYT weighs in, but only to try to shift blame to the United States for allowing those poor souls in France and Russia to accept billions in bribes from a mass murdering dictator? And only to say that since someone, somwhere knew about it at the time, then the organization pocketing huge commissions and bribes from the graft is somehow relieved of its responsibilities?

Is this the latest "Bush Knew"? Before he became President?

Hilarious. It's almost like they're not even trying, anymore.

Posted by: Some Guy at January 13, 2005 04:52 PM | Permalink to this comment Permalink

This is pathetic obfuscation. None of it absolves the UN, France, Russia, et al from corrupt tacit, if not overt support of a fascist dictator’s personal enrichment upon the misery of innocents.

Posted by: DaveK at January 13, 2005 05:22 PM | Permalink to this comment Permalink

Why is Clinton brought up again?

As I read it - this report is from events that were investigated and/or took place in 2003.

Stop tooting the horn of "evil bill" and get on with dealing with today.

This report doesn't finger GW or Cheney, and it's definitely not exhaustive and will need more background, but it removes some of that 'moral high ground' from which this administration shoots at the rest of the world.

Posted by: One Nil at January 13, 2005 10:15 PM | Permalink to this comment Permalink

the whole point that was important to me was that NATIONS WHO WERE TRYING TO THWART OUR TAKING ACTION IN IRAQ WERE PROFITING (REPEAT - PROFITING) FROM THE ILLEGAL OIL SALES. the point is that these were the nations we were supposedly supposed to wait on approval from? we should trust their motives when they argue against action in iraq? the US "having knowledge" of some bad shit is not the same as profiting from the bad shit. But anti-us journalists just love to blur the lines and confuse the issue. In fact, if the US did know, wouldn't that just make it make more sense for us to not trust the poeple who are profiting?

Posted by: chris at January 13, 2005 11:00 PM | Permalink to this comment Permalink

One Nil:

What planet are you from.

Republicans, who were in charge of all branches of government in 2003, are responsible for nothing!

The Clintons are responsible for poverty, cancer, sunburn, the tsunami, and probably for Oklahoma losing in the playoff game. I'll bet Clinton knew a USC fan - all you need to know!

And complaints about the Abu Ghraib torture is pure garbage. I mean, my God - Clinton lied about an affair. That is the most evil act ever perpetrated by a public official in the history of the world.

Get with the program!!

Posted by: Mark-NC at January 14, 2005 01:57 AM | Permalink to this comment Permalink

MY God! I'm shocked! Shocked to find governments risking over 200,000 men in a pending war should obfuscate their true interests!

Why the gall of the US and UK!

We demand total transparancy anytime we risk our citizens' lives! It's the only way to keep critics from engaging in post "tu quoque."

Posted by: T J Olson at January 14, 2005 02:24 AM | Permalink to this comment Permalink

Well it has hardly gone without notice on many "right-wing" sites that the administration has been less than enthusiastic about this story. Why? Because they and the previous administration knew already. This is hardly news. It is the "right-wing" commentariat which has driven this story, not the administration.

Still, it hardly says anything about Bush or Clinton if this story is true other than they both hated upsetting the UN and its various members unless they felt it absolutely necessary. Diplomacy and all that. Clinton because it was the center of the international order he wanted, Bush because you can only upset so many apple carts. Getting the French, Russians, et al on board was already looking difficult, spouting on about their perfidy openly wouldn't have helped (as opposed to whispering behind their back which they did aplenty.) Good or bad move? I don't know, but this story is not only unsurprising, but doesn't indict either administration of much other than a poor choice in friends to support. Unfortunately, there are not many worth supporting, beggars can't be choosers.

Posted by: Lance at January 14, 2005 04:35 AM | Permalink to this comment Permalink

Clinton certainly knew; and so undoubtedly did Bush, that the program was corrupt and people were skimming.

The central difference is that Marc Rich essentially bought his pardon, likely with Oil Bribe money; while Bush brought the whole corrupt thing DOWN. By invading Iraq.

Follow up: WSJ has details of Kojo Annan's profitting from Cotecna, and how Kofi's chief flunky and crony Benon Sevan had to intervene TWICE to get Cotecna the contract (they were NOT the lowest bidder; they were about 20% higher). Sevan himself of course also benefited directly in massive amounts.

Has anyone said that Bush personally profitted? The same cannot be said for Kofi; he had millions of dollars of reasons for opposing ANYTHING that upset the Oil for Bribes program. If Kofi were a US CEO or Government Officer, he'd be in jail or awaiting trial. Kofi is, it would seem, guilty of massive conflict of influence and so therefore the UN is essentially worthless, since it can be bought and sold.

The Volcker report's initial draft has already blasted Kofi's coverup; it would not surprise me to see Volcker resign if more info is not forthcoming.

Posted by: Jim Rockford at January 14, 2005 04:52 AM | Permalink to this comment Permalink

Yawn. What a mish mash of data and no context; selective suggestions of having evidence, and accusations spread though it that, if read together, would make your think your reading Scrappleface.

Just one instance in a report worthy of CBS 60 Minutes Wednesday.

"Although the financial beneficiaries were Iraqis and Jordanians, the fact remains that the US government participated in a major conspiracy that violated sanctions and enriched Saddam's cronies," a former UN official said. "That is exactly what many in the US are now accusing other countries of having done. I think it's pretty ironic."

Yes, all these other countries conspiring to violate UN sanctions were 30 days away from invading Iraq and were also in the midst preparing for war so violations like this were low on their radar, too, not to mention part of the arrangements with allies to ameliorate potential devastating consequences of a war to such allies. But heck, not only did we 'violate' them here by looking the other way, and that is all they have seem to have evidence of, as far as I can tell, we, in essence, ended UNSCAM within 60 days. Pretty ironic.

Posted by: Dusty at January 14, 2005 06:24 AM | Permalink to this comment Permalink

Reliapundit, ZF, if you'll read the original story (alternate link provided since original is behind archive paywall), you'll see that apparent US/UK complicity in this particular oil-for-food smuggling operation cannot be blamed on Clinton since it began in January 2003.

Posted by: ArC at January 18, 2005 03:15 AM | Permalink to this comment Permalink

The US knew for years that countries such as the Jordanians, Russians, and French were flouting the embargo, but could not end it diplomatically. If it had ever tried militarily to end the scam...well witness the results.

That the US knew and could not force an end, due to both practicality and diplomatic nice-ities is not a pock on us. We and the British were the only ones who consistently tried to tighten the sanctions, but had to pussy foot around because security council members would have created a diplomatic scene.

But alas, we are responsible because we could not realistically prevent other countries from smuggling. The anti-American yellow press strikes again.

Posted by: JackC at January 18, 2005 04:39 AM | Permalink to this comment Permalink
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