OIL-FOR-FOOD U.N. says 2,200 gave Iraq illicit kickbacks

Saddam had corrupted the humanitarian program.
UNITED NATIONS (AP) -- In a scathing final report documenting massive corruption in the U.N. oil-for-food program, investigators accused Thursday more than 2,200 companies, and prominent politicians, of colluding with Saddam Hussein's regime to bilk the humanitarian operation of $1.8 billion.
The 623-page document exposed the global scope of a scam that allegedly involved such name-brand companies as DaimlerChrysler and Siemens AG, as well as a former French U.N. ambassador, a firebrand British politician and the president of Italy's Lombardi region.
It meticulously detailed how the $64 billion program became a cash cow for Saddam and more than half the companies participating in oil-for-food -- at the expense of Iraqis suffering under U.N. sanctions. It blamed shoddy U.N. management and the world's most powerful nations for allowing the corruption to go on for years.
"What I do want to emphasize is that the corruption of the program by Saddam ... could not have been nearly so pervasive had there been more disciplined management by the U.N. and its agencies," said Paul Volcker, a former Federal Reserve chairman who led the investigation.
Need for U.N. reform
Volcker and many nations said the report underscored the urgent need to reform the United Nations. Earlier reports in his investigation have already led to criminal inquiries and indictments in the United States, France and Switzerland. Volcker said his team would cooperate with legal authorities following up on the report.
The investigators found that companies and individuals from 66 countries paid illegal kickbacks using a variety of methods, and those paying illegal oil surcharges came from, or were registered in, 40 countries.
The companies came from Thailand, Malaysia, Russia, Belarus, Syria, Canada and many other places. Many businesses in the developing world made large payments to get humanitarian contracts. Asked what the report said about the state of global business, Volcker said: "There's a lot of corruption in the world."
Most of the contracts went to Russian and French companies and individuals, who were rewarded for their governments' outspoken opposition to the sanctions. Still, even firms in countries supportive of the sanctions, such as the United States, found ways to manipulate the system illegally -- sometimes by using Russian firms as middlemen.
The oil-for-food program, which ran from 1996-2003, allowed Iraq to sell limited and then unlimited quantities of oil, providing most of the money went to buy humanitarian goods. It was launched to help ordinary Iraqis cope with U.N. sanctions imposed after Saddam's 1990 invasion of Kuwait.