Saturday, December 31, 2005

Letting Sleeping Watch Dogs Lay

The Sound of Silence: As in Dogs Not Barking
by Ian Williams
December 31, 2005

It was like hearing the first cuckoo of spring. MSNBC called this week to see if I would be interested in discussing the UN's waste, mismanagement and corruption in handling the Tsunami funds twelve months ago. It was, they suggested, “The biggest financial scandal since Oil for Food.”

It was, in fact, deja vu all over again. Twelve months ago, in the immediate aftermath of the Tsunami, I was being ferried around the studios to discuss the shock and horror of UN Humanitarian Affairs chief Jan Egeland calling the US "mean".

Mere technical details like the fact that he had said no such thing did not dam the tidal wave of indignation bouncing off the walls of the conservative echo-chamber.

Egeland had actually said that the developed countries had almost all failed to meet their own targets of 0.7% of GDP going to Overseas Development Assistance, which is indisputably true. He did not specify that of all of them, the US was the meanest, but I had no compunction about reminding viewers.

In fact, the US had offered an initial $30 million at the time of the Tsunami, which the talking heads all considered as the height of generosity. As the scale of the tragedy broke, the administration added several zeroes to its initial offer. However the purpose of the show was not to congratulate me on my prescience, it was to find another excuse to attack the UN.

In fact, I am somewhat surprised that no one has yet found a way to link the Hurricane Katrina debacle to the UN. But somehow the right does not want to remind people about the New Orleans debacle.

I doubt that we have heard the last of this newly launched Tsunami canard, not least since Bill Clinton's position as UN Special Envoy makes it a double whammy for the right. The UN is always wrong, it is simply a question of pinning its inherent wrongness to a topical peg.

However we can draw some comfort. Could it be that that "Oil for Food" as a subject has lost its appeal even for the rabid right?

On one level, this is probably no bad thing, since the voluminous but vapid Volcker Report finally said all there was to say, and probably a lot more than was worth saying, about the alleged scandal.

De minimis Lex non curat, says the old legal saw, "The law does not concern itself with trifles." If only we could say the same of much of the media, which of course concerns itself with little else.

For a year every minute item about the Oil For Food Program has been bellowed breathlessly from the conservative media.

And suddenly, there is silence. Last month Kojo Annan, son of Kofi, was awarded large damages against the Murdoch-owned London Sunday Times, which had to admit that its story connecting him to Oil For Food contracts had no substance. You did not see the story on Fox, MSNBC, or any of the usual cabal.

In December, the US charged two colonels who had worked for the "Coalition Provisional Authority" with accepting bribes of $200,000 a month for steering contracts to companies that were seemingly just shells. They worked with someone whom the Coalition Provisional Authority hired as comptroller with a budget of $82 million -- despite a previous felony conviction for fraud.

It did not make the headlines. Senator Norm Coleman and Congressman Henry Hyde did not call for the resignation of the chief executive of the organization involved, one George W. Bush.

And no one mentioned that much of the money involved presumably came from the $10 billion surplus that the UN Oil For Food Fund had handed over to the Development Fund for Iraq, controlled by the CPA. During its blessedly short life span, the American dominated CPA spent nearly $20 billion of the $23.34 billion of Iraqi funds it had under its control for just over a year. It spent just $300 million of the US taxpayer funding pledges of $18.4 billion for Iraq's reconstruction.

At a press conference at the UN on Wednesday 28 December the members of the International Accounting and Monitoring Board set up by the Security Council to monitor CPI spending of DFI funds, reinforced the impression that the Pentagon's efforts to freeze them out were a waste of effort. The body bared its gums and refused to bark at the clear evidence of gross waste, mismanagement and corruption by the CPA.

The board simply examined 24 sole sourced contracts that the CPA awarded worth more than five million dollars. In fact, we discovered during the press conference, they had paid KPMG to "audit" 23 of them, representing some $600 million, which it was suggested was mostly a process of examining American government audits.

The Pentagon had heavily censored what they provided to the IAMB until Congressman Henry Waxman posted their devastating reports on his website.

The biggest sole-sourced contract was Kellogg Brown Root, the Halliburton subsidiary which walked off with $1.6 billion. KPMG recused itself from this, so the IAMB relied on the work of the Special Inspector General for Iraq as well as the Pentagon audits.

Just consider. The US gave a sole sourced contract to a subsidiary of the company that had had Vice President Dick Cheney CEO from which he is still rolling up deferred compensation. The audit was carried out by Stuart Bowen, the Special Inspector General, appointed by President George W. Bush, whose lawyer he had been in various forms way back to his time as Governor of Texas.

Through almost complete media silence about this ultimate in potential whitewashes, one cannot help but hear echoes, of the febrile demands for transparency from the UN, on the need for external checks. If Kofi Annan had appointed his own lawyer to conduct the Inquiry that Volcker actually headed, can you imagine the frothy indignation?

It also emerges that the IAMB did not examine the other contracts at all, not even to check the open-ness and fairness of the bidding, let alone to see if the money from the Development Fund was in fact spent on behalf of the Iraqi people as mandated.

In fact, even Bowen's report managed more indignation than the IAMB has so far mustered. Almost the only admonition from the Board has been to suggest mildly that the US reimburse the $200 million plus that KBR overcharged for fuel supplies to Iraq. Bowen found a massive $8.8 billion of Development Fund for Iraq money could not be accounted for

That was the result of Defense Department Audits that the Pentagon tried to conceal from the IAMB, and which were only revealed by Waxman who has managed far more indignation about it than the IAMB's public statements display. One cannot help suspecting that some of the board's five members have had words with US administration officials. Even Bowen complained about this one.

As Waxman said back in June, "there has been a stark and telling contrast between Congress' approach to the Oil For Food Program and the DFI. Five separate congressional committees have been investigating U.N. mismanagement of the Oil for Food Program, and more than a dozen hearings have been held. But before today there was not a single hearing in Congress on U.S. mismanagement of the Development Fund for Iraq," which, as he points out, is the successor to the Oil For Food program. (click here)

Waxman reported that the CPA withdrew no less than $12 billion in cash from the New York Federal Reserve Bank DFI and flew it to Iraq, comments -- no less than 363 tons of $100 bills, the largest cash withdrawal in history. In its final feeding frenzy, in the last month the CPA took out $4 billion from the mother of all ATM's in New York including the largest cash withdrawal in history, $2.4 billion.

In a partial audit of $120 million of the $600 million handed out to US military officials for local reconstruction, more 80% could not be accounted for, and $7 million was simply missing.

When I raised the fate of these funds at Kofi Annan's press conference just before Christmas, I was later berated by John Bolton's press officer as an "apologist for the UN," as he questioned my journalistic integrity and accused me of "blurring the line" between the Oil for Food kickbacks and what he characterized the CPA's accounting irregularities. I told him that I was not blurring the line. I was drawing a straight line between them.

If Benon Sevan's $160,000, alleged by the Volcker Inquiry, is headline news for the best part of the year, then I think it is a legitimate question to ask why the CPA's attested multi billion scandal scarcely merits a paragraph in the back pages.

Or is the profession saying that this is a dog bites man/man bites dog scenario? That if the UN is corrupt it is unusual, but massive corruption is too commonplace in this Bush administration to merit mention?

I suspect that this is not what the news editors and producers are saying. But it would be interesting to hear an explanation about what news values mandate that the mote in the UN's eye deserves minute attention but that the beam in the White House's can be overlooked.

Ian Williams has written for newspapers and magazines around the world, ranging from the Australian, to The Independent, from the New York Observer and Village Voice to the Financial Times and the Guardian. His blog is the Deadline Pundit.

Other Articles by Ian Williams

* Christmas Spirit and Governor Scrooge

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